The Huntsman Podcast
Truth, Knowledge & Wisdom.
Exploring the world both unknown and known.
The Huntsman Podcast
Huntsmen Podcast Season 1 Episode 8 With guest Phurious Fill to discuss Cryptocurrency
Are cryptocurrencies the key to an independent financial future? Join us as we explore this question with Furious Phil, a mechanical engineer who pivoted to become a cryptocurrency expert, driven by his frustration with US fiscal policies and the Federal Reserve. Phil takes us on a journey from the gold standard to the fiat currency system, shedding light on why trust-based monetary systems might be failing us. We'll cut through the noise and misconceptions, explaining how cryptocurrencies differ from stocks and Ponzi schemes, and highlighting their potential as a revolutionary economic model.
Discover how cryptocurrencies empower individuals to be their own banks, enabling secure and swift global transactions. We address the skepticism often fueled by mainstream media and politicians, considering the 2008 financial crisis and critiques from figures like Elizabeth Warren. Phil also tackles concerns about the environmental impact of mining, pointing to green energy solutions offered by many crypto alternatives. This episode is packed with insights into the efficiency of decentralized transaction validation and the transformative potential of blockchain technology.
Peek into the future where blockchain could offer a people-centric financial system, transparent and independent of government control. We'll discuss the importance of educating oneself before investing, understanding cold storage wallets, and the immutable nature of blockchain ledgers. With examples like Cardano's initiatives in Ethiopia, we highlight the global impact of cryptocurrencies in promoting economic inclusion and reducing corruption. Whether you're a crypto newbie or a seasoned trader, this episode promises essential knowledge and intriguing perspectives on the ever-evolving world of digital currencies.
Thank you for joining the Huntsman Podcast. Today is July 25th 2021. This is episode eight. I'm with Yvonne. My name is Drew. We have a guest, furious Phil, who's going to discuss all things regarding cryptocurrency for us some basic one-on-one kind of things, and Yvonne and I are going to uh share, uh, um, asking Phil these questions. Um, as a proviso, what we're doing, what we're discussing tonight, does not constitute financial advice. I'll probably say this throughout the course of the uh uh show. So if anyone has any questions, that's the reason we're not offering any financial advice. I met Phil through his fiancée, actually a number of years ago, and Phil's a local guy. He lives in the same town that I do and we've met and discussed cryptocurrency at some length. And, phil, you want to go ahead and start off a little bit with about yourself.
Speaker 2:Yeah, sure, I don't want to talk too much about myself. There's more interesting things to talk about tonight, but basically I have a mechanical engineering degree. I specialize in strategic thinking, inventing things of that nature. I invented products for a company locally for about 10 years and now I do the same thing for myself. Overall, I have about 30 patents and random things I've uncovered. I'm dabbling in designing games and board games.
Speaker 2:So, as far as cryptocurrency went, the reason I got into it is I've been following, let's say, us fiscal policy and the Federal Reserve and things like that for a while. It's been extremely frustrating. I came upon crypto, saw what that could mean, saw what it meant, got really excited about it, decided to do all the work and research and, being that I work for myself, I can listen to a lot of news podcasts, stay pretty in on the industry and what's coming out, what's happening. So I think it's high time I start sharing that with people, because there's a lot of misinformation going on from media, congress, people, senators, people that should be looking out for your best interest and absolutely are not, and I think it's high time that changes.
Speaker 3:Well, that's excellent, thank you. Well, thank you for being a guest of ours to really help us have this conversation With you. Know your interest in your background and maybe the type of people that will gravitate towards this type of topic. What's the basic explanation of what cryptocurrency is? What is it?
Speaker 2:That's a lot deeper of a question than I think you realize on the surface. Before we get into that, actually, if you don't mind, I would like to discuss what brought this about, and then that might help people understand where this came from and what it leads to. There's a whole picture to be painted here. Lyn ALDEN, grimmer, md, phd. Sure, mike GREEN, md, phd.
Speaker 2:So I'm not sure if people are aware, but in the United States the dollar used to be backed by gold, so there was an underlying value that every dollar was an IOU for an equivalent amount of gold stored in the United States. You that every dollar was an IOU for an equivalent amount of gold stored in the United States. That's no longer the case. We are now under what's called a fiat currency, that's F-I-A-T, and basically that is a trust-based system. Our money is not backed by anything, except for the fact that if I hand you a dollar bill, you for some reason believe that it's actually worth something when I give it to you. That's literally what we're running on right now, and if you look at the current economic policy and everything like that, you can see that it's not working out so well. People can just print dollars into oblivion. People with equity are getting richer and richer and richer and richer. People holding their currency are getting poorer and poorer and poorer. As time goes on, the dollar is inflating at insane rates and literally it's just making the wage gap bigger, and most people don't actually realize how that whole system works.
Speaker 2:In fact, the Federal Reserve, which prints our money, isn't even a government institution. It's a private institution, and the IRS actually works for them, not for our government. So when you're paying taxes, no-transcript, and the IRS is giving that money to a private banking corporation called the Federal Reserve, which is extremely misleading. But yeah, so the government doesn't print money. The government takes a loan from a private bank to print money at interest and then redistribute it to everybody else. So literally every dollar that you're getting is making money for a private bank. That I don't think most people understand what's going on. So let's get into crypto now and why that came about. So essentially, what crypto is is you have to imagine it as almost betting on an economy, for example.
Speaker 1:Sorry, we froze for a second. What Drew?
Speaker 2:No, we froze for a second disappeared off the page.
Speaker 1:Go ahead, Sorry, Phil. Oh I did no, no, no, no. We all did.
Speaker 2:Okay, sorry If you know where. Okay, anyway. So when most people think of cryptocurrency, they think of something like a stock, something buying equity in a company I want some Microsoft, I want some anything and then, as that company makes more and more and more money, your stock value goes up and you can sell it. That is not what cryptocurrency is. That is a high misconception. Another thing that it's not is a Ponzi scheme. Now, there are some that aren't very good. You need to definitely do your research. Like with anything, there's good faith actors and bad faith actors. But what is a Ponzi scheme is the US dollar, because that just goes down in value. At least crypto sometimes goes up.
Speaker 2:So, in layman's terms, cryptocurrency would be like, let's say, at the creation of the United States, you have the founding fathers all sitting there and they're like how do we create this country? What do we want it to run on? What's the basis of how we want to do business? Well, we want free market principles. We want these laws to keep everyone in check. We want everyone to be able to run within this particular framework to make whatever the heck they want. That would be the essence of cryptocurrency. It would be almost like what the US dollar should be, which is the ability to trade for goods or services within a marketplace. So you have to think of each of these cryptocurrencies as a specific marketplace with a specific purpose that the currency is allowing you to play in, and the better you think the marketplace is, the more useful you think it is, the more valuable that currency could be in the future. Now, because there's so many different marketplaces to create, you can get all kinds of different cryptocurrencies, from stuff that's more of like a store of value to stuff that's more like a money transfer, getting money from one country to another country extremely quickly, extremely cheaply. I'll go into all that. There are cryptocurrencies that are basically base codes that other people can build their own cryptocurrency economies on top of, but then use that base code to run the infrastructure, as it were, because they don't want to do that. They just want to focus on their own tiny little economy section. So the industry as itself is growing tremendously.
Speaker 2:People have probably heard of something called DeFi, which stands for decentralized finance, and in layman's terms, what that's doing is it's taking power away from essential power and redistributing it to anyone. It depends on the cryptocurrency. So none of this is. Everything is this way, but I'm trying to be general here. Anyone that wants to be a validator or like a miner on a network can lend their computer processing power to that network and, using algorithms, they can use those computers, use that processing power to power the transactions that make the economies work, and people get paid for that in different ways depending on what the cryptocurrency is.
Speaker 2:So it's really really really neat that we can enter a trustless system where, instead of having to go to a bank or someone who's been given an authority over you, a lot of these cryptocurrencies work in a way that you say well, how do you trust what's coming from these random people? Well, whenever they're validating a transaction, say you have 100 people. Well, the correct information is going to be far more common amongst those strangers because they don't know who each other are. So if the correct answer is two, well, you might have 70 people send back an answer of two. You might have one guy over here trying to disrupt the system and he might say five. A guy over here might say seven. A guy over here might have one guy over here trying to disrupt the system and he might say five. A guy over here might say seven, a guy over here might say one and a guy over here might say 12.
Speaker 2:But whenever you look at what the most answers are that you're getting, that's pretty much always going to be the correct answer, because the correct answer is the one that everyone can actually mathematically calculate or arrive at the correct answer for.
Speaker 2:All the other ones are just kind of random guesses and unless there's some way for them to all communicate with each other and all scheme together which is very, very, very rare, and cryptocurrencies come a long way in preventing that from happening it's an extremely safe and effective way to do things which allows people to act as their own banks to loan out money, to loan out the value of the cryptocurrency to other people without anyone else having to be involved, and the money is completely safe, no matter where it's going. It's possible now to transfer millions of dollars from someone in the United States to someone all the way across the world in two seconds, for fractions of a penny, whereas you know you try to do that now and kind of wire transfers and days and loads of money and lots of time and energy. So it's really, really fascinating. I hope that gives you a general sense of kind of the exciting future, of where all this can go.
Speaker 3:Yeah, absolutely. I never really thought about cryptocurrency actually in those terms Still very mysterious to me. So this was a great explanation, drew, you may have been more kind of in tune with it than I, but this is very insightful in tune with it than I, but this is very insightful, thank you.
Speaker 2:Like Drew said, this is going to be, hopefully, a kind of 101. So I don't know how deep you want me to get into this. I could get pretty deep if you wanted me to. One thing I would like to say, that's just from the outset, is if you were going to start doing your own research into cryptocurrency which I highly recommend you do anything, I say go, look it up for yourself, confirm it. You should never take anyone's word for anything on this stuff Because, like I said, there are always bad faith actors trying to get you to do stupid things, but I would argue the worst bad faith actors are actually the mainstream media and politicians.
Speaker 2:They're terrible, terrible people and just to give you a glimpse of what I'm talking about here, when the 2008 market crash happened and the housing crisis, there were people that knew bankers, politicians, journalists. There were people that knew, in my opinion, that's exactly what was going to happen. They didn't tell you, they didn't tell me, they didn't tell anybody Heck. Those people didn't even go to prison. They do not look out for your interests and the only reason they're telling you not to invest in cryptocurrency now is because they don't want to take the risks, because they already have the power and, honestly, most of them don't even understand what the heck all this is anyway, because it's kind of technical. What's a blockchain? What's the difference between Bitcoin, ethereum, xrp, cardano, different projects? They have no idea and until their masters tell them what to say, they don't want to know. And they probably don't even want to know then. So it's really really disingenuous what's happening?
Speaker 2:Quick example Elizabeth Warren. She just released a statement, I believe that I heard about, where she called cryptocurrency a societal pestilence or something very close to that, which is absolutely insane. She talks about Bitcoin as if it represents all of cryptocurrency and talks about the energy requirements of Bitcoin, which is true. Bitcoin has a competitive energy problem, for sure, but there are cryptocurrencies out there that use less than 1% of the energy that Bitcoin uses. That's actually green energy that could help save the planet, save people, money, bring finance to third world countries and all kinds of people and get around corrupt governments and everything. But she'll talk about cryptocurrency as if it's all Bitcoin and say it uses too much energy, it's fraud, it's this, it's that.
Speaker 2:She knows full well, it's not, and the only reason she says that stuff is because she wants to maintain power, because blockchains cannot be manipulated. They're depending on the network, but let's talk about 95% of them. Most of them cannot be manipulated. They don't need governments to work. They're completely people centric and if all of these things end up happening, which it's going to, there's almost no way to stop it.
Speaker 2:The US dollar is the current world like. It's the global reserve fiat currency. Everyone in the world wants out from underneath our thieving butts and really isn't supportive of this. The only country that's not is really the United States of America, as we have the most to lose and she knows the moment this goes in and people don't need the government anymore, she can't just start stealing money and funneling it to whatever district they want, and all this stuff can be tracked and all of their power and corruption are just going to go crazy. I mean, this is literally the greatest good for humanity since a very, very, very, very, very long time. But when people are telling you to be scared, you shouldn't be scared. This is exciting and amazing. You should definitely be cautious. You should definitely do good projects and understand that you're your own bank at this point and understand how to secure yourself, how to get a cold storage wallet, how everything works. Go to YouTube, find out what you're doing before you start to invest. But scared Social pestilence? No, no, far from it. It's the exact opposite.
Speaker 1:They just don't want you in until they've already made a million dollars. Yeah, I feel it's almost like she's trying to make Senator Warren is trying to make it sound like cryptocurrency is the next new boogeyman.
Speaker 2:Yeah, because it's a complete power trap.
Speaker 1:Would you please mind explaining, you know, because in our previous conversations and I don't support any sort of I'm not sponsored by any crypto wallet or anything like that. I mean, I'm just a guy who just tried to. I've got a crypto wallet, I bought $100 worth a couple of things and just sitting there watching it to see what it will do, and I'm not advocating that anyone dump their 401ks or their retirements or their pensions. They jump into this without any. Like Phil said, you've got to do your own homework. You have to have a basic understanding that what it is. It's a line of code and a ledger. Would you mind elaborating on that, phil, for me?
Speaker 2:Yeah, no problem. Again, all cryptocurrency different. But yeah, I guess this is getting back to your earlier question. What is it exactly? Imagine an open source code with rules, almost like a constitution being released online of a specific cryptocurrency. You want to create this particular economy, you make it, you release the token online and then people are able to buy it. Again, we're talking general sense here. Anyone can go in there, they can see the rules, they can see how it operates, they can see what the inflation rates are, how the miners or validators get paid, who they are, all of that. So that's fantastic. And so when you're investing in cryptocurrency, that's fantastic.
Speaker 2:And so when you're investing in cryptocurrency, something might have, say, 100,000 tokens to it.
Speaker 2:That's a random number, most, or far more than that.
Speaker 2:But if you buy a tokenized asset of something you own part I don't want to say you own part of the code, but you have a wallet address that anyone can track, that anyone can see what's in there.
Speaker 2:They don't know it's yours, but the whole process is completely transparent. So it's like a picture of all these addresses and all these wallets and how much of each cryptocurrency they have in them, and anyone can see what that is, and so, when you buy, that cryptocurrency will go from someone who sold into this different wallet address that anyone can see that money went from here to here, and, again, your name isn't really linked to this address. The only reason this address is yours is because you have the keys to open it. It's like your vault, but if someone stole the keys to your vault, then they could get it. But the point is, though, is you are owning a portion of that open source coin. Let's say You're owning part of a ledger that cannot be manipulated, like no one has the full power access to go in and just wipe your funds away, like all these validators and stuff.
Speaker 1:And the ledger does get full. I mean, this is not a. You know these things. You know tokens are. There is no perpetual production of them. There's a finite amount per ledger.
Speaker 2:It depends on the cryptocurrency. But yeah, for example, Bitcoin will eventually run out. You will run out of Bitcoin on a certain schedule that has been released, that everyone knows about, completely transparent, and eventually all the Bitcoin in the world that can be created will be mined and no more Bitcoin can be created. There are cryptocurrencies that run on a voting mechanism where people could eventually vote to. Again, it depends on the cryptocurrency. That's why you have to know what you're talking about before you invest in it, because there's 12,000 cryptocurrencies and I can't speak to every single one. They're all different, but in the general case, you usually have a set finite amount and as you buy some of that amount, it's yours and it doesn't really go away. And yeah, like right now, because crypto is so new and no one knows what they're doing with it and half the people don't even know what it is.
Speaker 2:People get scared in the market really easily, which is why you see these huge fluctuations. You also have a lot of people leverage trading, which can cause a lot of that, so you might get in when it's high. You should try not to do that, but sometimes you do and then it goes down 50% and people freak out oh, my thing's worthless. It's no, no, no. You have to understand. 1% of the use case of these tokens is currently being done. The amount of good that these can do the market for these economies is going to be, in my opinion, absolutely insane. We haven't even scratched the surface yet. All the price volatility of what you're seeing now is virtually worthless if you're in the right coins. You just have to be mentally tough enough to know what you have, know where it's going, and not be manipulated by fear or excitement either direction, and keep your brain on you and make good decisions. I will say.
Speaker 2:What's funny, though, is people really like the US dollar. I have no idea why the US dollar only ever goes down. At least crypto goes up sometimes.
Speaker 3:So with this, you said at some point, bitcoin and I may be interpreting this, some of this incorrectly so you said, like, at some point, bitcoin will no longer be mined, right, like there was kind of an end point to that. If that's okay, and then. So what does that mean for the people that have invested in Bitcoin? What happens then? What does that mean?
Speaker 2:There's a couple of different schools of thought on that and no one knows for sure but most of your libertarians and Bitcoin people. What happens then? What does that mean? There's a couple different schools of thought on that and no one knows for sure, but most of your libertarians and Bitcoin people would argue that that's going to make it even more profitable because it's going to be even rarer now and you can't get any more. It would be like what if you ran out of gold on the planet and now the price of gold skyrockets because you can't mine anymore, you can't find anymore, it's all owned, and that should possibly shoot the price to the roof.
Speaker 2:Now my personal opinion. I'm not big on Bitcoin. I don't. Extraordinarily. Like I am partially libertarian, I like some of what it stands for, decentralized and everything. Like I am partially libertarian, I like some of what it stands for, decentralized and everything.
Speaker 2:Excuse me, but overall I find it to be slow. It uses too much energy. I feel like they could fix some of the problems, but they really aren't. I think there are better projects out there, but then again, I'm not rooting against it necessarily. I hope it does well. I don't wish bad on anybody. So in answer to your question. I do not wish bad on anybody.
Speaker 2:In answer to your question, it could go up. If, by that time, that should not be for a while. Still, if, by that time, bitcoin has become some standard that everyone is running on, most likely you would have enough validators interested or miners interested in keeping the network running that they would actually keep it running so the value of their Bitcoin doesn't drop, because if the Bitcoin network all of a sudden stops running well, your Bitcoin is worthless. I do tend to think by that point, not financial advice, it's just my opinion. Look it up that there are better utility tokens out there that do far better. Their metrics are way, way, way better for different use cases.
Speaker 2:And honestly, I think Bitcoin was first. Think about it as if it's like the iPhone, original iPhone 1. Awesome first time, great for what it did, but now we're at a time in which iPhone 1 is irrelevant. I just think Bitcoin is the one everyone's heard of. Once it gets flipped they call it the flippening, which means when the market cap for a different coin gets higher than Bitcoin. That people will be like why do I have this thing that doesn't really do anything when I can own things that actually do things. So I think at that point you'll see Bitcoin start to die out. Could be wrong, but that's my opinion.
Speaker 1:That's why I'm not really, and it's not a tradable. I mean it's not a tradable stock, it's a currency.
Speaker 2:Yes, it's a currency. It's like I said.
Speaker 1:Which will dovetail into my next question about. You know there's a current SEC lawsuit, Security Exchange Commission. On December 23rd last year, as the director was walking out the door, he filed a lawsuit against a company called Ripple and part of Ripple has a their um uh cryptocurrency is called uh xrp and they filed a lawsuit against them claiming that it's not a currency, that it's a tradable stock and it's not. Would you care to kind of not so much go through the lawsuit but other? I mean there, that was pretty shady for them. The guy I can I can't think of what the what was the name of the SEC dude that filed it on the way out? You remember I believe that was Jay Clayton. Yeah, I mean, he's walking out the door. Yeah, file it.
Speaker 2:You know, and it's Jay Clayton and then another guy being deposed called William Hinman has some seemingly corrupt and shady dealings around Ethereum and saying things about Ethereum not being a tradable security, despite the fact that it appears that Ethereum had an initial coin offering, which seems to be the bar they like to set for something of being a tradable security or not, rather than a currency. So the fact that he got seemingly millions of dollars from a company associated with the Ethereum Foundation seems to me to at least be Skullduggery.
Speaker 1:Yeah, and Ethereum is another form of cryptocurrency. The guy left the SEC shows up on the doorstep at Ethereum and they, you know, they hand him, you know something with a bunch of money in it.
Speaker 2:Yeah, basically it was a company that, from my understanding, it was a company he worked for before he got into the SEC. Then he made these comments while he was at the SEC and then, upon leaving the SEC, he got rehired by this company and then got a gigantic payout. The SEC, he got rehired by this company and then got a gigantic payout. So make your own assumptions.
Speaker 1:Well, and this is not going to be the first time we're going to have Phil on, we're going to have Phil on subsequent podcasts.
Speaker 3:Well, I still have some basic questions. By all means ask away.
Speaker 2:Yeah, yeah, let's do that before we get into the lawsuit, by all means ask away. Yeah yeah, let's do that before we get into the lawsuit.
Speaker 3:Yeah, I feel like this still needs to be pulled down a little bit for me. So again, I know this is very basic, so does all cryptocurrency have to be mined? And I'm not quite sure that I understand and I've heard this before about the energy concern. I don't really grasp what's behind that. You know the energy.
Speaker 2:Which one would you like me to answer first?
Speaker 3:Whichever one you want to go for.
Speaker 2:Yeah, let's talk about energy first, since that is mine. So this is going to get kind of complicated. So bear with me, I'm going to try to dumb this down. Not dumb, but make this simple as best I can. This won't be extraordinarily accurate because, again, it's more complicated than this, but you know, work with me. All right, so you take a picture with a digital camera 10 megapixel camera, take a snapshot of something, right? That picture is a digital representation of colors and pixels, all held within an extremely long algorithm that tells the computer how to recreate that image as a picture whenever you download it. Yes, that makes sense.
Speaker 3:Yes, yep, I'm with you.
Speaker 2:Cool, great. So how does this work? Bitcoin works on something called proof of work, and what that does is it basically pits every miner on the Bitcoin network against each other to try to get as much processing power as possible. Except, it creates a system of competition. So only the people that get the correct answer, as it were, or the first people to come up with the correct algorithm to validate the transaction, get paid in Bitcoin, in Bitcoin. So the best way to mine Bitcoin is to have as many computers as possible outputting as many transactions as possible in a brute force attempt to literally recreate what it wants you to recreate. So I brought up the picture thing and you're saying how is that anything? Well, imagine if that picture is the Bitcoin ledger, the Bitcoin block that you want to validate, and it takes a snapshot of that and basically says OK, here's what happened in this block, here's what the out, and it generates an algorithm based on what happened and then spits out a final, really, really, really long equation. If it were, your job as a Bitcoin miner is to have your computer literally make up as many possible iterations of that snapshot and generate as many of those equations as humanly possible until it finds the one image that generates the algorithmic equation that matches the Bitcoin block that was created. And if that's you, you get Bitcoin. That's why you get Bitcoin.
Speaker 2:Mining operations have you heard of that? Whole warehouses that just have computers running and running and running and running and running and running. We're talking about quadrillions of transactions. A second, not an hour, not a minute. A second. Amounts of processing power here, because everyone wants to be the first to the door and the more transactions you run like, the more computational power you have, the better odds you have of that being you. It's not a perfect representation, but it's close. Does that make sense?
Speaker 3:Yes, yes, it does.
Speaker 2:No.
Speaker 1:Yes, no, yep.
Speaker 2:Okay and you are going to get paid in Bitcoin. And the thing on Bitcoin and I'm just going to mention this really quick is they have something called a halving schedule, like one half, and what ends up happening is, as more and more and more Bitcoin gets mined, your reward for validating the transaction gets cut in half. So once it reaches certain points, you get less and less and less and less money for doing the same amount of work in Bitcoin, which theoretically and seemingly in reality drives up the Bitcoin price. Because if you're getting one Bitcoin for validating a transaction and it's worth $10, all of a sudden, when that gets cut in half and you're doing the same work and only getting half a Bitcoin, well the value of that Bitcoin needs to rise to $20 to keep people happy doing the same amount of work for the Bitcoin, which drives up the price, supply and demand simple kind of economic structure there and with all that processing power going around and all these transactions and all these computers drawing needing power, that's where the green thing comes in.
Speaker 2:You know the green part of it comes into place because of the fact that it's probably a coal-fired plant that's supplying that power. It is and, to be honest, like they talk about. You know, let's get more green energy in the Bitcoin network. That's great, that's all well and great, but let's be honest, I don't care how much green energy you have. You can always put that energy somewhere else, even if you're not increasing your carbon footprint.
Speaker 2:Why are you running a network that uses 100 times possibly more than that whenever things get really crazy, possibly more than that whenever things get really crazy the amount of energy that you need to actually do the things that it does, faster, more efficiently and cheaper? Why? Because people like the idea of circumventing the government and the banks which I do too, but I think there's a better way to do that or possibly even create a network where some things are working with governments and banks, because I don't think you're ever going to get rid of those. As a mature person that lives in reality, I think there's always those kind of people that exist, and then you'll have other side projects that try to remain decentralized and people-based. I think you're going to have a little bit of both. So hopefully that explains what mining is? What was your other question?
Speaker 3:explains what mining is. What was your other question? Is all cryptocurrency mined In which it?
Speaker 2:sounds like okay, no, no, no, no, no, no, not at all. That's. One of the biggest things in cryptocurrency is how do you validate transactions? And again, I'm trying to keep this on a base level understanding, and this is all per my understanding. So do your own research. I'm just here to try to get you started. So, bitcoin we just went over that. There's something called proof of stake, which is not proof of work, obviously, and it's a step up, and what that basically runs on is the idea that the more you own something, the more valuable it is to you to keep that thing running. So, instead of, for example, with Bitcoin, everyone being kind of the same, no matter how much you own which is a cool concept in general, like they all have the same power. As long as they're processing the power and running the transactions, they can get rewarded. In a proof of stake system, though, if you own 90% of a network, the odds of you being a bad faith actor to destroy the very network that you own the currency in are extremely low. You follow what I'm saying there? Okay, so in that case they give. Let's just say, okay, so in that case they give, let's work together, kind of thing to make our system more efficient and cheap to run and let's get more people on it, and the more people we can get involved, the more people are going to use it, the faster it's going to be all those great things, and so it's more of a cooperative network, which decreases the amount of processing power needing to shoot things back and forth. That's been a big breakthrough. In blockchain technology.
Speaker 2:You also have ones like XRP, and XRP runs a little bit differently. Even it used to be mostly bought up by a company called Ripple. They basically dropped a coin I believe it was called OpenCoin at the time. They bought a ton of it for very, very, very cheap because they knew what it could do. Ripple didn't actually exist at the time and then, around the fact that they bought all of this coin, they created a company that would be able to utilize this coin that they had to make a really good business run, which is genius.
Speaker 2:What they end up doing is people that partner with them, people that will use the XRP ledger to validate transactions and create a global, worldwide network that can create a really good economy for people to work on with this cryptocurrency. They will give I won't say give, but sometimes they'll gift XRP, or sometimes part of a deal will be letting a company have a certain amount of XRP and giving them validation rights to be validators on the network, kind of like in a proof of stake thing. Except it's not mined at all. The value gained from running the XRP ledger is so immense it's so fast and so cheap that they are all just going to cooperate to keep it going, because the loss from letting the network be bad and have bad-faith actors on it is catastrophic from a monetary standpoint. So they have no reason to do that whatsoever. Everyone involved in the network has more to gain by being good than by being bad. So those are some general ways in which cryptocurrencies can be ran, let's say.
Speaker 2:I will say another thing is like with Bitcoin there's only a certain number of Bitcoin. With some other ones they have inflation schedules which can sometimes like, say, I think Algorand runs somewhere at 6%. That's a cryptocurrency that you can build other stuff on, and some of that goes to marketing. Some of that goes to paying the people that use the processing power to make the network go. Some of that's used to fund side projects to actually get more people building stuff on the networks. The more use cases you have, the more people involved, the better. Your economy is Great. It's really neat to see all the different projects and how they're coming up with creative ways to try to create fast, efficient cryptocurrency ecosystems, and they're all built with a specific purpose in mind to try to make what they're doing as efficient and productive as possible.
Speaker 1:I was thinking about this as you were talking about the quadrillions of brute force processing power, to go to see who can get there first, basically to get their payment for the miners to be paid. I remember back in the late 90s I used to process share with SETI, the Search for Extraterrestrial Intelligence. It was out of Halal 2, I think I think UC Berkeley is what it was and they created a, a screen saving program, and what you did was you would log in and download their screen saving program and they would send you bits of the equation they were working on and they did this. You know it's a lot better to have. It was a lot easier, more economical, I would suppose.
Speaker 1:I don't have those numbers in front of me, so I may be guessing on this, but instead of having one massive gondo, you know, room-sized computer trying to crunch all this stuff, to have 10 000 home pcs chewing on a little bit at a time and then that way they'd be able to get the uh, you know the answer. In fact, you know the um 90 some percent of the human genome, was mapped the same way and a lot of people don't realize that, and I think there'll be a time will come when the cryptocurrency market will look back on this and say this may be a more efficient way to get it done. But the problem is you're dealing with an issue of who gets there the fastest, so it would not work well. You're dealing with an issue of who gets there the fastest, so it would not work well. Who wants to?
Speaker 2:get on first, basically Right. It's basically the difference between a consensus mechanism and a competition mechanism. You've probably heard of Ethereum before, and Ethereum's great because what they tried to do is they use something called gas, and so every transaction that you put through, you can take a portion of what you're trying to put through and you basically pay the validators yourself to basically say hey, look at my transaction, I'll pay you this much for putting it through. Please do so, which sounds great if the network isn't overloaded.
Speaker 2:But the problem comes in if you are trying, if there's a ton of people using it, and you're all of a sudden trying to send $20 from yourself to Drew, let's say, and I am trying to send $2 million from myself to some guy over there. I can afford to pay $1,000 in gas to make that go through almost immediately. You are trying to send $20 over there. They're just going to ignore you. So either your stuff isn't going to go through or you're going to have to end up paying $100 to get someone to notice that you're trying to send $20 over there, which is a really big problem right now, and it's something they're trying to address with Ethereum 2.0, which is something they're working on. The only issue for that is there are other projects out there that can kind of already do what they're trying to do. So you know Ethereum's really popular. It's been around for a while, but there are other projects that are kind of ahead of them in the game, in my opinion.
Speaker 1:You know, and Yvonne, the crypto wallet that I currently use offers a debit card that you can go and use a debit card to pay for goods and services with your cryptocurrency. There's a conversion process through it and you know. So it's not like it's. You know all these geeky guys and you know it's like they're. They've got my, their line of code and that's it. No, I mean they've gone and I, I mean I strongly encourage people if they want to kind of play around with it a little bit, it's just go ahead and you know, look at any crypto wallet and invest a hundred bucks in, you know, whatever cryptocurrency they want to and kind of see what happens with it. You know, but then again, we're not here. Here's our midpoint. What we're discussing does not constitute financial advice.
Speaker 2:So, yes, yeah, this is instructional. We're trying to teach you guys how to get started, what this is, that you shouldn't be afraid of it. You should definitely check it out, go, understand it, because this is the future and there's no denying it. So try to run, but it'll be here, whether you like it or not, so might as well get in on it. While the getting is good, there's only about 1% of the human population actually is in on it right now. There's a lot of potential left.
Speaker 3:What's the risk?
Speaker 2:All right, that's a great question. There are a ton of risks, and so it depends on what, and I guess I'll just go over a few of them just to give people an idea of what to expect. You should A always, always, always, do your own research. Don't trust anyone. People are shilling coins trying to your own research. Don't trust anyone. People are shilling coins trying to get you to go after what they like at news media. So, like I said, most of this is open source. A lot of these creators are really good about sending out videos about what they're doing. They have really good communities around them.
Speaker 2:But always understand the people talking to you usually have some sort of bias, and you should try to find a source, just like with anything that gives you a good opinion, a bad opinion, and figure out where the truth is. So there's a risk in that, in just what information you're getting. There's the big risk in the fact that you are your own bank here, like I said, nothing is linked to your name at all. It risk in the fact that you are your own bank here, like I said, nothing is linked to your name at all. It's all in addresses that you have the passwords and keys to that. People will try to phish you for, scam you for get you to give up your secret wallet passwords. As long as you understand the basic rules of what to do and what not to do, it's not that hard. It really is, and it's quite simple. I'd say almost anyone can do it. However, there is a bit of a learning curve, so you should definitely go look at YouTube instructional videos on how that works, how to do it, spend the time, really understand it and then, after you do, transferring money is easy, using all these things is easy and you won't really have to worry about it, but make sure your computer is free of viruses.
Speaker 2:I would download some kind of key stroke encryptor kind of thing. There are free programs that do that. And just be careful with what you're doing online. Like I said, you are your own bank and if you want to set up two-factor authentications on your phone, so you put your password in over here on this website and then before you can get in on the website, you have to have your phone. So you put your password in over here on this website and then before you can get in on the website, you have to have your phone and then they give you a second password and you plug that in with a randomly generated number every 60 seconds. That is great. It helps keep people out of your funds. So people have to understand that they need to take security for this very, very, very seriously. Another thing is obviously there are governments that don't really like this stuff. You know social pestilence and whatnot.
Speaker 1:Social pestilence yeah.
Speaker 2:It's like Elizabeth Warren, you know saying that kind of shit's really funny yeah you know there's the people that can control the markets want to continue to control them. You know there may or may not be certain politicians that their husbands may or may have not found out that the government was going to purchase a bunch of Teslas and then may or may not have allegedly told their husband, you know, to invest in said company and walk away with tons of money and then not get investigated. But no, I'm, I'm.
Speaker 1:Okay, real quick. Yvonne, did you have a follow-up to that, or?
Speaker 3:No.
Speaker 1:Okay, she says what's on her mind. She says what's on her mind. Yeah, and don't let that charm fool you.
Speaker 2:She's a really very smart lady, anyway, other risks, though the last risk, I will say, is the government. The last risk is like I would say before, when crypto was just a few billions of dollars. Now we're sitting at like $1.2 trillion trillion. The odds of this just vanishing into nothing is very, very, very low, especially since other countries are now creating sandboxes that actually that's a term for basically like playgrounds for people to experiment with cryptocurrencies and don't really have to follow the laws for a few years so they can actually try to build things In this really exciting technology.
Speaker 2:People see it as a way of getting re-controlled their own finances, maybe even having some world global reserve currency that everything is based in. You might have your own government coins for your own separate governments, but they'll all still be based in a fully traceable, transparent cryptocurrency that holds everyone accountable and doesn't just let you move money around willy-nilly and do what you want to it, which is not appetizing to certain politicians who definitely want to try to get in the way of that until they have proper controls over it. So be careful what exchanges you use. Stay with the mainstream ones. If you can research a cold storage wallet like a Tether or a Ledger, that allows you to get your cryptocurrency off the exchanges online, then, even if the government goes after the exchanges online, your stuff isn't online, it's offline in a cold storage, encrypted USB wallet that is yours, and if you left the country or waited until there was better policy in place, you would be able to still maintain control of your cryptocurrencies.
Speaker 1:Those things are extremely and access that wherever you had you know the ability to, you know to use a, you know a laptop or whatever computer and internet connectivity and then you're in. So Right. So there are ways to mitigate these risks. I mean, it's not a bad thing. It's almost the same thing as burying money in the backyard in glass jars.
Speaker 2:Yeah, pretty much you know, because not saying you can't trust people, but I think we're learning that you can't trust people, exactly.
Speaker 1:Briefly, a lot of people poo-poo cryptocurrency because Elon Musk got in and then got out in one day, and how Bitcoin took a dive and Elon Musk has been hoisted as this great guy, janik smart dude and he was in, didn't like and left, and and I I think there's some backstory to that. That kind of needs to kind of come to light so people can have a better understanding of why he did what he did, or or okay, so I did this, didn't like and got out, you know well, that's actually.
Speaker 2:I will say that's not actually how that happened. Even though I'm not a bitcoin guy, I am crypto, so I know kind of what happened. But he ended up getting into Bitcoin and, like with anything, did not tell anyone he was going to get into Bitcoin, like news media and people like that do, they don't want it going up before they buy it. He bought a lot of it I believe it was in the billions of dollars and he announced that he would allow Bitcoin to be used to buy Tesla vehicles. I believe that was from Bitcoin to somewhere in the range of $40,000-ish per Bitcoin. So he basically did that. And then he started to find out more about it and realized there were huge energy implications and things like that and kind of said okay, wait a second, I'm not comfortable with how this works. I'm no longer accepting Bitcoin for the Teslas anymore Until they can figure out how to better use the energy or fix the competition system, which they haven't done. What they have done is come out with things like Bitcoin pizza and other really stupid projects, but whatever. Anyway. So he didn't really sell it. He just kind of backtracked on his promise to let people use Bitcoin to buy a Tesla.
Speaker 2:Now, he did end up doing what he called a test of I think it was liquidity, is what he called it when Bitcoin was in the $50,000 range and he sold some of it, but it was like 100 million or something. It wasn't a huge amount compared to how much he actually had and, from what I understand, I don't think he sold any more cents. But, like I said, most people in cryptocurrency they see it going up, then they see people starting to talk about it, their friends or whatever it's like. I made some money, yay. And they get in without understanding what any of this is, what any of these projects do. And therefore, when one billionaire that does some cool things you know admittedly I like the, but you know, when they say one thing, it's like, oh my gosh, I have to get in. Or he says one bad thing, oh my gosh, and now it's crashing 30% because people don't know what they have.
Speaker 1:They don't know what they have. They don't know what it does. The sky is falling and I got to get out.
Speaker 2:Limbing is jumping off a cliff man. That's this market in general. You have to think about things in a long-term sense. Not let the whims of people that have no idea what's going on here affect your long-term prospects of because eventually this is going to turn a corner and it's going to be everywhere.
Speaker 1:Hopefully soon.
Speaker 2:Yeah, I mean we talked about the Ripple lawsuit and that's really, if you can, if you could just hold on to that for just a second.
Speaker 1:Yvonne, did you have anything else that you wanted to ask Phil?
Speaker 3:Yeah, no, I mean, that was good If you could just hold on to that for just a second. Yvonne, did you have anything else that you wanted to ask Phil?
Speaker 1:Yeah, no, I mean, that was good. Thank you, phil. Could you use the? Are you sure, Because?
Speaker 2:like you keep. I feel like I'm either doing a really good job or I'm not explaining things very well, because you just keep saying no and not having any follow-up questions for me.
Speaker 3:No, no, it's good, no no it's good it's a lot of information, okay, and so it definitely answers my questions, especially, like I said, just even on the energy side of it. You hear people say that, but it's like what exactly does that mean? So you provided an excellent answer regarding that.
Speaker 2:Thank you, glad it made sense.
Speaker 1:If you could, when we first talked the first time that we met, would you mind briefly illustrating the Ethiopian example of the benefits of cryptocurrency and what it could do for that country?
Speaker 2:That is yeah, absolutely. That is great. Yeah, absolutely, and you can look it up. There's research, you can Google the story, it's everywhere. But there is a cryptocurrency called Cardano, which was actually created by Charles Hawkinson I believe that I pronounced that right, or really close. He was one of the original guys in the Ethereum project, but he figured that it wouldn't be able to scale properly and he brought up issues with it that he didn't like, and they ignored him, and so he left to create his own thing.
Speaker 2:He created this thing called Cardano, which he wants to be a giant worldwide humanitarian project, on top of being a really good platform for anyone to build on and use. But he's basically going to third world countries, and Ethiopia is one of these third world countries that is going to be able to validate or run computers on this network, where they're teaching their school kids how to code on the Cardano network to create their own virtual economies for the future. So, instead of having to rely on natural resources in that country to try to bring themselves out of it, they're literally going to be able to code their way into becoming a prominent country and have access to full financial markets all throughout the world, because, through the Cardano network. Anyone in the Cardano network, whether it be US, haiti, somewhere in Great Britain, france, doesn't matter, russia, what have you they're all connected on that same network. Therefore, they are also connected on that same network. Then they'll be able to build mini coins that do specific little things that can either transfer to just their own little economies or can do worldwide things that allow them to track things or get funding from other countries to do things within their country.
Speaker 2:It's going to completely change people's lives in a way that no charity, no project, no anything, ever, ever has or has had the potential to be able to do. And on top of this, since these blockchains are so transparent, no one can steal these people's money. No one can throw them under the bus and underpay them or be a bank and abuse them and give them less than what they should, because every transaction that goes through on this network is completely trustless, and if someone says they're getting something, then by gosh they're getting it and they can prove it. And once you hit enter, once you enter into a contract on a blockchain, there's no way out. It happens. So it's really, really, really fantastic. This could be the best, like I said before the best technological advancement in the history of humanity, for if it's done right on an ethical level, it's really fascinating if it's yeah and if it's done right, I mean it could.
Speaker 1:It could really pull people out of the third world. It really absolutely, absolutely. Instead of fascinating, you know, then you're not going to have any somalias, you're not going to have any. You know mogadishus and, and yemen, and you know uh, ruled by uh, you know uh, warlords and and just the horrible things that people do to each other.
Speaker 2:I, which is we're not going to touch on now, but I am going to put a teaser on all the companies that are not happy about that and I don't want to go into they'll have to pivot and rethink their strategy is what they're going to have Right.
Speaker 2:Well, and everyone can track what they're doing now too, which is great. But well, once this gets implemented, assuming it's implemented correctly. But you know, you even talk about now there's been wars that have been started, allegedly for countries that they don't talk about, that just didn't want to join the World Bank, that didn't want to accept World Trade Organization trade policies, and the next thing you know, they're being bombed for. Yeah, that's a whole other video, but know hopefully yeah, exactly this puts a stop to all that.
Speaker 1:That would be great well, um, we're gonna go ahead and stop right now, right, right, at about 56 minutes or so. Um, I would like to put a teaser out there, and the next time that we have you on is to discuss the uh sec lawsuit against ripple and xrp. Don't say word right now, because this is something that we're going to do down the road.
Speaker 1:We're not going to talk about it right now, and when we do talk about it, we're not going to get into the nuances and everything, but it'll be a really interesting thing, I think.
Speaker 2:Absolutely. Hitting the news, but before then can I tell people that they should research it, If you're interested at all if you want to research one thing.
Speaker 2:Look into XRP and the SEC lawsuit from all angles. I'm not telling you to go to people that tell you one way or the other. There is a really good YouTube station I'll give a shout out called Legal Briefs. That could probably bring you up to speed from the beginning on how this has evolved. We will go into that more next time, but definitely looking. I would start with that cryptocurrency if you are interested in starting anywhere.
Speaker 3:Well, this has been fantastic, I have to say. This is such a fascinating topic and just your wealth of knowledge, just even being able to explain it to someone like me, but still keep Drew very interested. I mean kudos to you. So I meant that in a good way, because you're you got a wallet Right, so you're yeah, you got a wallet right, so you're already doing this and, finally, what I'll say to our subscribers and audiences what we're discussing does not constitute financial advice.
Speaker 1:And, with that said, please remember to like, share and subscribe. Hit the bell icon to be notified when a new podcast is coming out. And our email address is huntsmanpodcast. All spelled out one word at gmailcom. And with that, phil, thanks for your time. I really, really appreciate it, yvonne it was a great time as well, and I'm going to go ahead and end the broadcast now and no one go anywhere, okay.
Speaker 2:All right, See you guys.