Speaker 1: Welcome to Tech Stuff, a production from iHeartRadio. Hey thereon
Speaker 1: Welcome to Tech Stuff. I'm your host, Jonathan Strickland. I'm
Speaker 1: an executive producer with iHeart Podcasts and How the Tech
Speaker 1: Are You. Today, we have a very special guest joining
Speaker 1: us on tech Stuff. He's a financial analyst extraordinaire. He
Speaker 1: is the host of the Financial Quarterback. He is Josh Jaelinski.
Speaker 1: Welcome to Tech Stuff.
Speaker 2: Thanks for having me. It's gonna be a lot of fun.
Speaker 1: Yeah, I'm really excited to talk with you today. We're
Speaker 1: gonna talk about crypto because obviously it's always been a
Speaker 1: big topic in tech. We have covered it multiple times
Speaker 1: on tech Stuff, but in the wake of the US elections,
Speaker 1: we've seen an incredible resurgence in the crypto space. And
Speaker 1: while we've covered it from the tech side, I have
Speaker 1: to be honest with you, Josh, when it comes to
Speaker 1: financial analysis, that might as well be written in Klingon
Speaker 1: for me, and I am not fluent in that. So
Speaker 1: I'm glad to have you here. Can you tell our
Speaker 1: listeners a little bit about your own background before we
Speaker 1: kind of dive into the crypto space.
Speaker 2: I own an SEC registered RIA registered investment advisor firm
Speaker 2: called Wealth Quarterback. I've been on the Financial Quarterback radio
Speaker 2: show in war in New York. iHeart flagship station fifty thousand,
Speaker 2: Want Flamethrower, and we have a podcast, the Financial Quarterback,
Speaker 2: and I help educate listeners each week on tax's, income planning,
Speaker 2: retirement planning, and all things investing, including bitcoin.
Speaker 1: Yeah, it's one of those areas that I have tiptoed
Speaker 1: around because, as I said, I've looked at the tech
Speaker 1: side of cryptocurrency and we've talked about the differences in
Speaker 1: the various cryptocurrencies out there, both from the brand to brand.
Speaker 1: You know, your bitcoins and your ethereums being the two
Speaker 1: probably best well known. I would argue maybe dogecoin if
Speaker 1: you're into the meme stocks. Beyond that, we've talked about
Speaker 1: things like the proof of work versus the proof of
Speaker 1: steak approach to the verifying transactions and the mining of
Speaker 1: bitcoin being proof of work, Ethereum now being proof of steak,
Speaker 1: although it was originally proof of work as well, and
Speaker 1: so we kind of covered that. But when it comes
Speaker 1: to investment, that's largely untapped territory for me. And part
Speaker 1: of that is, first of all, I am no expert
Speaker 1: on finances, but also there's certain elements of crypto that
Speaker 1: I've always found daunting. The big one, I would argue
Speaker 1: would be volatility. The fluctuating value of bitcoin in the
Speaker 1: past has always been one of those things that has
Speaker 1: given me pause because I think of it from a
Speaker 1: currency perspective. If I have a note in my hand
Speaker 1: that's worth one US dollar today and I spend it
Speaker 1: and then I find out tomorrow it was worth ten
Speaker 1: US dollars, it really makes me wonder is it right
Speaker 1: to call bitcoin a currency at all? Or do you
Speaker 1: think of it in terms of some other form of asset.
Speaker 2: I think it's more of the digital gold equivalent. I
Speaker 2: think it's a hedge against the US dollar and the
Speaker 2: Federal Reserve. So it's interesting. I'd love to hear your
Speaker 2: tech side. I'm coming more from the macroeconomic outlook that
Speaker 2: people for years and satoci in his white paper. You know,
Speaker 2: I'm looking at the blocks and I get confused by
Speaker 2: all the formulas, but I just remember I was actually
Speaker 2: looking at it last night a little bit, and all
Speaker 2: it is is peer to peer money transfers. I mean,
Speaker 2: that's the fundamental, you know, basis of bitcoin. But it
Speaker 2: really came in the wake of the Great Financial Crisis
Speaker 2: of two thousand and eight, where they were Satoci whoever
Speaker 2: he is, basically Satoshi Nakamoto. If your listeners don't know,
Speaker 2: founder of bitcoin wrote the famous Bitcoin White Paper, I
Speaker 2: recommend everybody read it so they just kind of know
Speaker 2: what bitcoin is.
Speaker 1: Yeah.
Speaker 2: Yeah, at its simplest form, it was an answer to
Speaker 2: a problem from a programming side for years, but also
Speaker 2: from a monetary perspective, where in the way of the
Speaker 2: Great Financial Crisis, people began to distrust the government, they
Speaker 2: began to distrust financial institutions. I mean, I remember when
Speaker 2: I went independent as a financial advisor in two thousand
Speaker 2: and six, and people would say, Josh, are you sure?
Speaker 2: How could you not work for Merrill Lynch or Morgan
Speaker 2: Stanley or bear Stearns or Lehman Brothers or all these
Speaker 2: companies that now don't exist. But back then, if people
Speaker 2: were to trust you with your money, you know, you
Speaker 2: had to have two first names, you know, something like that.
Speaker 2: So I remember that was the biggest knock I would
Speaker 2: have when I started my company, was you know, who
Speaker 2: were you? And we would use Fidelity as a custodian
Speaker 2: or you know, a reputable third party canstodian like Schwaber Fidelity.
Speaker 2: But still that was a big thing then it isn't
Speaker 2: really now and we have bitcoin to thank for that.
Speaker 2: So really, bitcoin is the answer to a problem of
Speaker 2: people having distrust in their government, distrust in the FED,
Speaker 2: distrust in financial institutions.
Speaker 1: Yeah, when you had all these financial institutions, I mean
Speaker 1: everyone who was around then can remember the outrage that
Speaker 1: came with the bailout where you had these financial institutions
Speaker 1: that had been issuing these incredibly risky mortgages, and ultimately
Speaker 1: it became like a house of cards that collapsed in
Speaker 1: on itself inevitably. I mean, in hindsight we say inevitably.
Speaker 1: At the time, I think everyone just thought number go up,
Speaker 1: and it turned out number does not always go up.
Speaker 1: Sometimes number go down. And to your point, the idea
Speaker 1: of a decentralized and untied to any particular fiat currency
Speaker 1: alternative became really attractive to a lot of people where
Speaker 1: they realized this would be an approach where you don't
Speaker 1: have to worry about some institution making a bad call
Speaker 1: and potentially putting not just your wealth, but like global
Speaker 1: wealth and jeopardy as a result, and I think there
Speaker 1: were really some noble intentions there. With all systems, I
Speaker 1: would argue, we would see those intentions sometimes get a
Speaker 1: little twisted along the way. And part of that is
Speaker 1: because the digital currency opened up opportunities for things that
Speaker 1: were outside the realms of the law, and that certainly
Speaker 1: became a problem as well because it became associated with
Speaker 1: the concept of digital currency. Overall, some of the problems
Speaker 1: of digital currency have been brought about by some of
Speaker 1: the biggest evangelists of digital currency, some of the people
Speaker 1: who founded cryptocurrency exchanges, for example, I mean Sam Begman,
Speaker 1: Freed being the obvious example of somebody who it turned out,
Speaker 1: was grossly mismanaging customer wealth for the purposes of trying
Speaker 1: to cover what essentially amounted to bad bets with his
Speaker 1: hedge investment fund for Alameda Research, taking the money from
Speaker 1: FTX and putting it into Alameda, and ultimately dooming both
Speaker 1: of those organizations. So with all this in mind, I'm
Speaker 1: curious as to what your general take on cryptocurrency is,
Speaker 1: because one, it's still a relatively young technology, a relatively
Speaker 1: young investment opportunity. Two, a lot of the organizations surrounding
Speaker 1: cryptocurrency are ones that have shaky reputations. You know, the
Speaker 1: SEC is currently involved in investigating numerous cryptocurrency related companies
Speaker 1: like Coinbase, I think is one of them. So with
Speaker 1: all that in mind, how do you view crypto as
Speaker 1: far as an investment opportunity. Is it something that you
Speaker 1: think requires very careful analysis? Because to me, when I
Speaker 1: look out there, it just looks like a minefield, or
Speaker 1: at least a really complicated path to walk.
Speaker 2: Yeah, I have to get my legal disclaimer. I'm not
Speaker 2: recommending anyone invest in any particular cryptocurrency. Cryptocurrency is fraught
Speaker 2: with risk. That being said, I think you need to
Speaker 2: distinguish bitcoin, which is a proven cryptocurrency with a very
Speaker 2: valid use case as digital gold, from everything else. I mean,
Speaker 2: I even have problems with ethereum because I think proof
Speaker 2: of steak has Although it has opportunities, I think that
Speaker 2: it's fraught with peril. I don't like that we know
Speaker 2: the founder. I don't know that there's a central actor risk.
Speaker 2: There's attributes to bitcoin fixed quantity, digital gold, uncoonfiscatable money
Speaker 2: that I like as opposed to pretty much every other cryptocurrency.
Speaker 2: So although I guess i'd be a bitcoin maximalist or
Speaker 2: foundationalist maybe, I mean, because certain things have certain use
Speaker 2: cases and I'm not that big of a techie, you know. Yeah,
Speaker 2: so I can't tell you, okay, the use you know,
Speaker 2: but NFTs to me, you know, it was that was
Speaker 2: like a scam for you know, you to have, you know,
Speaker 2: your favorite cup of coffee with Gary Vaynerchuk or something,
Speaker 2: and then you get the dumb looking cartoon. I mean,
Speaker 2: there will definitely be certain use cases in the metaverse
Speaker 2: or web three, but that really is not what I'm
Speaker 2: interested in to me, And I think what you said
Speaker 2: before a couple of things. You brought up volatility in bitcoin.
Speaker 1: Yeah, just because you.
Speaker 2: Believe in the use case doesn't mean it's going to
Speaker 2: not be volatile. If you think about Amazon, for the
Speaker 2: first twenty years of Amazon's existence, highly volatile. No one
Speaker 2: would really question Amazon's viability now, same thing with apples.
Speaker 2: So I do bitcoin like an exponential technology, just like
Speaker 2: Amazon or Tesla. I mean, it's far bigger than that.
Speaker 2: It is a far bigger potential market share. If it
Speaker 2: just gets the market share gold gets, bitcoin could be
Speaker 2: a million dollars of coin and as sovereign wealth funds
Speaker 2: start to allocating. As an investment advisor start allocating. I mean,
Speaker 2: we really don't even have clarity as an investment advisor.
Speaker 2: I can't say, like if I was in an ideal
Speaker 2: world diversification, right, you could say I'm going to allocate
Speaker 2: one or two percent of all portfolio to bitcoin. That
Speaker 2: would be a sensible thing, right. We can't do that
Speaker 2: like you can with an SMP fund because we have
Speaker 2: to get cryptocurrency disclosures, bitcoin disclosures. So once the regulatory
Speaker 2: clarity comes that it's a respected asset classes, I think
Speaker 2: it's just going to be even a greater amount per coin.
Speaker 2: Now that being said, I think one hundred thousand bitcoin
Speaker 2: is precisely because ETFs. Let's not forget this is the year.
Speaker 2: You can now go in your brokerage fund and you
Speaker 2: could buy a low cost bitcoin ETF like ibit or
Speaker 2: GBTC or FBTC. And I'm not recommending you buy those,
Speaker 2: but they're like a fraction of what bitcoin used to cost.
Speaker 2: I mean, and I mean it's free theorey you know
Speaker 2: with your money, you know, you pay fees on the network.
Speaker 2: But I do find that interesting that in the asset
Speaker 2: class that was supposed to pride itself in not having
Speaker 2: financial intermediaries. Now it does. But I guess it's a
Speaker 2: part of it emerging from a very nascent technology. That's
Speaker 2: the thing you need to make a lot of distinguishing.
Speaker 2: You brought up three big things that are you write
Speaker 2: a book on this volatility and bitcoin FTX and bitcoin
Speaker 2: criminals in bitcoin. But you have to distinguish Sambangmin Freed
Speaker 2: FTX is not bitcoin, right, you know, sam Bangmin Freed
Speaker 2: is a fraudster who convicted. It'd be like us saying
Speaker 2: stocks have no merit because you know, I don't know
Speaker 2: some stock broker was a fraud sight Trum, yeah, or
Speaker 2: you know the Wolf of Wall Street. You know, like,
Speaker 2: it doesn't mean that stocks are not a viable asset class.
Speaker 2: And then criminals in bitcoin just because criminals use it,
Speaker 2: I mean criminals have used life insurance to wander money,
Speaker 2: you know. So I think as it becomes a more
Speaker 2: embraced technology, what's funny is it's getting embraced now by
Speaker 2: firms like Fidelity and Schwab and the only firm I
Speaker 2: think that didn't embrace it was Vanguard. And there's been
Speaker 2: a lot of negative press that they've experienced because they
Speaker 2: haven't embraced it.
Speaker 1: We'll have more to say with Josh from the Financial
Speaker 1: quarterback in just a moment, but first a quick break
Speaker 1: to thank our sponsors. So, in the old, old old days,
Speaker 1: a bitcoin, if you had just started back when, you
Speaker 1: could actually have your PC potentially successfully mine a block
Speaker 1: of bitcoin because it was idling and it solved the
Speaker 1: really hard math problem first, which those days, y'all are
Speaker 1: long gone. So don't think that you're old, like five
Speaker 1: year old PC is going to mine some bitcoin for
Speaker 1: you. You're up against some massive networks that are working on
Speaker 1: those problems now. But back in the day, if you
Speaker 1: didn't mind bitcoin, or if you had a transaction where
Speaker 1: someone sent you bitcoin, you know, you had to put
Speaker 1: those assets into a digital wallet, and more often than not,
Speaker 1: that digital wallet would just live on a hard drive.
Speaker 1: I mean, there's the famous story about the guy who
Speaker 1: ended up throwing out his PC without remembering to remove
Speaker 1: the digital wallet from his PC and like scouring the
Speaker 1: dump trying to find this thing because there were tens
Speaker 1: of thousands of dollars just represented in that digital wallet
Speaker 1: and he didn't have access to it. So you could
Speaker 1: have your digital wallet stored on a local machine, or
Speaker 1: you could be using a service kind of like what
Speaker 1: FTX was, which was, you know, a cryptocurrency exchange, but
Speaker 1: you could have an account with that and have your
Speaker 1: holdings in that account. One of the problems is that
Speaker 1: SBF was apparently taking money from customer accounts in order
Speaker 1: to cover the investments of our at alimated research. That
Speaker 1: to me is another one of those those hurdles. It's
Speaker 1: not just an element of trust with knowing that there
Speaker 1: are some bad actors out there, it's how do you
Speaker 1: know like the right approach. Let's say that you are
Speaker 1: interested in investing in crypto, and you've done your research
Speaker 1: and you figured out which cryptocurrency is interesting to you,
Speaker 1: figuring out where you're going to store that ends up
Speaker 1: the coming an issue that I think most people don't
Speaker 1: even otherwise think about, right like, it's going to have
Speaker 1: to sit on a physical space somewhere, whether that's under
Speaker 1: your control or in a cryptocurrency exchange or something similar.
Speaker 1: With the failure of FTX, I think that had brought
Speaker 1: into question how much can you trust these other third
Speaker 1: party entities? And it's interesting to me to see that
Speaker 1: issue unfold, because it kind of makes me think back
Speaker 1: to the two thousand and eight crisis, where again, there
Speaker 1: you didn't know who to trust with these institutionalized financial systems.
Speaker 1: It's a different flavor but a similar story. And now,
Speaker 1: like the question is how do you figure out who
Speaker 1: to trust in the digital landscape so that you can
Speaker 1: feel confident, Like even if you made a bad bet
Speaker 1: with backing a cryptocurrency that's just not doing well, at
Speaker 1: least you would still be able to access those assets.
Speaker 2: Well, I mean they're the old not your keys, not
Speaker 2: your bitcoin, you know, have have your bigcoin or cryptocurrency.
Speaker 2: I'm a big believer in cold storage if you can
Speaker 2: learn how to use it. Their companies like Ledger, Treasure
Speaker 2: cold wallet where you can google or YouTube videos on
Speaker 2: how to do your own cold storage for people don't know.
Speaker 2: You know, you can hold your bitcoin right in a
Speaker 2: little device. The cold wallet's like a little calculator looking thing.
Speaker 2: You can have it on an exchange like Coinbase. One
Speaker 2: method is you can also have it through a more
Speaker 2: traditional financial institution now like Fidelity, which has way more
Speaker 2: price controls and they're even holding people's bitcoin. In some
Speaker 2: cases they have bitcoin custody for people who it's too
Speaker 2: difficult for. So it used to be you had to
Speaker 2: really know what you were doing. Now you can actually
Speaker 2: hold the physical bitcoin and you don't have to be
Speaker 2: an expert. Their company is like Unchained and Kaso, where
Speaker 2: you know, you can have multi signature wallets where if
Speaker 2: you don't trust yourself and you think you might lose
Speaker 2: your bitcoin or you might lose your crypto. I mean
Speaker 2: generally though, if you if you're owning bitcoin, start with
Speaker 2: whether it's if you if it's bitcoin, start with a
Speaker 2: few satoshi's, see if you have the wherewithal to do
Speaker 2: cold storage on your own. But then there are reputable
Speaker 2: exchanges where they subject themselves to audits, you know, like
Speaker 2: New York has a Department of Cryptocurrency. It's a little
Speaker 2: more stringent than others, right, but to me, you know,
Speaker 2: I liked it. A company like fidelities into it, you know,
Speaker 2: so you know they have certain controls in place that
Speaker 2: were made with regulatory oversight in potential purview. You know,
Speaker 2: you got a roase. A lot of these companies, like Fidelity,
Speaker 2: we're doing it. Everybody's bullsh on bitcoin and crypto now
Speaker 2: because they're thinking, hey, Trump's in his sec is going
Speaker 2: to be a little easier on bitcoin and crypto. Gary
Speaker 2: Gensler just announced that he was stepping down. Although Gary Gensler,
Speaker 2: people forget this. He has an excellent video of his
Speaker 2: MIT You ever see tho as the MIT lectures? Yeah,
Speaker 2: those were excellent. I mean he had a deep knowledge
Speaker 2: of it, and I think he was trying to embrace
Speaker 2: the technology but root out the criminals. Right, So there's
Speaker 2: a distinction there. But you know, sadly, I don't think
Speaker 2: all of his things which got a bad rap for
Speaker 2: were bad. Yeah, And I think he had a deep
Speaker 2: knowledge of cryptocurrencies and bitcoin in particular, where you know,
Speaker 2: it's the wild West some of these cryptocurrencies. That's why
Speaker 2: to me, if you're just starting out, buy a few
Speaker 2: setoci's by you know, to me, bitcoin is the more
Speaker 2: proven method ethereums you're number two the rest. I mean,
Speaker 2: you know, a lot of what I find too is
Speaker 2: people are just trying to find the next big thing
Speaker 2: to feel like, oh I missed out on bitcoin, right,
Speaker 2: so I want to buy some alt coin that may
Speaker 2: have the potential of an epic rhyme. But what is
Speaker 2: the utility of these tokens, what's the purpose, Like, has
Speaker 2: no purpose. I would not put my money in Doze,
Speaker 2: just as a principle, Like, just on principle.
Speaker 1: Yeah, Doge was founded as a joke, and sometimes people
Speaker 1: remember that and they still put their money in, which
Speaker 1: to the point where like the creator of doge is
Speaker 1: like I thought I was making satire and it turns
Speaker 1: out that I made something that despite people's better judgment,
Speaker 1: they believe in it, and you know that makes that
Speaker 1: value fluctuate wildly as well. But ultimately you need to
Speaker 1: remember Doze was created as a joke. But to your point,
Speaker 1: a lot of these alt coins, I think they're meant
Speaker 1: to be a way to fund some other venture that
Speaker 1: is related to the blockchain, and the token is kind
Speaker 1: of their way of getting investment rounds to fund whatever
Speaker 1: that venture is. And like I said, the best organizations
Speaker 1: are really transparent about it. The danger I see is
Speaker 1: that a lot of people look at that as saying, oh,
Speaker 1: that's going to be the next bitcoin, and even the
Speaker 1: organizations around those ventures are like, that's not what we're
Speaker 1: saying at all. Don't assume that we're like poised to
Speaker 1: become the next bitcoin. We're trying to fund something we
Speaker 1: believe in. And then of course you have your other
Speaker 1: groups where it's like much more shady, where they're looking
Speaker 1: at any opportunity and maybe even a rug pull situation
Speaker 1: down the line. But I think you're absolutely right in
Speaker 1: that if you are interested in looking at at cryptocurrency
Speaker 1: from an investment perspective, going with the more established ones
Speaker 1: makes far more sense than just hoping that some fly
Speaker 1: by night alt coin that launched in the last three
Speaker 1: months is going to repeat the success of even Ethereum.
Speaker 1: Like Ethereum alone is pretty darn successful. It's not stratospheric
Speaker 1: like Bitcoin became. But you know that's just the to me, like,
Speaker 1: that's just foolish. If you're doing now, if you believe
Speaker 1: in whatever the organization is doing, that's different. Like if
Speaker 1: you think I'm investing and I'm supporting something I believe in,
Speaker 1: I feel a lot more comfortable about that rather than
Speaker 1: just man, I wish i'd bought bitcoin back when it
Speaker 1: was you know, ten thousand to a dollar. Yeah, we
Speaker 1: all do, so, I agree one hundred percent. The other
Speaker 1: thing that always gives me pause the steps beyond the
Speaker 1: financial aspect, is that because bitcoin is proof of work,
Speaker 1: that does mean that in order for systems to be
Speaker 1: able to mine a block of bitcoin, they have to
Speaker 1: dedicate a truly tremendous amount of compute power to do that,
Speaker 1: because when you're up to like one hundred thousand dollars
Speaker 1: per coin, then there's a huge incentive to be the
Speaker 1: first to solve that next block of transactions. And so
Speaker 1: we're starting to see not starting, we have seen these
Speaker 1: large networks form where they're even taking over old defunct
Speaker 1: electric power plants in order to be able to get
Speaker 1: enough electricity to do this, because at scale it makes
Speaker 1: sense like if you are able to mine enough bitcoin,
Speaker 1: you can actually pay for that level of operation, which
Speaker 1: then brings in the concern about how much electric is
Speaker 1: being consumed. Ultimately that comes that also goes down to
Speaker 1: where's the electricity coming from? How is this contributing to
Speaker 1: other factors like carbon footprint. To me, that's another one
Speaker 1: of those things that I think people need to look
Speaker 1: into and understand before they get in and just to
Speaker 1: be able to answer the question is am I okay
Speaker 1: with entering into this world? I think being informed is
Speaker 1: the most important part rather than jumping in because you
Speaker 1: just you think that there's an opportunity there, and you're
Speaker 1: worried you're going to miss out.
Speaker 2: Yeah, I've thought deeply about the use of power and electricity.
Speaker 2: I mean, I think from a fundamental perspective, right, if
Speaker 2: government no longer has the monopoly on money, right like
Speaker 2: at its core. Not to get too out in left field,
Speaker 2: but if we didn't have governments fight about money, think
Speaker 2: about how many wars were fought over gold. Sure there
Speaker 2: could be wars fought over bitcoin in the future. And
Speaker 2: I think it's very good develop that the US is
Speaker 2: embracing it and the US government's embracing it, because if
Speaker 2: we embrace it, we can focus on clean energy. A
Speaker 2: lot of bitcoin minors, you know, they're big in clean
Speaker 2: energy in places like Washington, and they're they're providing jobs,
Speaker 2: and they're they're they're kind of retooling things in a way.
Speaker 2: But I think if you had no more wars about money,
Speaker 2: I'm not saying we won't have any more wars. You know,
Speaker 2: here's some of these bitcoin people. They you know, bitcoin
Speaker 2: solves everything, you know, bitcoin fixes every problem in the world.
Speaker 2: That can be ridiculous, But what they mean is an
Speaker 2: honest person who might use that kind of phrase say,
Speaker 2: if we have think about this, If we have a government,
Speaker 2: let's say the US, I fundamentally think whether it's Trump
Speaker 2: Elon Vivic in this next administration wherever you kind of fall,
Speaker 2: I think Elon On. I know, I think deeply about this.
Speaker 2: The US is losing its strength in the world because
Speaker 2: other countries don't trust that we will manage our own
Speaker 2: finance as well. And bitcoin just the act of a
Speaker 2: competitor to the dollar, even though it's just such a
Speaker 2: fraction of the dollar. But the fact that El Salvador
Speaker 2: is now embracing bitcoin and other third world countries that
Speaker 2: they don't have to do everything in US dollars may
Speaker 2: make our country behave a little better. It will It
Speaker 2: may make us have a more sound currency, which will
Speaker 2: fix a lot. And I think if we embrace sort
Speaker 2: of the bitcoin philosophy, the philosophy behind bitcoin of sound
Speaker 2: money at its core, I think you'd have less wars,
Speaker 2: you'd have less electric use less. I think about how
Speaker 2: much power war takes, you know.
Speaker 1: So in a way, you're saying that the the existence
Speaker 1: of bitcoin and it's evolution and its success can help
Speaker 1: shake the United States out of a sense of complacency
Speaker 1: that otherwise allowed for a lot of entropy to build
Speaker 1: up as far as as the US dollar, like, we
Speaker 1: took a lot for granted because of where we arrived at,
Speaker 1: and now bitcoin's kind of shaking that up a bit
Speaker 1: in a way. That does come down to the very
Speaker 1: basis of competition, right, the idea that competition forces competitors
Speaker 1: to continually innovate and do better than before or else
Speaker 1: risk losing.
Speaker 2: You know, there's the bricks currencies, there's you know, the
Speaker 2: transpecific partnerships, which was going to be with the US,
Speaker 2: now it's with China. I think other countries are waking
Speaker 2: up to the fact that we can just manipulate our
Speaker 2: currency and they're screwed, and currency wars you might call it.
Speaker 2: You know, the big example might be okay, Russia might
Speaker 2: go to more gold, or might they might go to
Speaker 2: more bitcoin, or China might go to more bitcoin because
Speaker 2: they say, you know what, we're just looking to diversify. Now,
Speaker 2: I think long are I think over exaggerated. Is there
Speaker 2: are those stories that say the dollar is going to
Speaker 2: be worthless?
Speaker 1: Right.
Speaker 2: I don't believe we will wake up and say the
Speaker 2: usd will be worthless, but it may become worth a
Speaker 2: little bit less every year. It of course is that's happening,
Speaker 2: that's inflation. But I think, what when people think they
Speaker 2: think conspiracy theories, I'm just talking about using the dollar
Speaker 2: in world trade. That I think in twenty sixteen, the
Speaker 2: US dollar accounted for seventy percent of all war of trade.
Speaker 2: So just you know, so many years ago, less than
Speaker 2: a decade ago, we counted for seventy percent of all
Speaker 2: war trade. That number to day is about sixty percent.
Speaker 2: Ten years in the amount might be fifty. And you
Speaker 2: know what, the US's biggest competitors is not bitcoin, It's
Speaker 2: not the Chinese. Remember, it's the Euro, which just kind
Speaker 2: of funny. You wouldn't have thought the Euro would be
Speaker 2: such a competitor. But it's just countries looking they don't
Speaker 2: want to be solely align on the dollar.
Speaker 1: We which I mean from a even just from a
Speaker 1: national security perspective, makes total sense. I mean, like, if
Speaker 1: you're not the US, of course, you don't want to
Speaker 1: be dependent upon some other nation's currency to have such
Speaker 1: incredible power over your own fate. This is Jonathan post
Speaker 1: interview here to let you know that all this financial
Speaker 1: insight doesn't just pay for itself. So we're going to
Speaker 1: take a quick break to thank our sponsors and we'll
Speaker 1: be right back. I'm curious when you first got into
Speaker 1: the world of finance, did you ever dream that you
Speaker 1: were going to see a time where a new system
Speaker 1: would rise up, a digital system would rise up and
Speaker 1: go through such incredibly fast evolution and maturity right in
Speaker 1: front of your eyes.
Speaker 2: You know. I think the biggest regret I have is,
Speaker 2: you know, my friend in twenty ten who was kind
Speaker 2: of a pothead, you know, tech guy, Yeah, turned me
Speaker 2: onto bitcoin. I'm like, this is ridiculous, you know. Yeah,
Speaker 2: I'm not doing it, you know. And then twenty fifteen
Speaker 2: another guy, Hey, you know, you got to get in.
Speaker 2: He showed me. I think when I really saw it
Speaker 2: taken off was twenty twenty. Yeah, Like that's when I
Speaker 2: became a full on bitcoin believer. Now I'd embraced bitcoin,
Speaker 2: like as an asset diversification play for a few years prior, like, hey,
Speaker 2: you know, put a little bit in, you know, as
Speaker 2: an alternative gold. I saw the value, but I really
Speaker 2: began to think that it was needed when I went
Speaker 2: to my bank in COVID. Did you go to the
Speaker 2: bank during COVID and try to get money out.
Speaker 1: I did not, but I know of people who did.
Speaker 2: And I did all of the things that the Bitcoin
Speaker 2: white Paper and the Bitcoin Maxi's who sound wacky warn
Speaker 2: you of. I could not get more than five thousand
Speaker 2: dollars cash out, and I was looked at like I
Speaker 2: was a criminal. This was in the middle of COVID,
Speaker 2: and if I didn't know my banker, they were limiting
Speaker 2: people to three thousand dollars USD. And that's when I
Speaker 2: really saw hm. I totally not just get it a
Speaker 2: little bit. I embraced the whole philosophy because it just
Speaker 2: irked me that we were in a middle of national crisis.
Speaker 2: I couldn't get my money on my own bank. Yeah,
Speaker 2: and bitcoin does fix that issue if you own it
Speaker 2: on cold storage, you know.
Speaker 1: Yeah, I mean we've It's funny because your story makes
Speaker 1: me think Silicon Valley Bank that was a one.
Speaker 2: Yeah.
Speaker 1: I remember distinctly when that story started to break because
Speaker 1: I was in the Atlanta airport. I was waiting to
Speaker 1: board a flight to Austin, Texas for south By Southwest,
Speaker 1: and as you might imagine, more than a few people
Speaker 1: who are waiting for that flight to go to this
Speaker 1: big tech conference, were starting to have their phones blow
Speaker 1: up in their hands as the story about Silicon Valley
Speaker 1: banks collapse was breaking. But again to your point, it's
Speaker 1: that idea of finding out that you suddenly can't get
Speaker 1: the money that you've entrusted into and a financial institution
Speaker 1: you can't get it back, and through no fault of
Speaker 1: your own, you have done nothing wrong, but that now potentially,
Speaker 1: at least for the time being, you've lost access and
Speaker 1: in worst case scenario, you've lost it now. Fortunately with
Speaker 1: Silicon Valley Bank, the government stepped in and you know, said,
Speaker 1: don't worry, We're going to guarantee that everybody gets their money.
Speaker 1: But that was an unknown thing.
Speaker 2: That was a very scary twenty four hours. I remember that,
Speaker 2: and if it wasn't for you know, Janet Yellen gets
Speaker 2: a lot of flak, but they really saved the banking
Speaker 2: system that weekend. Whoever was involved in that doesn't get
Speaker 2: half the credit they should get because I remember that.
Speaker 2: I mean, people were just trying to pull as much
Speaker 2: money out of this system. It wasn't even Soilicon Valley
Speaker 2: people were really scared. The fear on that day, and
Speaker 2: that's when they came out and people said, well, why
Speaker 2: did they give Remember they said you will have unlimited protection.
Speaker 1: Hmm.
Speaker 2: People thought that was ridiculous. I think why they needed
Speaker 2: to say that was because a lot of these banks,
Speaker 2: you know, they have wealthy tech billionaire, tech hundred millionaire,
Speaker 2: and somebody's one hundred million dollars on deposit. They were
Speaker 2: trying to pull all their money.
Speaker 1: Well, yeah, you have tech companies that were dependent upon
Speaker 1: it for things like payroll. You had venture capitalists who
Speaker 1: were dependent upon it as like that was their bank
Speaker 1: of choice so that they could funnel the investments through
Speaker 1: two different companies they wanted to support it. Really, I
Speaker 1: think it pulled back the curtain quite a bit on
Speaker 1: just the money side of Silicon Valley. Like again, I
Speaker 1: typically cover the tech side, not the money side so much.
Speaker 1: I'll cover the money side with regards to how it
Speaker 1: impacts the tech side, but I have never pretended to
Speaker 1: really understand the money side. I've always told people I
Speaker 1: actually have the easiest job in the world, because ultimately
Speaker 1: tech either works or it doesn't work. It's really easy
Speaker 1: to explain when you really get down to it. Money
Speaker 1: to me ends up being one of those things where
Speaker 1: I'm like, well, I know how it or at least
Speaker 1: I think I know how it should work. But time
Speaker 1: and again I am surprised and taken off guard, and
Speaker 1: I just my hat is off to you, sir, because
Speaker 1: I certainly could not do what you do.
Speaker 2: And vice versa. I I when I meet with the
Speaker 2: tech guys, particularly within the bitcoin community, it's like in
Speaker 2: one ear and out the other.
Speaker 1: Se Yeah, I just sit there and say, like, listen,
Speaker 1: it all comes down to math problems. It's just math problems.
Speaker 1: And you don't have to worry about your computer is
Speaker 1: trying to fix it. You just you let it go.
Speaker 1: That's as close.
Speaker 2: Unless I just don't get the form you know, oh yeah, yeah,
Speaker 2: the formulas, but I get the philosophy. I think. I
Speaker 2: think for me, it's it's just human nature, right, It's
Speaker 2: fear and greed, and that's the thing that people have
Speaker 2: to watch right now. The fear is I'm gonna have fomo, right,
Speaker 2: I'm not going to invest in bitcoin now, I'm gonna
Speaker 2: invest in some alt coin hoping I'm gonna get rich quick.
Speaker 1: Yeah, that'll ride Bitcoin's coattails.
Speaker 2: But I mean, personally, I've seen a lot of people
Speaker 2: get hosed and lose half of their life savings doing that.
Speaker 2: So be very careful. Don't put anything that you are
Speaker 2: not willing to go down significantly. Bitcoin's very volatile, Yeah,
Speaker 2: but I don't think it's volatile because you brought up that.
Speaker 2: It's a good point. Volatility does not mean something is
Speaker 2: in an invalid concept, right. It means it's an emerging
Speaker 2: exponential technology. There will come a time if the Bitcoin
Speaker 2: maximalists or foundationalists, if the world that they envisioned years
Speaker 2: ago comes true, that Bitcoin will be almost like a
Speaker 2: legacy kind of gold life like asset, and it will
Speaker 2: be very slow growth. Yeah, but that's only when people
Speaker 2: wake up. And there may come a time where people
Speaker 2: wake up and just go Bitcoin's million dollars coin is
Speaker 2: unreachable for the average person, and it becomes this legacy
Speaker 2: type of sovereign wealth asset because it's only twenty one million,
Speaker 2: that's all that ill will be mined.
Speaker 1: Yeah, but I.
Speaker 2: Believe it'll be sort of like a base layer and
Speaker 2: there'll be things built on top of it, similar out
Speaker 2: ethereum has, but they'll be there are people who believe
Speaker 2: in the philosophy of hard money. They want a better money.
Speaker 2: They want a better financial system, one that doesn't exist
Speaker 2: off of leverage and derivatives. And that's I think fundamentally
Speaker 2: the beauty of the Bitcoin protocol and the bitcoin philosophy
Speaker 2: is it's sort of like a way of life, although
Speaker 2: some people it's like a cult.
Speaker 1: But yes, yeah, I always caution really for anything within tech,
Speaker 1: but specifically like NFTs you brought up are an example,
Speaker 1: and various cryptos are ones that I caution people on.
Speaker 1: I say, if someone is really trying hard to convince
Speaker 1: you about the validity of a specific digital asset, it's
Speaker 1: good to consider how deeply invested they are in that
Speaker 1: digital asset and bring that into consideration before you make
Speaker 1: any moves, simply because sometimes people are drumming something up
Speaker 1: because the value of the thing they've invested in increases
Speaker 1: with more people joining the ecosystem, and if they're a
Speaker 1: cheerleader because they're trying to get more people to come
Speaker 1: on so that their own investment ends up increasing, it
Speaker 1: starts to look a little too close to like a
Speaker 1: pyramid scheme. Not saying that they are, but that that
Speaker 1: starts to get that kind of feeling. And the more
Speaker 1: that happens, the less trust exists in that environment, and
Speaker 1: that can lead to its own sort of disaster through
Speaker 1: no fault of the underlying system. Right, it's when we
Speaker 1: add humans to it that things get messy. So you know,
Speaker 1: it's one of those those topics that I've I've been covering.
Speaker 1: We launched tech Stuff a couple of months before the
Speaker 1: Bitcoin white paper came out, so I've literally been doing
Speaker 1: this show just as long as bitcoin has been a thing,
Speaker 1: and I remember trying to get my head wrapped around
Speaker 1: blockchain for the longest time, and I feel like I've
Speaker 1: got a decent understanding of it. I'm still struggling as
Speaker 1: to whether or not it makes sense to be an
Speaker 1: underlying foundation for Web three, but I certainly understand it
Speaker 1: as far as what crypto does and to an extent,
Speaker 1: what NFTs were supposed to do. I think n FTS
Speaker 1: that was unfortunate and that it turned into a speculative
Speaker 1: market before we could actually see what NFTs could potentially
Speaker 1: do outside of just an investment. The idea of having
Speaker 1: a way of validating and keeping track of digital assets
Speaker 1: and digital ownership. I can definitely see a need there.
Speaker 1: I just don't think NFTs ever, I had a chance
Speaker 1: of hitting that because speculation followed so quickly on people
Speaker 1: realizing what they were. But again, that's it. That's like
Speaker 1: adding people to a system, like the system would have worked,
Speaker 1: except we had people. Darn people. Well, Josh, thank you
Speaker 1: so much for joining our show and kind of providing
Speaker 1: us your insight. Again, this is something I could never
Speaker 1: offer my listeners myself. It is so outside of my
Speaker 1: expertise and people. You should go and check out the
Speaker 1: Financial Quarterback. That show has been going on for a
Speaker 1: little more than forty episodes. Now you've got episodes on bitcoin.
Speaker 1: I love also, by the way, your episode about being
Speaker 1: wary of people who are really evangelizing investments, not just
Speaker 1: in the tech space, but just in general, and using
Speaker 1: critical thinking to analyze those pitches, because certainly in the
Speaker 1: tech space we have seen it time and again where
Speaker 1: people take advantage of enthusiasm, a fear of greed, and
Speaker 1: largely of ignorant It's if someone doesn't know how a
Speaker 1: system works, it becomes much easier to kind of fool
Speaker 1: them into thinking this is a money printing machine. So
Speaker 1: I think you're doing a real service by educating people
Speaker 1: about these sorts of things and what to look for
Speaker 1: and the questions to ask before you start to commit
Speaker 1: your own wealth to these kinds of potential investments.
Speaker 2: No, great, that'd be fun. Yeah, we've been doing It's funny.
Speaker 2: You've been doing it for sixteen years. Yeah, I think
Speaker 2: I started sixteen years ago on the radio Wow, and
Speaker 2: then we launched our you know, kind of reimagine podcast.
Speaker 2: So right around the great financial crisis in a eight.
Speaker 1: All the time to get involved, right, I mean.
Speaker 2: And I've seen all these strange things. But yeah, that's
Speaker 2: a good tip. As we're kind of talking about crypto
Speaker 2: kind of closing tip, don't do anything because of guru me, you,
Speaker 2: anybody does it. Do do your own homework, do your
Speaker 2: own due diligence. And also position sizing. If you're getting
Speaker 2: into something, do a small percentage of your portfolio one percent,
Speaker 2: two percent, three percent. That way, if it gets cut
Speaker 2: in half, you can still sleep at night.
Speaker 1: Yeah, you've got You've got the safety net there. I
Speaker 1: think that's great advice in general, especially now that we're
Speaker 1: entering into a world where influencer culture is having a
Speaker 1: larger impact, especially for younger people like you see the
Speaker 1: platforms like TikTok or Instagram, where very complex ideas and
Speaker 1: philosophies are getting summarized and sometimes dumbed down so that
Speaker 1: they fit into like a thirty second video package. And
Speaker 1: the danger I feel of that is that it gives
Speaker 1: viewers a sense of understanding when the topic that they're
Speaker 1: actually tackling is far more subtle and complex and nuanced
Speaker 1: than any thirty second message could hope to convey. Well, Josh,
Speaker 1: thank you, thank you again for joining the show. Y'all,
Speaker 1: it is the Financial Quarterback. You need to go check
Speaker 1: out that episode that I was talking about, the specifically
Speaker 1: the one about out using critical thinking in the approach,
Speaker 1: because that's again the guiding philosophy of tech stuff is
Speaker 1: critical thinking and compassion. Those two things go together. Without
Speaker 1: critical thinking, you're a dope, and without compassion you're a jerk.
Speaker 1: So let's use both.
Speaker 2: Episode thirty eight, how to Spot a False Profit in
Speaker 2: the World of Finance.
Speaker 1: Yeah, it's fantastic, like highly recommended. I mean again, like
Speaker 1: if you need to exercise that critical thinking skill, and
Speaker 1: I'm always thankful to see other podcasters who advocate for that. Josh,
Speaker 1: thanks again so.
Speaker 2: Much, thanks for having me Johnson.
Speaker 1: This is after the interview y'all. I want to say
Speaker 1: again thanks to Josh for coming on to the show.
Speaker 1: As you can see, Josh has a different perspective on
Speaker 1: bitcoin than I do, which I think is valuable, right,
Speaker 1: Like I think it is important to get different perspectives
Speaker 1: and not just go through life in an echo chamber.
Speaker 1: So I really appreciate him coming on the show and
Speaker 1: giving me his insight because coming at it from a
Speaker 1: financial standpoint as opposed to the tech standpoint, you can
Speaker 1: come to some very different conclusions and I found it
Speaker 1: fascinating and honestly, it was nice to get a little
Speaker 1: bit of demystification around finance. So Josh, thanks so much.
Speaker 1: I hope all of you enjoyed this special episode. We're
Speaker 1: gonna have another one for you on Wednesday, so I'm
Speaker 1: looking forward to that. We're gonna be talking to some
Speaker 1: scientists about science, so make sure you tune into Wednesday's episode.
Speaker 1: That's it for me. I hope you're all well, and
Speaker 1: I'll talk to you again really soon. Tech Stuff is
Speaker 1: an iHeartRadio production. For more podcasts from iHeartRadio, visit the
Speaker 1: iHeartRadio app, Apple Podcasts, or wherever you listen to your
Speaker 1: favorite shows.