#12 - Michael Saylor

Balaji (0:00)

Michael, welcome to The Network State Podcast. We're going to do a special episode today, where we go through Michael Saylor's new roadmap and digital assets framework. Michael, welcome.

Michael Saylor (0:11)

Yeah, thanks for having me. Really happy to be here.

Balaji (0:14)

Awesome. Okay, great. So you just published this digital assets framework. The principles and opportunity for the US, right? It's PDF, it's got in more than half a million views. Maybe you can talk through it, say, what you were thinking about when you're writing this and what the goal is.

Michael Saylor (0:31)

Sure. So first of all, for the past four years, I've been watching the crypto debate go on in the United States and everywhere else in the world. And I think a lot of times, everybody's yelling and there's a lot of talking past each other and there's a lot of friction. And it seems to me that if our goal is to move forward in a constructive, progressive fashion, we'd benefit from a framework. So I put together a digital assets framework along with a set of principles. And I try to talk a bit about the ideology, what's the vision and what's the opportunity. And I did it from the United States point of view, because I think the United States really needs to lead in the digital assets arena. And if they do, I think it's quite likely that'll provide the air cover that will allow similar digital assets frameworks in the Middle East, in Singapore, in Japan, in Europe, etc. in South America. So let's look at the different steps. I've got a taxonomy, a taxonomy of different assets. We talk about how we legitimize these assets. And then one of the practices we need in order to make, how do we make this practical? And then the fourth section is on the vision. And the fifth section is really the opportunity for the United States.

Balaji (1:58)

So, why don't we start with the, yeah, exactly, the taxonomy, right? So you have six definitions there. Most of them, I think people have heard. Why don't you go through them? Commodity, security, currency, token, NFT, and ABT. I hadn't heard the last term in that acronym, the asset-backed token. But go ahead.

Michael Saylor (2:15)

So there's a lot of types of digital assets. A digital commodity is an asset without an issuer backed by digital power. A digital security is an asset with an issuer and it's backed by a security. The third, a digital currency, it's an asset with an issuer, but it's backed by a fiat currency. A digital token would be a fungible asset with an issuer. Then you've got digital NFTs. It's a non-fungible asset with an issuer offering digital utility. But the difference is, you could have 10 million fungible tokens and we get that. But if you have a hundred different NFTs and they give you a hundred distinct rights, then it's something different than the token. Now the last one, digital ABT, asset backed token, a digital asset with an issuer, but backed by a physical asset, backed by a bar of gold, backed by a barrel of oil. So that's the taxonomy. They're all tokenized assets and we're talking about tokenizing the capital. They're all markets and each one of these is a different form of property.

Balaji (3:20)

I actually like this because it carves it at the joints pretty well. Let me go through and you see, tell me if I'm playing this back correctly according to your definitions. Right? So digital commodity, that would be Bitcoin. That may be the only, in your view, do you think that's the only digital asset without an issuer?

Michael Saylor (3:39)

I won't say that. I won't go that far. I will say, it's a very high hurdle to issue a digital asset without an issuer. It's very hard, right? It can be done.

I could imagine other digital commodities. For example, you could, I mean, China could take Bitcoin, fork Bitcoin, create China Coin, and they could say, China Coin is like Bitcoin, but it has special tax privileges in China, and it's only interesting to the Chinese people, and 1.5 billion people. Maybe something as simple as, you're allowed to mine China, China Coin in China with Chinese power, and you're not allowed to mine Bitcoin. You would have, if everything else was the same, if there was no issuer, you would have, in theory, a digital commodity. Maybe it's not global property, maybe it's China property. But the point is, the real key is, if you want to create a commodity, you need to create a network, disquain beneficial ownership, and you can't point to anybody that has control of the destiny of the network or has some major beneficial ownership of it, if you're going to achieve commodity status.