MicroStrategy is using Bitcoin cryptography to counter these AI threats - Michael Saylor (Pt. 3/3)

Introduction

In this section, the speaker introduces the topic of Bitcoin 2023 and discusses the potential threat of AI to the status quo.

Threat of AI

• The speaker brings up the idea of AI as a potential threat to the status quo.

• However, he also believes that Bitcoin and encryption can be useful in terms of AI and deep fakes.

Commercial Success

In this section, the speaker talks about how all technologies have a period where people experiment with them without any material commercial success.

Ferocious Innovation

• The speaker believes that we crossed over into a commercial zone about a year ago.

• For the next decade, there will be ferocious innovation and advances that will be astounding.

Brain Power Revolution

In this section, the speaker talks about how AI could unleash a brain power revolution in the same way that internal combustion engines gave us a horsepower revolution.

Brain Power Revolution Explained

• The brain power revolution is when you may get 2,000 brain powers for your company and pay nothing for it.

• This could be profound in the same way that 300 horsepower on a fishing boat is profound instead of 3,000 slaves rowing.

Threats in Cyberspace

In this section, the speaker talks about two threats related to cyberspace: fake entities created by bots and civil wars created by fake people.

Risk in Cyberspace

• The risk in cyberspace is that someone can spin up a billion fake people and create a civil war by having fake Republicans hate on fake Democrats or vice versa.

• This could lead to everyone thinking everybody else is disrespectful to them.

Creating Integrity in Cyberspace

In this section, Michael Saylor discusses the issue of fake accounts on social media platforms and proposes a solution to create integrity in cyberspace.

Public-Private Key Identity Pair

• The solution proposed is to create a public-private key identity pair like they use on Noster.

• This identity should be inscribed on the Bitcoin base layer with a transaction.

• Once done, every document can be digitally signed using this identity.

Cost and Consequence in Cyberspace

• By combining cryptography with decentralized crypto networks like Bitcoin, cost and consequence can be brought into cyberspace.

• Without a thermodynamic cost to do something, it becomes difficult to trust what we see online.

• A cryptographic verification system can help differentiate between real and fake identities.

Decentralized Identity

• To have universal authentication, an orange check needs to be created and burned into Bitcoin's blockchain.

• Many people are currently working on projects that blend cryptographic security with modern technology in a decentralized way.

Conversation with Elon Musk

In this section, Michael Saylor talks about his conversation with Elon Musk regarding creating integrity in cyberspace.

Collaboration with Elon Musk

• Michael Saylor has had contact with Elon Musk regarding creating integrity in cyberspace but it is unclear if he has run the idea by him.

MicroStrategy Pursuing Technology to Save Yourself

In this section, Michael Saylor talks about how MicroStrategy is actively pursuing technology to save yourself and not wait for someone else to save you.

Pursuing Technology

• MicroStrategy is actively pursuing technology behind saving yourself.

• There's no reason to wait for someone else to save you.

Having the "Aha" Moment

In this section, Michael Saylor talks about having the "aha" moment when realizing the need for a better way of investing and avoiding scams.

Realizing the Need for a Better Way

• You just have to have that "aha" moment when your friends call you and say they were approached by you and they wired their life savings to invest in something and it's gone.

• Scammers, fishers, and criminals impersonate people in cyberspace.

• It makes you angry and think that there needs to be a better way.

Losing Control of Cyberspace

In this section, Michael Saylor talks about losing control of cyberspace and its implications.

Implications of Losing Control of Cyberspace

• If you lose control of your airspace after an airplane, you will be bombed back to the Stone Age.

• Germany got firebombed because they lost control of their airspace during World War II.

• No modern nation-state can exist losing control of its airspace.

• We're faced with the issue of who controls our cyberspace which is currently in chaos.

• You can't trust anything across many social networks because there are so many scammers, phishers, and criminals impersonating people in cyberspace.

Importance of Sea Power and Cyberspace

In this section, Michael Saylor talks about the importance of sea power and cyberspace.

Importance of Sea Power and Cyberspace

• If you're ocean-faring people living on an island and don't have sea power in the form of a Navy, you will starve to death.

• Britain almost starved to death many times in its history because they lost control of their airspace.

• No modern nation-state can exist losing control of its cyberspace.

• Bitcoin is secure because it is the most powerful cyber network with 350X a hash backed by 15 gigawatts of energy which makes it fault-tolerant military-grade communication network that is nation-state resistant.

The Power of Bitcoin

In this section, Michael Saylor talks about the power of Bitcoin.

The Power of Bitcoin

• Bitcoin has 350X a hash which makes it secure.

• It's backed by 15 gigawatts of energy which is more than what the US Navy runs on.

• Interrupting or stopping transactions on the network would cost about $100 billion over ten years.

• It's fault-tolerant military-grade communication network that is nation-state resistant.

The Importance of Cyber Power

In this section, the speaker discusses the importance of cyber power in defending against hostile attacks and maintaining sovereignty in the 21st century. Bitcoin is presented as a key tool for achieving this.

Cyber Power and Bitcoin

• Civilization needs to defend its money transfers, banking network, news networks, and social media networks against hostile attacks.

• Chaos in social networks is causing many problems in the world due to misinformation.

• AI threat requires cyber power, which has no shortcut or simple trick.

• Digital power or proof of work is necessary for maintaining sovereignty in cyberspace.

• Bitcoin is the most powerful and secure cyber network currently available due to its proof of work system.

Mining and Environmental Concerns

This section focuses on mining and environmental concerns related to Bitcoin. The speaker addresses proposed taxes on Bitcoin mining by the Biden Administration and how it could impact national security.

Proposed Taxes on Mining

• The Biden Administration has proposed a 30% tax on Bitcoin mining under the guise of environmental concerns.

• Eliminating digital power industry from one's own country would be detrimental to national security.

• A spike will be put into it by people in DOD; there won't be any bipartisan support for it.

• It's not intelligent to drive data center business or electricity business out of the US.

Ordinals as Catalyst for Adoption

This section discusses ordinals as a catalyst for adoption despite some arguments that they detract from sound money arguments.

Ordinals as Catalyst for Adoption

• Ordinals are inscribed NFTs that are blocked up on the blockchain using Satoshi, which is the smallest denominator of a Bitcoin.

• Ordinals are seen as a catalyst for Bitcoin adoption despite some arguments that they detract from sound money arguments.

• Transaction fees are high, and it's more profitable for a miner to work with the inscription of an ordinal than to facilitate a Bitcoin.

Bitcoin as the Ethical and Low-Risk Asset

In this section, Michael Saylor discusses why Bitcoin is the most secure and ethical asset to build on. He explains that all other cryptocurrencies except Bitcoin are at risk of being stopped by regulators, making them unethical assets to use.

The Benefits of Building on Bitcoin

• Developers realize that when the dust settles, only Bitcoin will be left standing as the low-risk network least likely to be stopped by regulators.

• Using tokens deemed unregistered securities is an ethical lapse and illegal. Therefore, intelligent developers choose to build on Bitcoin because it is politically and technically most secure.

• Burning a monkey jpeg or any rare data piece on an unregistered security while wash trading is unethical and illegal. However, doing so on Bitcoin may be stupid but not unethical or illegal.

• If one needs to send a message from point A to point B in the middle of a war while being denied service attacked, using Bitcoin is the way to go since it can overcome nation-state attempts at stopping messages.

Burning Hashes for Tamper-proof Documents

• To make documents tamper-proof, one can hash them and burn them onto the blockchain forever. For instance, if one has a billion-dollar document like a will with witnesses who are dead or notary who's dead, hashing it onto the blockchain makes it tamper-proof.

• By inscribing corporate resolutions into the blockchain through hashes burning, companies can keep secret resolutions that have billion-dollar impacts without worrying about tampering.

Conclusion

• While there may be 100 thousand different applications launched in crypto space where 99% of them won't be successful, the bigger idea is that we shouldn't censor the protocol but fight over it. The protocol should be a network where anyone can own Bitcoin and engage in transactions as long as they stick to the rules.

Bitcoin and the Free Market

In this section, Michael Saylor discusses how Bitcoin is based on the idea of free markets and allowing people to do things that are good for the world based on subjective judgment.

Bitcoin Protocol and Free Markets

• The Bitcoin community and protocol is based on the idea of having rules without rules.

• People can bid on whatever transaction they want to do, which will lead to a hundred thousand applications on layer two and three.

• These applications will succeed or fail progressively as the free market constructs and deconstructs ideas.

• Every problem pointed out in the base layer will have another free market actor that will create a solution in layer two or three.

MicroStrategy's Lightning Rewards

In this section, Michael Saylor talks about MicroStrategy's product that allows customers to offer lightning rewards or bitcoin-based rewards to their prospects, customers, partners, and employees.

Lightning Rewards

• MicroStrategy created a module that allows all customers to offer lightning rewards or bitcoin-based rewards.

• Customers can integrate it with their corporate directory so that all employees have a bitcoin wallet.

• All customer accounts can also have a lightning address which is their account name at your brand like sailor mikey.com whatever.

• Simple tools are provided where they can build rules where every time a customer logs into their website and posts the product review they get a Satoshi reward.

• Employees get rewarded when they show up to meetings on time.

• When ready to withdraw them you simply withdraw the lightning address or scan with your lightning wallet.

Benefits of Lightning Rewards

• Companies give billions of dollars to their employees in compensation incentive come.

• Companies spend hundreds of billions of dollars on digital advertising given to Google and Facebook.

• Instead of spending money on advertising companies could give money directly to their customers and cut out the ad agent and middle person.

Micro Payments and Bitcoin

In this section, Michael Saylor discusses the challenges of making micro payments with credit cards due to transaction fees and settlement times. He also explains how Bitcoin and lightning can provide a solution for frictionless micro payments.

The Opportunity for Change

• Lightning and Satoshi's represent an opportunity to change the way we think about marketing or employee incentives.

Leveraging Existing Infrastructure

• Michael Saylor's company has spent 30 years building customer relationships with big brands like Disney, Nike, Starbucks, big banks, airlines, and hotel chains. They have a large sales force in 27 countries, thousands of service people, an army of lawyers and accountants, and enterprise software agreements with all of them.

• By leveraging their existing infrastructure, they hope to convert many big brands into taking their marketing budget and buying Bitcoin to give away to customers as part of their marketing strategy. This will further adoption of Bitcoin.

Overall, Michael Saylor highlights the challenges associated with making micro payments using traditional credit cards due to high transaction fees and long settlement times. He believes that Bitcoin and lightning can provide a solution for frictionless micro payments while also providing opportunities for businesses to leverage existing infrastructure for further adoption of Bitcoin.