Conversations with a Cryptocurrency Investor – Bonus Episode

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[00:00] The Prosperity Podcast, fresh alternative personal finance talk for independent thinkers who prosper outside of Wall Street. With me, I’ve got in-person Scott Paul and Austin Emory. And we’re going to have a conversation about cryptocurrencies and we’re going straight to the source. As this is a special episode, we just wanted to let you know that the views represented in this interview do not necessarily represent the views of Partners for Prosperity. This is presented for informational purposes only and is not intended to be financial advice. So let’s jump into this interview. Scott’s been into crypto for several years. You got in early, not at the ground floor, but you got in fairly early.

[00:52] I got in after Mount Gox, but before the run-up. So it was a good time. Yeah, definitely a good time. So if you could, with our audience, help them understand a little bit more about cryptos, why you decided to get into it and help us understand where you think cryptos are going. There are a lot of experts talking about cryptos and I’m not one of them, and people that have a lot to say about them, I just find that they are just making up stuff too. We don’t really know what this is at the end of the day, like why the price is moving around and stuff like that. But we do know, you know, kind of what the white papers and what they are foundationally, fundamentally, and what they’re trying to accomplish,

[01:32] which is essentially a decentralized currency. And when that was first explained to me to some odd years ago, I was a late night with a close friend of mine in LA, where he took a good four and a half hours to explain to me the very beginning of the guy named Satoshi who wrote the paper about Bitcoin. And essentially he’s the founder who no one knows about or doesn’t even know his identity, but holds a lot of these cryptocurrencies. And he told me the whole story of how it works and how the blockchain works and how the computers are mining these things and how you get the coins and how you transfer the coins. And it all sounded pretty, you know, awesome and sophisticated, but also like when I realized that there was an app called Coinbase where I could

[02:16] just download and get the coins, much like PayPal, and I didn’t have to actually figure out how to put a computer in my basement and hook it all up and put it on a wall. And I didn’t know, that stuff was complicated to me. I’m not, I don’t, I didn’t have time for that. I’m running, you know, full time doing some other stuff. So I learned about Coinbase and I just took a gamble with saying I should have some of my net worth into this cryptocurrency and that time it was Bitcoin and then shortly after I did that, this thing called Ethereum popped up in the app and I’m like, you know what, I’ve heard some good things about it, these smart contracts, da da da da da. Let’s put some into Ethereum. And I just bought and let it ride.

[02:53] And when Litecoin showed up in the same app. So that’s a story of a very unsophisticated way. There’s no magic to it. It was the fact that I wanted to diversify and I’ve done that in stocks. I’ve done that in real estate. I’ve done that in all other parts of my life. So that when there was another asset class, these cryptocurrencies, I did the same practice that I did in everything else, the good thing was that the timing was right and that the diversification was wise, having some Ethereum that’s, you know, today doing relatively well compared to other currencies. I didn’t need to understand everything going on, but as I’ve been in it, I’ve learned more and more of what I have, you know, how to secure it, how to

[03:32] actually mine it, what makes them different. Now there’s a whole bunch of ICOs and altcoins and stuff. I’m a pretty simple vanilla person. I’m not exploring too much beyond some of the, you know, the things that I understand and have a major appeal to, you know, a global population. And a lot of these, you know, the coins that are on the, there’s about 2300. I can’t remember how many there are, but like there’s some that just, I’m not going to go play around and try to guess on a penny stock. It’s not my game. I’m not, I’m not trying to time these things. I’m not buying or trading or sorry. I’m not trading. I’m just, I’m holding, I’m buying and holding, even though everybody tells me every time sell, sell, sell, sell, sell.

[04:09] That’s not my strategy. So why should normal, everyday people put a little bit of money into cryptos for Austin here? Um, I saw Austin every, every other, every month for about a year and a half, what did I tell you in August, probably of 2015, Scott said, Hey, you need to get on this Bitcoin thing. Problems. You, it’s going to be big. And, uh, as the price back then was $300 something dollars, probably for Bitcoin, uh, I don’t even want to think about what it probably was for Ethereum and Litecoin. Um, I mean, you know, since that the dollar or whatever it was. And, um, and I remember him telling me all about it. And I was just like, you know, at the time I didn’t have as much cash and I was, you know, but, uh, I was still looking a little

[05:00] bit for investments and I was kind of like, eh, I don’t know. It seems kind of sketch. And it’s really, uh, you know, very, uh, hesitant to do anything. And then, uh, two years later, all of a sudden, you know, Bitcoin hits 8,000 and, uh, Scott here goes out and evangelizes for it and starts handing out some, uh, some Bitcoin just to try to get other people, you know, cause he felt like he had such a good deal with it. That he was luckily for me, uh, willing to, you know, give away a little cash and I’ll let him talk about that a little more, you know, just to get people on it. And so now, you know, two years later, uh, I hopped on this last fall and, uh, and just got in and just put a little money in and, and

[05:40] kind of just, just to see what would happen. And, and it became very addicting because especially I got in a time where there’s a lot of high growth. And before I knew it, you know, I was putting in, um, you know, uh, not, uh, not a significant, not a huge amount of, of my net worth, but certainly enough that I would make sure that, you know, I’m getting some good returns just because, you know, the, the, as the more I learn about it, the more I see the possibilities, the more I see where, where it’s come from and where it is now and where it’s where, you know, no one really knows, but where people believe it will go, um, you know, as, as a, I would call myself a very, uh, you know, a very casual cryptocurrency buyer, um, and myself too, I’m not

[06:21] a day trader by any means or anything, you know, I’m not watching the charts and selling, selling high trading, you know, whatever. Um, but, uh, it’s the appeal of it is that, uh, for a lot of people, you know, like me, it’s, it’s investments. They see how quickly they can make money off of it. Um, and maybe I’m not, uh, a orthodox crypto guy where I’m like, you know, doing this, cause I know this is the future and in 20 years when Armageddon happens and, you know, we’ll all be, uh, living post-pocalyptic trading Bitcoin. You know, I don’t know that I’m on that train necessarily, but, uh, but, uh, it’s certainly, you know, in, in the several months or a few months I’ve been on it, I’ve been invested in it.

[07:01] Thanks to Scott here, uh, you know, it’s, it’s, it’s definitely treated me pretty well. Um, and I, as far as where it’s going, I, I don’t know exactly, but I’m excited to kind of see in the few investments I have made and I’ve gotten into small coins, you know, what kind of happens. The last thing would be that why should everyone have, there shouldn’t be a soul out there who doesn’t have the time to sign up for a Coinbase and place the hundred dollars to say they, they were here. It’s, it’s, it’s, you know, they were here. Part of this, they took a vote and said, why not challenge the fiat, you know, the, the USD, why not challenge that the premise that that can be the only coin that we can use and kind of has

[07:45] value challenge that by taking a vote and getting yourself a hundred dollars of it. And that’s the, that’s the problem. That’s what I put out on Facebook. I said, if you’re my friend on Facebook and you have not already gotten to Bitcoin, go grab Coinbase and I’ll put $50 in your account and most people on Facebook out of my 800 friends did that actually, and it was more than I expected to give away. But I, I held to my promise and gave thousands and thousands of dollars away that turned into those people, double what they had and it’s a lot of them put their own money into it. So it, it created what I wanted to create, which is, you know, just get, make sure you have some holdings and then this, in this, in this movement that is a once in a lifetime

[08:28] movement, you know, that we get to see and watch a digital asset like this grow out of nothing and mind with computers and no matter how crazy and fake you think it is, it doesn’t, it’s you play fantasy football too. You can get into Bitcoin. You can, we do a lot of irrational, stupid things. This is one that actually might be irrational, stupid that could benefit you and your family for their own generation. So have a, have a stake in it, vote with your dollar and do something. I think that’s a great summary. Scott, what is the, what is your perspective on risk? And I think this will be our final question with risk in Bitcoin. Do you look at it as that you’re trying to get a return on investment or are you more orthodox as Austin was saying

[09:12] that you’re in it because this could be the new wave of the future? This is going to go to philosophy. So I’ve tried to study stoicism and, and how they deal with loss. And, uh, so I’ve already, uh, the stoics of an ancient Greece, you know, they would visualize the most, the worst thing happening every morning and wake up and try to picture their, their family dying, whatever it is. I mean, it sounds really morbid, but the result was that they would be super grateful for everything they have as they visualize these things. And so my, my kind of approach to Bitcoin is I’ve already lost it. Meaning I, I put, let’s call it 50 K. I put 50 K into it. It’s already gone. In my mind. So every day I wake up and it’s anything is, uh, is,

[09:56] it makes me happy. Um, I actually have more angst about selling it and watching it go on to be the future currency than I do of having it go to zero, meaning so my, my decision to go to hold is that I want to be there and, uh, stick through it and, and be, you know, hopefully be rewarded for sticking through it or helping it reinvent the world because, you know, I voted with my dollar and didn’t sell out, um, great. If you make some money during it, I, most people will, if they, if they, you know, jump on this transformation of wealth, it’s happening with, with the new currency coming about, but, uh, I’ve already lost it. And so because it’s already gone in my brain, it’s, uh, it doesn’t allow me to get to a day like

[10:40] today where it’s, you know, dipped down a ton. It doesn’t ruin my day. I’m going to go on and do life and be fine. And if it goes to zero, I’m going to, I’ll be shocked, but I’ll be like, guys, wasn’t that an amazing two years? Like, can you, Matt, all the, all the technology, look what we do with computing. Look how fast we make computers that were sole built to just mine this hash, this, this hash rate, you know, these things that they’re sitting out there just trying to decipher code. And like, we’ve, we’ve like, we’ve progressed so much. And that’s probably the, really the reason I don’t think it’s going to go away because we have progressed so much that I don’t think this is just all in the, something’s going to

[11:13] come out of all this and, uh, there’s going to be real utility that’s, that’s, and that’s going to come out of all this hype that’s happened. And so like, luckily the financial reward has hyped people to kind of get on board and build a network effect, but after the dust settles, there’s going to be, uh, real technology that will change the lives of everybody, how we distribute, distribute, um, you know, possibly funds for the third world to keep, uh, you know, cronies and, and corrupt systems from taking all the dollars that we transfer for, you know, third world countries from first world countries. There’s going to be great things happening out of this. I’m excited to see. And, uh, so I just, again, I hold

[11:49] forever because it’s a, it’s just, uh, it’s a belief system, right? Um, and I’ve already, and it’s already zero in my mind. So it’s kind of a weird way to look at risk now to everyone else who doesn’t want to lose money and, and needs that money for, to turn into food and everything else. Um, you might want to sell it at the right time. You might want to be in and out of it a few times in your life. You may want to, uh, not put too much into it because I wouldn’t suggest anybody put in an amount that they couldn’t part with them. I would, I would think of it as being zero the second you put it in. So just treat it like you would, you know, treat the money you’re putting into Vegas or into a stock market

[12:23] or something else. But yeah, don’t, don’t forgo buying a house because you want to invest in crypto. That might sound like stupid advice, uh, two years ago, because that house, because if you’ve forwent buying a house and invest in crypto, you would have been able to buy 10 of those houses. But, uh, it’s a fundamental thing still that you don’t invest what you don’t have. Um, and that’s, uh, I don’t think it’ll ever change no matter how you pull, uh, crypto. Thanks for taking the time with me today, guys. Thank you for listening to the Prosperity Podcast. To take control of your money and have it work for you, visit us at partnersforprosperity.com. If you liked this episode, make sure you subscribe and leave a

[13:07] review.