CryptoBasic Podcast

Your source for all Cryptocurrency information, made for the novice investor. 

Eyes there.

Brent:

Anything else you think?

Mike:

Because i just figured out what really happened. J j brian's girlfriend just walked into the door so brain has to finish the no.

Karim:

I said that before. I knew now that all i've also got time stamps of the chat.

Brent:

Time to wrap it up.

Mike:

We're about to start talking.

Brent:

Okay?

Karim:

All right, all right, brett. I'm sorry. Komodo neblio make sure you wrap it up here.

Mike:

Oh, look at that.

Brent:

Oh, it's also correct.

Mike:

Girlfriend is sick. All right, ok, i think it's.

Brent:

Time to wrap it up.

Mike:

Wait.

Karim:

I'd like to start off with a very gracious thank you for turning into the crypto basic podcast.

Mike:

I am michael laki and for this up, so i'll be the referee and i will be joined by my usual co hosts, brent filmon.

Karim:

Hey, participant number one and karim bouquet for this episode, i'm going to be in the stance audience.

Mike:

So brent, you're the only team.

Brent:

This episode is part of our one o one siri's and just a reminder that any of our episodes from our wanna one serious could be listened to at any time.

Mike:

And in any order, please give them a download when you can today stop because a bit unique, we're going to discuss some of the potential various reasons that all things crypto related can end up being a giant waste of time.

Karim:

Or, if ready reason. We looked back in twenty years from now and say to ourselves, men, we really thought we all had it figured out, boy, were we wrong and guys let's be honest cream, and i have absolutely no problem admitting women wrong, am i right?

Mike:

That is right.

Karim:

I noticed you missed the naming, their what career, but i we definitely have no problem bitty good were wrong.

Brent:

I see what he's doing there.

Mike:

I see what he's doing their bit brandt, i think that's, a reference to a little exchange we had on the discord, but now any.

Karim:

Whose guys.

Brent:

This is kind of a tough topic for us.

Karim:

Because we have built this podcast because we are excited about what crypto can bring to our future and how it's going to change the world. However, we recognize that there are a lot of people that are smart and have good points as to why they believe crypto may not succeed. So why don't we get started? Were to cover this and just kind of broad topics, and we're going to kind of flow around little conversation style. But brent, why don't you get us started on some of sustainability aspects that we aren't sure about?

Mike:

Okay, so for the course in step, so we're just basically taking the bad side of krypton. We're going to talk about what the arguments are against, and we don't have a really good order for this, so we're starting with sustainability. The argument here is that these coins and these currencies in these platforms, they may not the sustainable in a couple of different ways now, when to so she created bitcoin, he created it to be mined until twenty one forty. What happens after that? What happens after those miners don't get any mining rewards for my ing the coin? Speaking of mining, what about energy consumption? How is sustainable? Is it for sale so much energy to be used on bytecoin at the price that it is now and consumed so cream? I know we've talked about these before, but what are some of the statistics on exactly how much energy is being used to mind? Bytecoin do you remember?

Brent:

Not off the top of my head but liked argument just remains that it's using a ridiculous amount ofthe power that the bitcoin network itself is already using more power than a lot of countries altogether and obviously you know it would be pretty tough to argue that bitcoin is generating from an electricity standpoint that's just not a fishing you know especially at a time when most countries are trying to transition to a more energy efficient on dh more sustainable just use of energy in general now of course one of the i mean counter arguments to this is the fact that the space is slowly transitioning to proof of steak but it's not across the board so at least as of the time being i know that it takes i want to say it's like tens of thousands of dollars between in energy costs that it takes to create just a few bytecoin like just the total amount of computational power because people have to remember it's not just a computer that actually ends up creating the block but every single time that bitcoin block is minted there are hundreds thousands of computing power that were competing for that block and since they didn't win that block they essentially that all of that energy is being wasted now the argument of course could be made yeah but all the energy is going into securing the network but i think that the point remains that if there's not some kind of change if if bitcoin just keeps increasing in value and therefore mining difficult to keeps increasing and therefore there are more and more mining pools that's just not a sustainable use of energy and at least for the proof of war coins that's going to be a significant challenge going forward yeah somebody shared in our discord pretty recently it was a chart that said the approximate dollar costs to mind a single bitcoin per country it was broken down there's really nice infographic we're probably to re shared in the discord but that infographics set a lot where a lot of the energy costs to mine a single bitcoin was very expensive four thousand three thousand there were a couple places that you know is the in the under a thousand dollars but there are other places it was north of twelve thousand dollars and that says a lot to me and i know that we've had some some articles on the flagship we've covered where you know we talked about some greenhouse computing and some other people that are trying to head in the right direction but i'll be honest i don't trust the intentions of people when the amount of money is on the line that big coin presents i think that no matter what people going look for shortcuts there look for ways to save money and i think it's going to be a little bit at the expense of the environment while that is still going to an option so the other sustainability issue that we've talked about a lot is definitely quantum computing and this is a really hypothetical type of conversation for me because i don't fully understand what is going to make a computer quantum but the concept from what i understand is rather than living in a world of ones and zeros i believe that gets expanded to ones zeroes twos and threes so i believe it expands it either another dimension or two dimensions and that that complexity is extremely difficult for somebody you know a mere mortal like myself to understand well i believe it's going to cause a tremendous amount of problem when it comes to these proof of work coins solving the problems you're going to have these super computers they're going to do things in a much quicker rate obviously a lot of these computing powers they come from centralized powers they come from up top all that technology trickles down over time so i think this is a difficult situation for us to grasp at this time but could cause a lot of problems in the future for bitcoin itself and other types of cryptocurrency so my group like i do want to address your coming about become mining but just to give you an idea because i pulled up the statistic riel quick it's estimated that the number of u s households that could be powered by bitcoin is over six point four million so yeah that's that's a lot now is that a yearly consumption or is that a daily consumption?

Karim:

I think it evens out because it's a ratio you know but that's obviously a lot especially when we consider that a u s household is consuming more energy than most households.

Mike:

So imagine how that translates to our third world country but anyway onto the point about quantum computing yes that's going to be another question because a lot now there are crypto currency projects that are specifically focused on being quantum resistant but without necessarily understanding all of the complexities of quantum computing i think what this comes down to is ah lot of cryptography right now is designed around the computational limits of some of the of the actual computers that would be you used to try to hack the system so you know it's kind of like there are some old systems of cryptography that couldn't be deciphered by hand because it would just take a all ungodly amount of time if you were trying to break a cipher by hand it would just take millions of years right?

Karim:

But once you put it into a computer modern computer the computer khun try out a couple of million calculations in just a matter of seconds, right?

Mike:

So those older systems that were designed to be unbreakable by hand just can't maintain their security through modern computing and essentially that's the threat that quantum computing posters because it's able to be in more states ah like you said it's not just a buying a ring system the increase in power is exponential and therefore the idea is yes maybe it would take your computer or my computer you know, millions of years to try toe brute force a shot two fifty six algorithm but it might on lee take a quantum computer a couple of minutes or a couple of hours because it's able to fit in so many more guesses so many more calculations per second so now i think that one of the knot count arguments but one of the the silver lining is that we could say is quantum computing as you said, we'll have to emerge from major institutions you know, the first quantum computers are not going to be in a hacker's backyard they're going to be ah, you know google, ibm it's going to be governmental entities with a vast amount of resource is and those usually especially since they tend to come from the economic world, i would expect the information that we might be on the brink of being able to break current algorithms.

Karim:

That information would start trickling before they could actually do it.

Brent:

You know, like i don't believe and this is purely my opinion. But i don't believe that we're gonna wake up one day to find out that shot two fifty six can now be broken as much as there was going to be months or years leading up to actual launch of a supercomputer where people are going to be saying, hey, look based on what it's doing already, this thing is going to be able to break curtain cryptographic systems of that masons cremona.

Karim:

Quick question for you about the quantum computing. Do you believe that these types of quantum computers are going to pose serious threats to lots of different sectors? Or is there anything that comes to mind as to what types of things quantum computing is going to complicate other than crypto?

Mike:

Yeah, one hundred percent, because look if.

Karim:

Something can break bitcoin.

Brent:

Then it can also break the secure connection that you used to connect to your bank. It's going to be able to break the secure connection you use when you go on you two, basically, if so, much of internet communication and so much of modern security. Today, i realized on many of the same algorithms that we see implemented in the cryptocurrency world, that this isn't going to be cryptocurrency specific. However, i will say that crypto currencies are probably going to be the most tempting fruit to go after. So, you know, i mean, it will be interesting to see how that plays out. But no question, if something like bitcoin can be broken, ah, lot of things can be broken.

Karim:

So one of the things i think we're going to try to do is think about how each one of how legitimate and how possibly dangerous each one of these arguments is we can't really sign a number of that but i would say that the sustainability between the energy consumption and the possibility that quantum computing could break it are both very real and legitimate threats to cryptocurrencies mass adoption one that is not in my opinion is the argument that you get from a lot of people that is well it's just a matter of time before somebody finds a way to steal it all and break the code and you'll get that argument even from people who were pretty smart who are saying look if there's code out there it can be broken there's exploits that could be found they just haven't been found yet and i would say that the counter argument here even though that sounds like a legitimate thing is there is such a massive incentive tow brake cryptocurrency and break the coin that yet it's going to be the first thing that quantity competing targets but at the same time if it were possible to find an exploit in bitcoins code it would have been found people exploited verges code like a completely worthless currency to get at it and they found the exploits so if there was an exploit in something like bitcoin or theory um it had been found by now because the reward for finding it is so high and real quick bring you know you mentioned the energy consumption again and i think i may have mentioned this in previous episodes but i really don't think he gets discussed when we talk about the energy consumption of proof of work while i one hundred percent agree that the most obvious or you know the clear answer seems to be something like proof of steak or proof of importance or all these other consensus mechanisms that are being created i do think that people forget that we are also experiencing exponential growth and energy efficiency when it comes to renewable resource is so i don't think it's unfathomable to say that in the following decades technological advances especially in solar and wind could take us to a position where we are generating much more energy than we need as even as a civilization like i don't wantto you know, make this up but i i believe i remember listening want hearing once that the total amount of energy that falls on earth from the sun in a single day it's like one percent of that is more than we need to power human civilization for a year now of course we are nowhere even close to possibly ever being able to harness one hundred percent of the energy that we're getting from the sun i'm not saying that, but we've seen especially in the last ten years that the efficiency of solar panels has exploded that the cost of solar panels has rapidly decreased.

Brent:

We're seeing almost like a more slaw type of progression. So okay, like let's, say that bitcoin is still proof of work in twenty years, but that you could just put a solar panel on the roof off wherever you have those mining equipments, and that the energy efficiency is so good, that it's a stand alone system, that it's not even drawing from the grid. So that's, just another counterpoint to consider. I think, what was the morse law that you reference to the middle of that?

Karim:

So morse lies in computing.

Mike:

How we talk about the fact that every two years or so, the computing power of doubles, while the cost halfs.

Karim:

Now, it's actually starting to get closer to the point where it looks like morris law is going to end, and part of the reason for that is actually we're getting closer to quantum computer.

Brent:

Is it tires out like people for gay it's? Not all theoretical, like the computational power of your computer has physical components, its actual riel transistors, riel, physical electricity and electrons that are being moved around inside the system. So as we get smaller, smaller and smaller, and we pack more and more and more transistors into a smaller and smaller space, we start to run into physical limitations. There's only so far you can go, and once you get to quantum computing, once you're actually using quantum properties of the physical universe, like the lowest level of reality, we once were manipulating that in order to process information, there's a pretty good chance that there's nowhere else for us to go, or that if there is, we shouldn't expect the same rate of exponential increase, so morsel. Ah, looks like it's capping out it's, not going to be at the same pace, but with something like solar energy, we're seeing a similar dynamic where it's getting cheaper and it's getting more efficient at an exponential rate in both directions, so the result is just dramatic dramatic increases in efficiency, i think we did a pretty awesome job covering the sustainability, i really want to go into the safety next, and this is a very complicated topic.

Karim:

We're going to talk a lot about hacking, stealing and fishing attempts and things of that nature, but to me, this is certainly one of the biggest arguments against crypto, and when people, you know, i'm sure you guys get this a lot. You are you're all of your friends, crypto guy. So you know, there's a lot of times where they ask you questions, i'm just like now, don't do it, i don't you know, you are not going to do enough research, you are not going to your home or you were going to leave yourself vulnerable and there's a lot of people that i've recommended teo either wait till i can help them or don't do it or, you know, do some research first, and they're going to be lazy and not do the research. So, you know, there's definitely merits to the safety, causing the mass adoption to slowed down, right? Do you have anything that, like, you particularly want to harp on this topic?

Mike:

So mike is definitely telling people you know what we do we tell people go with coin base a lot of times when when our friends are talking to us because cohen base is a centralized thing that it centralized entity that handles the security aspect and makes things easier but one of the primary reasons that we want to be involved in cryptocurrency is decentralisation so how do we how do we marry the two topics and the fact of the matter is right now especially users are going to choose the is of a centralized authority whether it be in cryptocurrency or whether it be in regular banking and centralized security and also something like fbi see insurance over the wild west of crypto currencies and until that becomes closer together it's going to be very, very difficult for them to be to be adopted like, you know, i've had this argument with friends where they're like well, dude, i just don't care about using another another currency like the government sucking doesn't father may i have one hundred dollars in my bank account and if i want to use it i could use it i don't have to jump through sixteen hoops to try and use my money so you don't always have permission to use your own money, but you most of time do and most of time it's pretty seamless, so cryptocurrency is nowhere near that now. We've used that as an argument for why we're still early adopting here and not all the way in but it's definite hoop that needs to be jumped through yeah and it's not just a matter of you know different priority like having different needs you know like your friend in the example where they have one hundred dollars in the bank you know we know and we harp a lot on some of the neck that's right like the fact that the bank can just make up whatever fees they decide to do and in fact they do some banks will say oh by the way we've decided that because you don't have a minimum balance of two hundred dollars were going to charge you x amount a month just for your money to exist there even though your money on their balance sheet is actually good for them so they can make whatever overdraft fees like you said they can put limitations on when you moved that money those air all the negatives but here's another example if you go and try to send money to somebody number one you have to really screw up to send the money to the wrong person number two even if you do there's a pretty good chance that you're going to get that money back because there's a centralized authority that is taken on the responsibility off ensuring that money's goes where it needs to go.

Brent:

So if i try to send money to mike laki and i accidentally sent it to somebody else i'm going to be able to contact my bank explain what happened there going to be able to look at the transaction they're going to be able to undo it and usually i'm going to get that money credited back and this is just some of the examples not only is it easier to use but in many rial senses there's more security in the bank now your pain for that security in more ways than one but for the vast majority of the population as you said brent decentralization is not the number one priority and it won't be except in times of crisis usually so it does make a lot of sense tow have that safety net of the centralized authority for a lot of people and as long as crypto can provide that there's always going to be ah space for major financial institutions to fill one of the things that i found most interesting about this is the the amount of phishing attempts that i've had to learn from and this is kind of a weird skill i don't relate to crypto it all i really did more to just internet use where you have to be savvy enough to avoid the types of scams that are going on you have to be very cautious about the exact letters you have in your address borrow weatherby chrome or firebugs huobi choose to you you need to make sure you have your bookmark set up that take you to the exact website exact place that you need to be you need to be aware of you know you need to be involved in discord so we can know what types of scams air going on there was a big issue with ether adults a few months back where it was it was a very, very good fishing attempt the on ly way you could have told the difference was that it didn't upload the light tweets from the official either delta twitter account that they usually kept scrolling in the bottom right of the screen so there's very advanced techniques that are using you to lure you away from traditional safer websites two sites that are militias that are attempting to steal your information i think this can be applied to crypto but as i started this conversation with i think this is more of just a internet skill and in overall protection that i think people need to be more aware of as they're navigating a much more complex internet than we once had i think you're right and i also think that it goes a step further in crypto because the best hackers the best fissures are targeting crypto because of for instance things like monero and the privacy aspect and being able to transfer that into whatever they get it into whatever money they wanted in without the regulatory authority behind it to stop them and reverse the transactions by stealing credit card numbers somebody might be able to track where i'm spending the credit card number that i stole by still monero good luck so there have been some really, really good fishing attempts i mean just to give you an example something that could have happened to somebody to me today i went to amazon dot com i typed in amazon dot com i put in oh amazon dot com and it popped up amazon and i was like, wait i just i knew i did it too like i was like i just typed too fast and present him like i couldn't know in there but i looked up on amazon dot com was up there well turns out amazon dot com owns amazon dot com but if it was a fishing site that just cloned amazon dot com i could have logged in and got got there but yes, so that was an interesting little side tangent, but there is so much hacking going on.

Karim:

We threw out of statistic on the flagship was nine point one million dollars worth of hacking per day and cryptocurrency, or at least in but yes, cams overall between theft.

Mike:

And so that is going to make sure there's no there's, no question about so wary to take control of their huobi their own bank and have their own cryptocurrency.

Brent:

And is the reason people are still turning to centralize points of failure like coin base, like finance and it's.

Karim:

The reason why we have such a hard time recommending not to do that to somebody who is new to the space it's like, hey, man, look, you want to buy the day, fine going coin based, grab it, but you need to learn mohr and learn about why you shouldn't be on there.

Brent:

But it's tough.

Karim:

I mean, nobody needs to go learn about how visa works in order to keep their money in a bank account. So so the safety is really.

Brent:

Something i will say guys i do think it's interesting when we talk about comparing this to like let's say the viruses and the internet and everything like i think that the internet presented to people are much more dangerous world in a very real way right? Because before the internet like your personal information or even your financial information was never exposed away that it was posted on it and i think that either we all experienced our new somebody who experienced or even we saw the means of opening up a virus in your computer or accounts getting hacked all of the exposures that the internet created and yet there's still mass adoption and at the end of the day even though some people are still pretty bad at protecting themselves and some people are excellent at protecting themselves and most of us fall somewhere in between it's basically a risk that most people have accepted and they take on because life without the internet is unimaginable so i do think that on the one hand the space itself will need to continue to um improve in order to reduce the risk that the user's face however i do think that as long as you make that risk just a little bit smaller you don't have to eliminate it you just need to make it so that you can mostly navigate without constantly tripping over something then like the internet it's still going to appeal to most people if the best applications and the best features available are through the space, people will still come.

Karim:

I find it a little bit interesting that you decided to take the stance that you said something along the lines of imagine a world without the internet would be unfathomable i can tell you personally that you know, in two thousand seventeen britain i worked for a company that needed people to sign a document through their e mail by clicking some buttons and you'd have thought that i would have been asking them to run a five k while reciting all the digits of pi out loud the whole way like it was absolutely like unbelievable what percentage of people had no concept of how to open an email and sign a document so that they could get you know, some insurance for their family yeah mike well, yeah, but that's like, you know, that's like me going to a college campus and asking for political opinions and then saying, wow, almost everybody in america is liberal.

Mike:

You guys were working out a life insurance company, which is not a representative sample of the general population most people who were your customers where part of a particular h group i'm going to venture to guess and the ads were targeted like daytime tv, so yeah, what percentage of your customers were under forty five?

Karim:

Twenty percent pretty small number yeah no that's, a very fair counter argument.

Brent:

But i think that, like you have to consider that the three of us, plus our discord type members.

Mike:

Our community is extremely advanced as faras.

Brent:

The eye use of technology is concerned.

Karim:

Yeah let me be clear about what i mean obviously obviously life without the internet is very imaginable and even especially if we go outside the country and we go to certain parts of the world life without the internet is literally all that they know in certain areas but what i'm saying is that as the internet becomes more more prevalent people that grow up with it they understand that there were still exposed to a ton of risks i mean, how many people you know have crappy passwords and they know that they shouldn't have crappy passwords and they use the same password on multiple sites even after they've learned and they've heard all the news of all the times that people have been hacked and you get all everything's out there right?

Mike:

And yet almost the majority of the people still walk around taking on that risk because the convenience of just being able to log into the site that they want to log into to them overcomes thie risk of quote unquote being hacked now the difference of course is that we crypto were always dealing directly with value where is with the internet were usually one step removed from value so for example somebody's trying to hack your account in order to blackmail you or exploit you in order to get money or maybe they are giving you a fake virus so that you could go by the quote unquote virus removal tool so it's always one extra step with crypto if you make a mistake, the values immediately taken, so i think that the risk is much more at the forefront, so i think people will have lower risk tolerance, but my only point is that if the internet becomes necessary to your daily life, you will just accept the risk that comes with it, and i see crypto having a similar dynamic.

Karim:

No, i totally agree with that, and i think that the crypto was going to take a while to become mass adopted, and if we look at, you know, twenty five years ago, that's when the internet started becoming a thing, it would not surprise me at all for it to take twenty four years for bitcoin to start, like being relatively mass adopted if we think it, you know, it's two thousand twenty eight, ten more years from now, that might be how long it takes before we start seeing it at most businesses, that most coffee shop, things of that nature that wouldn't surprise me at all.

Mike:

So i think that it's, important for people not to confuse the time that technology taken to get adopted with its inevitable failure, possibly, i think that's important distinction to make, so i'll take us on a trip down memory lane real quick, just since we're since we're discussing the internet, right, spying i wanted teo paint the picture.

Karim:

Eight year old brent wants to use the internet, and maybe nine.

Mike:

I don't remember when i was first using internet here, but the here's, how i had to do it, i had to first go unplug our house phone, run the line that was from the computer desk all the way to where the house phone is plugged in across the house.

Brent:

Tell everybody i'm doing its own huobi trips over it, plug it in, go back over into my computer, log onto my america online account, wait, and hope it goes through.

Karim:

Wait, did i forget all the times i had to troubleshoot when it doesn't go through, right, so now i go through, i have to check how many minutes.

Brent:

I'm allowed to be on based on how many minutes we still have remaining on our package and then i had to kind of prioritize what things i wanted to do during the minutes that i had on the internet which was almost always go into ah they were the equivalent of multi mmorpg the time which were but they were all text so i go in there and play these like role playing games and compare that to today's internet where if i can't get a wifi connection in a starbucks i feel like fuck this place we're never coming back so it's a very big difference from how technology comes on and i was not even really an early adopter of the internet at that point i mean people in the eighties were going through massive hoops to try and figure it out so taking the hoops that we need to go through they are not necessarily the best argument against cryptocurrency succeeding because we have plenty of evidence of emerging technologies going through math the growing pains adoption being very difficult and still catching on and going forward and being good so the safety is definitely a real concern the comparison to the old internet and then the and things like that that one is not how hard it is isn't as much of a concern for me personally for mass adoption and going forward i don't believe that's one of the good arguments against i think we're definitely going to see a type of business transition start probably somewhere around twenty thirty range where i'd like to see people start making decisions about where they spend their money economically similar to how they're doing now where you know there's a lot of these modern style busies craft beer bars thes gaymard arcades where internets a very big deal and you could actually decide where you're going to spend your money based on features such as the internet.

Mike:

Why c a situation ten years, fifteen years from now where?

Brent:

What do you mean they don't take crypto there?

Mike:

What are they in the stone age like that's?

Brent:

Ridiculous like we're not going there, i definitely see those types of situations of all they've done line the only counter argument that i'm gonna meet guys is and i'm going to play off of the example you just gave brent while i agree with you and you know, i remember those days to somebody but just picks up the phone and you here the line and you're like, get off the phone or a suli they're already don't ever you know, they already got you by picking exactly over ok, but now there was a lot of trial and error there's a lot of experimentation, but now imagine that every time you made a mistake, it would cost you or your family money, how much longer would have taken you to actually start playing around within?

Karim:

And, you know what i'm saying?

Brent:

One thing that i'm not sure if it ever happen to your family, kareem, but sometimes if you went over your minutes, they would charge you an extreme, extremely large amount of money.

Mike:

I heard all kinds of stories, people that their families, you know, i grew up in a kind of poor area i'm not saying i had any a lot of money growing up as a kid and all, but i don't think that's ever personally happened to me, my wonder of my mom correct that, but if we had what we thought was a twenty five dollars, well, bill and he came back and it was like five fifty or something outrageous, like i heard lots of stories like that where families like had to take the internet away from their kids because they couldn't handle it responsibly.

Brent:

And these were families that were given unexpected financial hardships because they're kids, accidentally or irresponsible with the internet, i'm so on and so forth, these air limited examples was prime or negative examples happening and crypto currently, but i think that dee comparisons really are pretty limitless, in my opinion, to karim's point, though, the what you said there was, what do they do?

Mike:

They took the internet away from those kids, so they removed their ability to cause that problem again.

Karim:

So maybe somebody making logical decisions, they do something that caused themselves three thousand dollars worth of bitcoin, because they sent it to a big one cash address, and they can't get it back, you know, maybe they say, all right, i'm taking this away for myself.

Brent:

I can't handle this.

Karim:

I need to wait until this is is a better situation.

Brent:

I need to wait until they come out of the unlimited plan.

Karim:

You know what?

Brent:

I actually just created it own argument through this discussion that i think is pretty important here.

Karim:

Crypto itself is not going to be taught from kids to adults like extremely large percent of other technologies.

Mike:

If you want to get into crypto, you have to literally as adults since time aside and decide this is something i want to do.

Brent:

Learning krypton was going to be more in the category of going to the gym, doing yoga, going for a run, whatever it is that you have to do that, you know, is responsible for your person and your daily activities. That's not necessarily going to be easy for a lot of people. My daughter already knows how to do snapchat way better, and i do. So i asked her things when i want to learn from maps that i don't use very often. Crypto is not gonna have that exact same catalyst where the kids are gonna learn the underlying technology and understand it drastically better and then teach the older generation that is a pretty interesting the thing that's going to be a real road blocked online.

Mike:

I will say that this is is why i have chosen to spend all of the time that i would be spending at the gym doing yoga or running outside on learning crypto currency because i see it is responsible okay, brent if that was true you would know nothing about cryptocurrency because you're jim and yoga time was zero minutes and i know you dedicated more time than that to crypto but mike i will say in response to you i understand what you're saying about kids but don't underestimate the role that young adults will play in teaching their parents because i know not just from personal experience like i know that i've taught my parents i know that brian has taught his parents but i also know that i've had probably like half a dozen interactions since we began this podcast right like well, i'll be at the airport or at the mall or in the poker room were in one of our crypto basic shirts and somebody starts a conversation about it and the people that i have encountered who are like in their forties or fifties and they are like oh yeah i have some big corn or i have some theory um i would say like the majority of them told me that their son or daughter got him into it mostly their son but that their child got them into it so you know yeah, not kids i agree with you, but still i do think it's something that's going to spread upwards from the millennial generation and the generation immediately following which i don't what were the z or whatever they're people born after me?

Brent:

I mean, listen, i took computer keyboard classes when i was a kid.

Karim:

I played oregon trail when i was in kindergarten.

Brent:

You know, i had the ley line tto learn what the internet was going to provide.

Karim:

I learned i learned so much in elementary school, my parents had absolutely no idea, and i did teach them, i agree with you that this is something that needs to, you know, go to young adults, i guess the one problem that i have those like i started studying what a computer was and what it could provide the life at five years old, and i still use it today.

Mike:

Now, there was probably a for your span where i was just satisfied with an ipad and didn't have a computer much.

Karim:

But, you know, i really just i really think that it's important to find education at the high school level, maybe even the middle school level, something where and again, this is the long term. This is nothing that's going to be coming any time soon, but it was going to really make me happy the day that i start seeing blockchain integration classes in the high school levels, and i think that's something that we're going to need a society for mass adoption.

Mike:

We don't even have credit lying sento high school like you can't even learn about how important your credit is at the high school level so that would be nice but i don't i think that's a rosy future i don't expect the end and the last thing i'll say which kind of goes with this broader theme if the idea really is that as an intelligent adult if you want to get involved in this space you need to take a big chunk of your time and use it to try to educate yourself because it's such a minefield that's what it's just not going to be that is america and historic massive argument against mastodons i agree i think that's a realist you so let's go ahead and move it on the next section and this one could go a lot of different directions but the idea of regulatory pushback is something that has been in the back of our minds from the beginning i don't know exactly where you guys stand i would say my overall opinion is that long term regulation is going to be very beneficial however it would be very ignorant of me to say that short term there may be some scary moment i really true believe that we're going to be forced to question ourselves at one point is this the right direction that we want to go do either of you guys have anything do you really wanna add here well look i mean i think that yes a regulation is a double edged sword as we've mentioned before if you want to become institutionalized if you want to become mainstream and even protect investors and consumers regulation is going to be needed i do think that the fear here is what happens during a major crisis i honestly think that that's the only real scenario that worries me i don't think that minor regulation is going to be much of an issue i've mentioned before that i think the united states and the european union our societies that tend to put a lot of protection on personal property so it would really surprise me however let's not forget that when we were in the great depression when it was a time of grain need roosevelt decided overnight that private ownership of gold was illegal and everybody in the united states had to sell their gold to the government now in a way we've talked before about how okay the government trying to just block everything is in a way a waste of time right because it's like well it's decentralized and how are you really going to stop it but less burial let's be genuinely realistic if there was some kind of massive crisis and cryptocurrency us scapegoated and somehow the congress passed a law that said owning big coin is illegal and you have this many months to get rid of it how many of us would actually whether through that legal risk, like it wouldn't take a data scientist to find out, i have bitcoin.

Brent:

Forget about the fact that we have a podcast.

Karim:

You know, you could just go to coin base, subpoena their records, and it's going to stay right there that i have purchased bytecoin in the past.

Brent:

I am i really going to risk all of the other elements of my life.

Karim:

If for whatever reason, they say this is illegal, and just the ownership of it is illegal.

Brent:

Now, the likelihood of that happening, in my opinion, is very small.

Mike:

But never underestimate how radical things can get in a time of crisis, so that would be my biggest fear.

Karim:

How extreme can government control go, or how extreme candy attempts to choke cryptocurrency and its cradle go it?

Brent:

Two things get really bad on a recent flagship we discussed, i want to say it was two flagship to go by time the subsoil gets released.

Karim:

We discussed the idea that when we look back at the original creation of bitcoin, we look at it it's in two thousand eight, beginning in two thousand nine, it's it's, a response to an economic crisis. I'd be ignorant to say that we're probably gonna have future economic crisis. My hypothetical question for either of you if big quinn was created two thousand as a response to the internet crisis, and it was at its current mass adoption state in two thousand eight when that economic crisis began, do you have any underlying opinions? I mean, obviously, this is all hypothetical. What are some of the outcomes that could have happened to the crypt of space? As a result of this, i can't even start to maybe even come up with something for that.

Mike:

I mean, yeah, i don't even want to speculate there. That is i.

Brent:

Do think i do think there's a lot of outcomes that make crypto shoot up a lot about in value and there's a lot of situations that make it plummet in value and i guess that's that's, the underlying a problem with this particular discussion on this particular topic, you know, cream was recently discussing on the flagship about how the banks are setting themselves up in a way where they might be able to take advantage of some of the lesser ah participants and some of the underlying customers. If that happens, then where does that leave us? The question is, even though we're three people that are very involved with a pulse on this community, we think there's wildly different outcomes that could come of this that is part of what scares me is that this could really set back, you know, a lot of what we're trying to accomplish in the space. Are we going to reach bubbles shirt? Is this going to dial completely? It's it's really impossible for us to say, but that's the idea of this exact episode.

Mike:

Yeah, i know, i really can't i'm with brand where i feel like it's almost impossible to figure out what would happen. I mean, i do think that it it would be tough to make the regulatory argument that let's say the crisis was connected to bitcoin, even though you already see people trying to make it. I've seen some mainstream press trying to say that ah, you know, the next bubble could be pinned on bitcoin, which just looking at the math is ludicrous, right? Like just looking at the market cap of stocks, the market cap of so many other things to say that cryptocurrency is ah, primary factor, i think, would be insane. Ah, but look let's say that i i you know, i hate saying this, but let's say that there was a major terrorist attack, and we somehow found out that that particular group was funded using big quit or monero you know, all of a sudden when you're waving the flag aah that's when ridiculous laws can really come to pass, and that would be the kind of scenario that would ah, in my opinion, be really tough, really tough pill to swallow, because again, if they could criminalize ownership, are we really going to just say no on a principled stance would really take that risk?

Karim:

All right, complete absurd tinfoil hat time. If the government wanted to make up a story and pin bitcoin as the problem for that story, what's the best way they could go.

Mike:

Okay, i don't know. I add a, and that might be too hypothetical out and there's a there's.

Karim:

Like we'll say, i don't.

Brent:

I don't think that any.

Karim:

We're talking about government, complete smackdown, illegal regulation.

Brent:

I do not.

Karim:

I do see the comparison to to the to making owning gold privately illegal. However, that was done, you know by the time this might be considered damn near a hundred years ago like this is very is a very different world and literally every country would have to get together and agree to do the same thing to to really end crypto currency spending so yeah, yeah i guess the u s could say it's completely legal way have we've had issues with you know, the different countries already teetering on that and having issues like that and the us could say it is illegal for you to own crypto currency and then now you you have to sell it back to us so they could maybe they don't buy it back from you maybe they just see it getting so high and they eliminate all try to eliminate all that wealth right right off the bat, which doesn't make a whole lot of sense but i could see them possibly seeing it as a threat to the economy if the if the u s economy started to go into a downturn and maybe imposing some sort of a regulation similar to that but we're in a worldwide situation now so government regulation is scary to everybody and it is the primary thing people tell me about cryptocurrency they say it doesn't matter the government's never gonna let you use another currency they're just gonna wipe it out if it ever becomes mass adopted there's good quell it and um you know they might try, and it will be interesting to see how that goes and how people respond.

Brent:

You know that the government hasn't even outlawed cigarettes, and they kill people constantly.

Karim:

So like it's, like they're there, as long as you're in taxes, i don't know, i don't see it, but i i mean, you know, that's a whole different story that i like, okay, marijuana and prostitution don't kill people, either.

Brent:

Brandon.

Mike:

Those are illegal in most place, no, but my point there all i agree with your point there was that something that is clearly a net negative that could be outlawed is not so it's once it's already legal in scenarios like marijuana.

Brent:

And, for instance, if we alcohol was already illegal and then prohibition but the alcoholism or accept that even though it's significantly more dangerous than marijuana is legal, it is totally legal to drink out hall and maryland's, not because it was illegal first, so it's different.

Karim:

So right now, cryptocurrencies legal.

Brent:

So making something illegal is harder than making it legal, i think.

Karim:

Well, that's, not quite true hemp wasn't illegal.

Brent:

It was made illegal.

Karim:

But look, i agree with your main point, and the last thing i'll say, which kind of goes on the other side, is, um, if a government like china, you know, even they have teetered on making certain things illegal or not.

Brent:

And at the end of day, like there's still blocking and there's still cryptocurrency in china, so us is only the first that's, right, it's not going to be the european union and the united states that are gonna, like, do a massive ban.

Karim:

And if, ah more authoritarian government, like china, is it's not stopping it within their borders, then this is probably not a major thing to worry about.

Brent:

Another idea as faras the regulatory pushback would be concerned, is what we experience with online poker.

Karim:

So if we want to set the stage a little bit where i want to say two thousand twelve, this is when the the government decides that they're no longer going to allow banks to make transactions with online poker sites because they don't want to risk u s citizens gambling online and these online international casinos.

Mike:

So they were presented with a complex problem, which is a decentralized well, i mean a centralized platform that's international that used the internet to connect computers from people's homes from all over the globe to play in these online poker rooms.

Brent:

The u s government felt like there was a problem.

Karim:

They should make this illegal.

Brent:

Really the only reason they probably did this because they weren't making taxes on it.

Karim:

That's another story for another day.

Brent:

So their only option was to try to cut the funding paths between the customers and the actual international site, which was within its jurisdictions within its laws with on the island.

Karim:

I forget exactly which island man i believe pokerstars itself is located on, so that was something we've experienced.

Brent:

They really truly wanted to just abolish this, but they realized it was out of their hands.

Karim:

They couldn't do anything about it.

Mike:

Bytecoin falls in a very similar category most cryptocurrency with the exception of some that could be classified as securities which that's, you know, a whole another topic the actual kryptos themselves that it's going to be nearly impossible for the government to say this is illegal, because if that happens in a lot of the people that make their lives around that are going to have to do a poker, players had to do, i still have friends that live in mexico.

Karim:

I still have friends that live in canada. I know people that moved the europe, australia tto play online poker because it was their career and it was the passion that they loved. So i don't see how any regulation could decide that bitcoin is not going to be something that we can still have his part of our lives.

Mike:

Yeah, ultimately i agree. I think we could move on. I i agree that this is going to be almost impossible to stop from regula.

Karim:

I think that of all the concerns we will talk about today, regulatory outlawing crypto is the least of all the concerns the next section that we're going to cover is going to basically stem around the practicality off can these kryptos be used in daily life canopy uses a currency can abused by coffee brent what do you know what your stands here so here is so this is we're talking about it as an argument against right because i think we all think that yes, it can eventually be used as a currency be used to buy coffee and the like but what if it can't?

Brent:

What if there are a couple of issues for instance with bitcoin specifically there is a term known as the crew been fallacy we've talked about it before but the the basic theory is that because bitcoin is deflationary it can't succeed as a currency because people will hoard it rather than spending it because they expected to increase in value so it won't be spent person a person a person because you know if if i expected my dollar to be worth two dollars by the end of the year if i just held it then maybe i wouldn't spend it as much, you know it's kind of interesting, weird dynamic so it could and we're seeing kind of an implementation of this right now i mean well, so many of these currencies air not being used this currency's because it just isn't ready for that yet so s o the crewmen fallacy is a very riel argument against and i know karim has other arguments involving deflationary nature of the currency.

Karim:

Yeah, i mean, i've said for a while now that i don't think bitcoin has a chance to become the quote, unquote.

Mike:

Ah, internet currency that a lot of people discuss like it makes sense to me as a store value.

Karim:

It makes sense to me as a valuable commodity.

Brent:

But look, first of all, as you mentioned, if people are hoarding and nobody wants to spend it, but then we go to other factors.

Mike:

The fact that there's a limited supply means that there will always be massive volatility.

Brent:

The idea that, if enough people own big coin.

Karim:

The volatility is negligible doesn't really apply because world economies air going to keep growing that's like a fact human economies they're going to keep growing knew things were going to be created so there's always going to be a disproportionate no amount of demand to a limited amount of supply of bitcoin so is going to be very difficult to price a lot of goods and bitcoin another problem with the idea of trying to make big coin de standard currency like people that say could have thrown the dollar for example which i think is ah completely absurd claim i don't think that big one could overcome like overtake major currencies and part of the reason is if let's say for example some people would argue all right but look as long as bitcoin trajectory is relatively ah going upwards then most people are still gonna want to take big coin because yeah i'm gonna price this good and bitcoin i'm going to pay bytecoin but at least it's going to be worth more money in the future that same amount of bitcoin okay but then that means that you could never ever take out loans in big quinn it's literally impossible how can you take out ah million dollar loan in bitcoin if by the time you pay it off you might owe ten million dollars because bitcoin has appreciated which essentially means that the economy microcosm that is bitcoin is not going to be able to include borrowing and lending because the increased valuation of bitcoin is going to make it untenable toe borrow if you don't have borrowing and lending then you're missing one of the most fundamental aspects of modern economies now what what i mean by the specifically i'm not saying that big coin can't exists within a larger economic ecosystem but the idea that the's deflationary currencies that are incredibly volatile and that are goingto have they're just price fluctuated constantly that are going to increase in value over time they're not going to function it's currencies and a lot of people i believe it's ah that bull get into crypto currency from the libertarian perspective that bytecoin is essentially the new gold and that we should be back in a currency that is backed by gold we are not in a currency backed by gold for a reason and it's not because the united states government is evil or because bankers have a big conspiracy that's not the reason one the reason why is because the gold standard failed to address the problems that society's faced over the twentieth century and that's why every single modern economy abandoned it every single one so while i think that bitcoin has a lot of potential and other cryptocurrencies have a lot of potential the stability that comes from a medium of exchange that is growing at a proportional rate with the economy that it is representing that is not going to be replaced by big point however i still think that big coin has you know like ah very special place and cryptocurrencies in general are goingto have ah very unique place in the larger economic ecosystem so all that still makes sense.

Brent:

We've had this we've had this back and forth before.

Mike:

I still disagree with cream on this topic because eventually the the volatilities depending, is used more, more.

Brent:

Your volatility isn't pegged to us dollar anymore, it's pegged to its pegged to bitcoin or satoshi or whatever.

Karim:

So if you can take a million sto she loan and pay back a million satoshi, as long as you're using satoshi in not dollar.

Brent:

So yeah, if you're taking a million's toshi alone and then that becomes worth it's worth a million dollars and you take it and it becomes worth ten million dollars by the time you repay it, and you're doing everything in dollars versus everything in in satoshi than yet that that is very tough.

Karim:

So if something ever happens where one of these currencies does catch on, the deflationary nature doesn't necessarily matter now.

Brent:

There are currencies that have a flea inflation, too, so they may be the ones that end up catching on their their coins that do like the, you know, the they have no theoretical maximum and that kind of thing, but, um as a quick as a quick side note, brent i just want to point out that this problem has already been encountered by major currencies, like the fact that when a currency becomes way to inflationary or way too deflationary, it affects the lending system that has already been.

Karim:

The case is with currencies that are the nominated in them in their own terms.

Brent:

So i i still see no evidence whatsoever that i mean big coin would have to be like the only currency in the world like everybody's getting paid in bitcoin.

Karim:

Because somewhere along to chain, whether it's, the person who's borrowing and you're saying, well, he's going to pay it back and become okay so he needs to be earning in bitcoin.

Brent:

Welcome.

Karim:

He is earning and becoming that's fine, but at some point in that process there is conversion to other currencies.

Brent:

And if bitcoin is the on ly one that is growing at a disproportionate rate, toe everything else, things like lending become untenable well.

Karim:

I think they i think they are currently not attainable and what you're talking about, his currencies that were fine currencies that you could take linda loans out against and in and pay back in, but then they they became ridiculously ball told from non volatile so like for instance, it would you contain cologne in cuba? You can take a loan with the cuban, the cuban peso, and most of the world doesn't use the cuban peso's so they can operate within themselves and spend their pesos and use their faces and that kind of thing. So the that that applies with everyone's currency like with that argument that the that the currencies have to be used throughout the entire world so that their safe to take alone against then you can take a loan against anything except the u s dollar, which is an accurate you can take, you can take loans with any of the currencies that are used anywhere, so it doesn't need to be the only currency used in the world.

Brent:

It just needs to be not changing by five to ten percent every day.

Karim:

Well, right brand, but okay, we don't have to harp on this too much because we've had this argument before, but none of the currencies you mentioned, i think, had the deflationary relationship to the dollar that something like bitcoin that's well well, i don't know what.

Brent:

I don't know what the deflation the deflation is.

Karim:

Deflation is the key that we're focusing on here s o but the they certainly are out of the dollars kind of strange, but the because it's, actually not great right now, but most currencies would have been going down against a dollar for a long time.

Brent:

So it was like, especially the cuban.

Karim:

The cuban peso was getting, you know, lower, lower, even those theoretic.

Brent:

They have, like an entire currency, it's pegged to the dollar so unique, unique examples exist, and i just don't think that if you're if you're able to spend it, if you're able to do everything with ex cryptocurrency that you could with why dollar, then i think we'll see the true effect of the deflationary system, or see if maybe the ones that inflate are the ones that are adopted versus the ones that that deflate so.

Karim:

I get it, i get it.

Brent:

I guess ultimately the main point that i would like to make is as long as you have a limited supply volatility will still be significant.

Karim:

It's oh it's impossible for volatility to not be significant if you have a limited supply and if volatilities is large, then it becomes very difficult to price goods in that currency, especially when you're talking about things that have low margins, maybe not software, maybe not colognes, but when you're talking about everyday goods like milk or bread or, you know groceries things that have razor thin margins of profit and rely on economies of scale to succeed, that means that four percent fluctuations can be devastating and therefore i don't see those goods ever being priced in and a currency that has a limited supply can just change price overnight based on increased demand.

Brent:

Yeah, i know that i know the the comparison is gold, but we've never tried to use and i mean not since two hundred, three hundred years ago we haven't tried to use goal is the medium of to change, so i don't know if the volatility of gold is accurate because we don't use gold is the currency if it was like super easy to spend gold day in and day out, then we i think we would have a better idea of how the support another thing.

Karim:

I want to touch on on this topic of whether not again, skins, whether or not it can succeed as a currency.

Brent:

You know, i kind of look at what small businesses were like in the, you know, two thousand's range where a lot of them were adopting the credit card machines and the debit card machines.

Karim:

And there was quite a bit of evolution.

Brent:

I felt like economically in small business.

Karim:

Crypto actually is a really nice stepping stone for these businesses to take control ofthe, you know, some of the fees and some of the money, you know, transitions from customer to business to government, you know, flowing in and out. Are people willing to take?

Mike:

Their time to actually learn what this is going to take i kind of i'm not confident on that topic if you look at you know a business like a gas station they may benefit tremendously from being able to host the node for some type of stable coin of the future that you know is not tether that is willing to be audited something along those lines is way more likely to succeed as thie coffee buying type of currency in my opinion i do you know stand on karim side of the previous argument that i do believe bitcoin will remain too volatile to be considered something we can use for everyday spending i think bitcoin will be fine to purchase other types of spending it and i don't think it's going to something were to use bitcoin in small transactions whether stan bytecoin comes along and presents this as an option i know a couple places are working on it that would be great whether we decide to use something like you know pivx acc's or you know other types of smaller cap coins that i have a little bit more peer to peer business the business type integration in mind all of that is an option but i remember we were looking at nano at one point and you know if you want to know if you want to go to host a nano node that that's something you have to learn how to do in order to accept your nana transactions at your business are all these business is going to take the time to do this that's yet to be determined, there are plenty of businesses that are trying to help integrate blockchain technology dragon chain depicts couple others that air, focusing mostly on the business oriented side of things and that's going to be fantastic, and i want that to be adopted.

Karim:

I'm just not a hundred present convinced that everybody's going to take the time to do this.

Mike:

So right now it is really difficult for a business to take cryptocurrency it when you say bytecoin accepted here and you see like the little sticker on the window, almost every one of those businesses are just paying a service so that they can accept a crypto and it's immediately turning into us dollars or euro, or whatever their local currency is, so they're generally it's coin base they have that they have the integration, so they're not really they're not taking it, which is a big lakers saying, like everybody needs to start taking this stuff of it's going to be working as a currency, and if you can't just go pay with it and they have to go through a pane processor that cost the more than, say square or what did some of the other ones ah, whatever i know squares one.

Brent:

So square is the one that you see all the people in, like food trucks taking with those, like sleek little white ipad holders, that they turn around, like, sign here, if you'd like to leave a tip and they putting face.

Karim:

So we've said before, if wal mart sit changed one percent of their transactions, the blockchain would save them. But she's a little money, but not if they're doing it this way. If they're doing it this way would actually cost them more. So, the the savings of getting around the payment processors right now doesn't really exist unless aion emergent, willing, tto straight up. Put my q r code on there and tell you as soon as that transactions confirmed, i'll give your goods so yeah, i mean, look, ultimately i agree with you.

Brent:

This is about framing. I don't think we should necessarily look at it, as are people really going to do the do dylan is toe work that is necessary, everybody is going to follow their own selfish best interest. So what this is really about is the developers creating systems which incentivized users in the right way, and then the business community will react when it's more profitable when it saves on cost or when there is user demand. If you can get more customers because you accept the payment method that the customers want to use, businesses will do it. If you could save a ton of money, businesses will do it. And if it's, easy to use and easy to integrate businesses will do it. So i don't really think that we have to worry your care much about how the individuals will behave and we should just step back and look at the bigger system. But look at the bigger picture and say, you know, what are the trends of forces? How can we make it so that if everybody follows their own selfish interest, this is the result that we will get, yeah.

Karim:

That was one of when i had, like, a really heated argument with one of my friends, where they were saying to me, look, just show me places that take bitcoin, nobody takes it. I'm like it's all over the place. Look here, go to new way, goto, whatever, and they were like, all they do is just take it and converted immediately, the us dollars that's not taking bytecoin and i was like, but i can spend it so that stupid. So, like, we went back and forth, but he's, right? They're not taking it. They're not just receiving the bitcoin and then do it, and they're like, ok, got some confirmations. Now. Give your goods there, using a payment processing system that is willing to take the risk of the big point and pay them u s dollars. And that is not that's, not the same, and eventually it'll need to be the other way.

Brent:

And and just to be clear, forget about the businesses, you know, because i think we have to face the hypocrisy, not even the see the fact that everybody's, being a rational actor, remember when everybody made fun of the fact that a bitcoin conference couldn't take big coin for payment? Well, when, when we started this podcast, we debated whether or not we were going to put the seed money that we collected between the three of us in cryptocurrency, and ultimately we decided that we could not do that. Why? Because we needed the money liquid, and we couldn't have a fluctuate because we needed to be able to pay the editor we needed to be able to pay the monthly accounts for thank god we did back in january, by the way, exactly, thank you us, that we made the right decision, but why did we make that decision?

Karim:

Because right now, bitcoin is not a currency, it is a volatile investment that we think might pay off in the long term.

Mike:

So even the re crypto enthusiasts, when they follow their own self interest, and when they're acting rationally, i cannot keep their ah business seed money in bic one so that's like beyond case closed that bitcoin is just not a currency right now, and it's not going to be any time soon, all right.

Brent:

The next topic that we're going to kind of try to tackle here and just kind of decide how we want to view this as an argument, the concept of what is bitcoins, true evaluation.

Mike:

What are various cryptocurrencies, true evaluation, and this is going to be an extremely difficult topic, one that i've had, you know, lots of people ask me, you know, oh, did you take all your profits in january?

Karim:

Did you do this?

Mike:

Did you do that?

Karim:

And to be honest, we were so new to the space that it's very difficult to know what true evaluations are.

Mike:

So kareem do have anything that you have as a as an opinion or a counter argument to crypto from an evaluation perspective.

Brent:

Yeah so just to clarify we're talking about valuation here and the argument that i want to make is i actually think this is one of the best arguments against cryptocurrency even though it's not a long term argument and that is if somebody wants to make the case that cryptocurrencies air overvalued i have literally no response and i think that there's multiple ways to look at this like first of all at its core it is true that the majority of people that put money into bitcoin are doing it because of the greater fool theory and the greater fool theory is the idea that you buy something today because you could sell it at a higher price tomorrow right and again the reason why that's different to let's say for example stock is because there's an underlying asset which is changing in value so for example if i buy apple and apple is making money every year and then they take those revenues and reinvest them in their company and other companies bigger so they're having bigger sales which means they have bigger revenue and they re invest that so when i sell that stock ten years later there's a real reason why there's a change in price.

Mike:

However one big coin today is the same thing is one big coin ten years ago. The only difference is that people today feel that a big coins worth around ten grand and people ten years ago felt that a big corn was worth not even five cents, so from that perspective, the question them becomes are cryptocurrencies, overvalued, period, and i think that there's some really good arguments to make, and i mean, look, is this market really irrational market? Tron, virg. I mean, how much more do we need to say, like just because their project that we like, for example, i love cardano there's, no project there, there, there's no product yet. I love neal. I love ethereum. How many actual workable products aren't ethereum right now? So while i want to look at the theory, um, and say, okay, a theory omise definitely worth what the price is right next to it is tron, a multi billion dollar pile of garbage.

Karim:

Hey, they just put out their main that they're the, uh let's just i'm just saying but we need to be honest with ourselves here so i i really do believe that as thes networks mature and is more applications are built on top of it that there's going to be more and more value that they're going to keep increasing in price that they're going to become more ubiquitous but is there any argument that we could make as to why beacon right now should be worth around ten thousand as opposed to a thousand no there's not and is there any argument as to wide maybe you should be back up to twenty k like it was a few months ago no there's not we are completely and on charted territory dealing with commodities that nobody has any idea how to price so i do think that one of the best arguments against cryptocurrency or at least against people investing in cryptocurrency is saying even if the technology works you guys were praying in an insane premium because this is the sector that surrounded by hype and i think that how much money some of these projects have been able to raised is absolute proof that there is a ton of validity behind that perspective one i did see one argument okay i do believe that crypto currencies could be overvalued but there is one argument that i think is not very good which is the idea that the reason they're overvalued is because you khun on ly consider it based on the underlying asset and that there's.

Brent:

Nothing supporting big one.

Mike:

Okay, there's, not.

Brent:

There supporting big coin that yeah exactly so if the argument is that bitcoin doesn't have anything backing it therefore the value is zero that means that bitcoin is overvalued at one dollars so if your models says that something is overpriced if it's priced at anything other than zero that's probably not a very good model so the question is if bitcoin is not like the dollar which is backed by the us economy and it's not like apple stock which is backed by apple's revenues then what is it like?

Karim:

And i think that the one of the things that comes closest to ah which i stumbled on a narco which i think makes a lot of senses it's like art it's like fine art where why is you could have it's very subjective and some art is worth nothing my best work is worth zero dollars because i'm a nobody and there are pieces of art out there that are worth tens of millions of dollars because people decided that that individuals art is worth tens of millions of dollars and i don't even want to hear the argument with some people say oh well the boy the thing about artie is that you can hang it in your wall yeah well i'm telling you right now that there's hundreds of millions of dollars worth of art that are in warehouses waiting to be resold at leader art auctions so the bottom line is this dynamic already exists in our society where we can take certain things, and the value of them can just change drastically based purely on demand.

Mike:

So i think that when it comes to big coin, i think that in a way, this is closer to what we're discussing here. I don't think that that argument is going to apply as much when it comes to platforms, and i think that there's going to be much more riel ways to measure their activity when there are dozens hundreds of applications on ethereum, each one becoming more more practical, creating riel tangible value to different businesses and consumers, and then that's going to create more more demand for the underlying gas, or ethereum that requires to run the network. Then we're talking about a totally new valuation metric that is really taken into the count the network itself, whether that's going to involve metcalfe's law, the idea that it's the value of the network, you know, the number of nodes squared, that's, that's going to determine the network, or the number of connections, who knows?

Karim:

And i personally think that there are going to be entire dissertations written on how to evaluate cryptocurrencies.

Brent:

Ah, but that's, along with their way of saying, is it possible that crypto currencies are overvalued today? Absolutely one hundred percent, yep.

Karim:

Can't agree any more with any of that. So there's, even though ah, i'm putting money into crypto currencies when i can, i am fully aware that they may be. They may be overvalued. I do not know. I try not to sweat the price movements as much as i used to.

Brent:

I still get notifications from my application from the little app that i have.

Karim:

Nana was at an all time low today that thanks dawson.

Brent:

Glad.

Mike:

Good. Just let me that notification. Also, i have an email and i found a cool ready quote that i liked when i was talking about we've been going over the different validity zone. Some of these arguments and the validity that cryptocurrency may be extremely overvalued is very valid. Ah, the validity that the that there's a environmental impact is one once, and it was very ballot. It's not good for anything is not balance, that is i mean, we have we've gone over the different things and i found this likes to sing, quote by guy and reddick community that i just happened to like the user name was four to zero, but p h o r with the number two in and zero spelled out it's backed by faith. Like all currencies, gold is backed by faith that alchemy doesn't work bytecoin is backed by faith that math does work, while dollars are backed by faith that governments will always pay their debts so there's nothing backing gold or u s dollars? Nothing physical backing gold though gold back in the u s dollar and there's no dollar backing crypto currency but it's ah, it is a different matter i definitely want to touch on real quick.

Brent:

The the idea that cream touched on earlier about verge and tron, and and to a lesser extent, even i want to include tojoin in there as it's it's, a community german coin and there's. A lot of these that are starting to pop up that air community driven, i know, was the silicon valley coin that side by the pied piper.

Mike:

Coin is yeah, it's also trying to be acuity coin and and, you know, there's, a lot of it there's a lot of value in the tribalism of these things, but what really value can you assign to this that's a difficult thing, you know, that we can't figure out, and we're not going to try, you know, if we didn't touch on this already, i'm not sure if cream dead, but the idea of how many i ceos air being released and how a lot of murder probably going to end up being complete crap, it is a big problem for crypto, and is a big argument against crypto as a whole.

Karim:

Do i see a scenario where we go through another type of internet bubble?

Mike:

Yeah, i think it's almost inevitable where everybody's, learning what this space is going to provide and what is gonna happen if that bubble does occur and people probably myself included, are gonna lose, you know, ninety percent of what their assets values are, you know, i think this this first quarter of two thousand eighteen really, you know, tested the hands of some of the people that were new to the space that the new people that got to enjoy the rush of the surge north, i guess, to me, are these people going to want to learn long term that's something that's to be determined.

Brent:

I think that even though there's going to be shit, i ceos, i think there's going to be the eventual forest fire that's gonna burn a lot of things down, but the strong projects with good teams and good bases are going to stay solid.

Mike:

They're going to do the right things, aaron a don't play by the rules, and eventually they're going to rise from the ashes and become the major dominant technological companies that are, you know, going to compete with the greats and the largest regular stocks that exist today.

Karim:

A random thought if you guys had to pick a coin that is going to be the pets dot com of the of the crypto of the crypto bubble, like you had to just pick one that ten years from now, we'll look back on it and were just like, yeah, that, like everybody says, pets dot com and that is the that is one hundred percent the embodiment of the of the internet dotcom bubble, even though everything fucking blew up in but that's not calm is the one that everybody harps on.

Mike:

Okay, brent, but just to clarify when you say the pets dot com are you just talking about something that's going to be a bust?

Brent:

Because i also see pets dot com is something that was ahead of its time like pets dot com failed because they came too early to try to provide a solution when most people weren't really doing their shopping online, but right now there are very successful websites i get most of my pet supplies on the internet today, so are we talking about something that is probably going to fail but might be awesome leader on or you just talking about, you know, the company over evaluation of pets dot coms little talking about like what they raised ah, i have a really easy answer here and my opinion is going to be big quinn cash i think bitcoin cash is riding the coattails of bitcoin a bit too much they're doing it in a controversial way.

Karim:

I think five, ten years from now we can look back at this and say, i don't know why we spent so much time recognizing bitcoin zcash what's yours brent, i i think that i'm you know, just pick the easiest one and it's going to be eos yes are they raise so much money and the signs were there that they're not ready for five different rounds of fundraising five different around easily be looking back, or i am as light on what fuck, we're people thinking now they might, they might also succeed.

Brent:

I don't know which it is because cream do you have it?

Mike:

Do you have an answer?

Brent:

I i said i was going to say, use you like that, i think there's a real argument you made for ryota as well.

Karim:

It'll be interesting, i think i owed as possible also because i owed as quantum computing.

Brent:

It might be a better comparison, and the tangle may or may not end up being very useful, all right, but i could see the tangled, useful run.

Karim:

I mean, let's, not forget toronto was in the top five and, yeah, trunk's, definitely the right answer.

Brent:

Yeah, i mean, it is.

Karim:

Yeah, i mean, i chose you know specifically because to do the direct comparison to pets dot com where the thought of what this is makes sense if it could be implemented properly.

Brent:

Towe where, like you couldn't have called pets dot com like a scam right off the bat we can call we were calling the trump trying to fucking scam since day one like that that's, if you lose money and drawn like whatever that's, not a big deal but like eels sounds like i'm still we did our one on one on it.

Mike:

We've talked a lot about it.

Karim:

I've seen things go on, i'm still super torn on what i think about yes, yes, i don't know what to think about it it's, not a coin that i can say, yeah, you should go ahead and take a look at that or a coin.

Mike:

I say this is a fucking scam.

Karim:

I don't know which one it is and and going back, i think it's ah it.

Mike:

May be something that we look back on is duh or whatever i don't know but mike i wantto i know we're coming to the end of the episode but you mentioned bitcoin cash and i just there's one thing that we haven't talked about that i think needs to be needs to be brought up and it is the dog mattis ism of the people who have invested in coins or are part of a community and vic went cash in between are the primary point of reference for this if what is going on with quentin bytecoin cash is ridiculous you have big win cash that can that is now a completely different technology than bitcoin but they're pretending that they're the real bytecoin you have bitcoin trying to shit all over a big one cash every single chance that they get and it's just back and forth the if you're on the big point subreddit and you ever say anything positive about bitcoin cash you get to lead it and banned from the subreddit they functioned like the donald in that inn that's regard like you have to be a part of that echo chamber to post on there and the fact that bitcoin dot com is owned by sub by roger bear with decred zcash like so there it's not localized to bytecoin a big cache we can see it and it is prevalent all life but if two communities are actively just attacking each other um, or actively attacking everybody like iota.

Karim:

Anytime you say something bad about the community, it is very, very difficult to move forward from a game theory perspective, even as an over arkin community.

Mike:

Like.

Karim:

If all the crypto currencies are fighting each other constantly and there's a ton of dog mattis ism, it is bad for everything together.

Brent:

And that the hollers and the moon boys that any time you say anything negative about a project that will just go bananas on you.

Karim:

R r, really hurting the space overall.

Brent:

And if it gets worse and worse, we will.

Mike:

We won't ever see a mass adoption.

Brent:

I really liked the point you just made, and i find it very interesting how tribal people become when they're number one coin gets questioned for whatever reason, you know, i've owned a lot of coins that i currently no longer own, and i understand that i was making decisions bait to invest in for certain reasons, and some of those were find some of those were not as responsible some of them were okay, i just find that people, if you're unwilling to be wrong about a coin, then you you just are going to run into so many more problems with your portfolio and your evaluations and that those problems were probably to run into your life in a lot of ways this is truly something that i believe i really see a scenario where ten years from now, maybe even fifteen years from now we're viewing these major platforms almost more like a religion almost more like its own community, its own civilization there's going to be i think i think there's going to be a lot more verbal digital, you know, bulling between sectors and i think it's going to get a lot worse i think the bit quint cash is a very interesting catalyst that is going to give people truly a weird perspective on this space the people that are in our discord, the people that are active crypto community people are all just so tor nw by what this is and it seems so unnecessary that i feel like even though a lot of us are really intelligent you know working hard and trying to learn as much as we can it seems as if that it's going to eventually drag people into different corners and force them to be against each other you know i know this is something that's very near and dear to karim but you know when i looked at what happened during the last election period the type of scrutiny that were put on the candidates and the type of ways that people were treating each other just by choosing one side or another i think it is really really unhealthy i think it's really unfortunate that that's the way the sensationalism that our media is causing and i really do see this being a problem with crypto if you're pitting ethereum against cardano long term that's a problem those particular projects will probably co exist because they have lot mutual friends but what happens when you go outside their direct umbrella it's very difficult to know what the iota is they're going to do where they're going to be combative and you know i've talked a lot about how i feel the super super early adopters may not have the best social skills they may not have the best marketing strategies they not may not be fully aware how to run a business just because they got a group of guys together that can do some really high level coding project can they run?

Karim:

Their business is the way that we'd like to see them run their businesses that's yet to be determined i see a lot of complications down line yeah, i think it depends on how the community and the projects are structured and i think you gave a couple of examples iota is extremely combative and it comes from the top and at least from what i've seen, i haven't seen arguments or excessive like let's say lack of professions and when it comes to neo cardano any theory, um, which are in fact all competitors, but we're just real quick leg as much as we like to see it don't doesn't a little part of you take a stack back when you see the talic like shitting on somebody that, like, maybe deserves it, but like maybe he goes a little bit too far like i still feel like that's kind although there's been several videos where he's like attacking craig, right and things like that because you're claiming to be satoshi ok noth ng to do listen, i have to do yeah, i think this is very relevant i think this is just like if you're on another project mike he's not attacking another network he's attacking the fact that there's an he's attacked many definitely attacked many networks on twitter.

Brent:

This has been a recurring theme.

Karim:

He we laugh repeatedly how he's willing to shit on people.

Mike:

The only example you give me so far is craig, right, which was an individual trying to personally capitalize on a lie, and he called him out for being a lighted should all over china.

Brent:

If i looked a tte, you definitely should not like bobby.

Mike:

Listen, i'm not saying cream cream, listen, i'm not saying that this is something that's out of line i'm saying just the behavior itself.

Karim:

I'm not sure how big a fan i am off the example that you're setting to other people.

Mike:

This might be a little bit zoomed in, it might be a little unnecessary and pointless conversation, but i think it's not specific to krypton, i would say number one like, i think that the projects that have there's many projects that have handled themselves very professionally and i do think like the example that's being say is okay, batalik is is anti plagiarism in the case of trun, and i think that it's deserved.

Karim:

And also i think that if you look at the way that many traditional car companies have treated you on musk this's in specific to cryptocurrency, yeah.

Mike:

We drew comparisons to the us election there because of how a dogmatic people got about those but in that scenario you're only allowed to choose one or the other ah you know in theory so here if you hate the toxicity of the big point of decline zcash community you can feel free to invest in cardano who treats everyone their community seems to treat everyone very well and they don't have the dog mattis is um behind although sometimes some people will say that some people will say that everybody thinks cardano the air parents cryptocurrency in that kind of thing so um you know we i would say you i wish you could see kareem space right now he is like passing out at the microphone is sick of our shit he is ready to he is ready to go to sleep he's done he's done with link of the length of this episode and we should probably wrap it up what's a good brunch just completely making things up but i enjoy watching well correct well britain makes up things that created crave looks and have like where you're coming from with this eyes there anything else you think because i just figured out what really happened j j brian's girlfriend just walked into the door so brain has to finish the episode oh i said that before before i knew now that all i've also got time stamps of the chapel it was time to wrap it up.

Karim:

We're about to start talking.

Mike:

Okay.

Karim:

All right, all right, brett, i'm sorry.

Mike:

Oh, make sure to wrap it up here.

Karim:

Oh, look at that.

Brent:

Oh!

Mike:

Oh, it's also correct.

Karim:

Girlfriend is sick.

Mike:

All right.

Karim:

Ok, i think it's time to wrap it up.

Brent:

All right, guys.

Karim:

Honestly, if you listen this far in the episode, thank you very much.

Mike:

We super appreciate it.

Karim:

We appreciate all your support, you know, feel free to join a discord server.

Brent:

Check the show notes and if you are feeling like it, please give us a rating.

Mike:

And itunes and honest one is fine.

Brent:

We believe in the product that we produce and we thank everybody so much for all your support.

Karim:

So what?

Mike:

The crypto basic podcast.

Brent:

My name is mike.

Mike:

I was here with brent and karim.

Brent:

Thanks again for tuning in the members of the basic by gas.

Karim:

They're not financial advisors were idiots.

Brent:

Please do not listen to anything that they say without first doing your own research

The members of the CryptoBasic podcast are not financial advisors, and this information is provided for entertainment purposes. Please do your own research, and don't listen to these idiots.

The CryptoBasic Podcast is owned and operated by Cipher Consulting Group LLC.