Intro: You are listening to the Crypto Core Podcast, exploring the fascinating world of cryptocurrency with your hosts Blake and Brandon De Shaw. Please visit us as www.cryptocorelabs.com.
Blake: Hello and welcome back to another episode of the Crypto Core Podcast with your hosts Blake…
Brandon: Hey I’m Brandon De Shaw. Hello everybody.
Blake: And we are going to talk about the apocalypse of cryptocurrency. I’m kind of following the drops in prices with cryptocurrency the last week. Brandon if you want to start, maybe we can go over some new stories.
Brandon: Yes. So it’s been interesting as has happened many times since I’ve been involved and owned Bitcoin and other cryptocurrencies as there’s a massive, quick, fast, earth-shattering drop. And everyone declares that the end of Bitcoin is here, and the end of crypto is here.
Blake: Which is not the first time that’s happened.
Brandon: Right. Like you’ve seen it happened several times just through your experiences. And so then they go out, of course, the news, the journalists, many of whom do not… they do not understand the monumental shifts and changes coming due to the block chain and cryptocurrencies. And I agree with the premise that the monetary system may not move to Bitcoin necessarily, or may not move to Ethereum of Litecoin. There may be a coin that ends up gaining worldwide acceptance, but the fact is that this block chain technology and cryptocurrencies which are not controlled by a government which are limited in the amount that can be made, I truly believe that’s the monetary system of the future. It reduces the number of middlemen that have their hand in your pocket and get to take their fees for processing and doing whatever else, and it brings it down to a peer-to-peer level. Just like, Blake, the Lyft and Uber industry. Now instead of dealing with taxi and the taxi cab company taking its cut and all that, I’m dealing with a dude who may sell me insurance during the day, and then may give me a ride that night. So it’s down to the peer-to-peer level. And that’s why you see these news stories hit is because I don’t think that the journalists really understand; heck, these same journalists, Blake, the Internet totally disrupted and changed the news industry and yet they continue to cry about their low wages being journalists.
Blake: You can almost see why they would have some complaints about. I think with Uber and Lyft, I mean our kids won’t even, they won’t even imagine a taxi cab company where… I could still remember taxis. And our parents probably would never imagine there is an Uber and Lyft. So I think that’s a great example. Another would be just, even if it’s a silly example, but social media; and look at MySpace, how that’s gone. Some people won’t know MySpace ever existed. MSN Messenger, these early chats that were in the early 2000s. I wouldn’t be surprised if your kids have no idea that they even existed.
Brandon: Yet I had a… My first profile was on MySpace. And then you go out and befriend Tom, the famous guy who’s looking in the mirror whenever I’m looking back at you.
Blake: It’s probably still on there if you go search for yourself. You can see who your top 16 friends are.
Brandon: And he cashed out. He cashed out. He did okay. Alright. So one of the neat articles, neat as in fascinating because these are getting to be pretty standard template. But the headlines screams at you with some all caps: Bitcoin price warning. Nobel Prize winner warns cryptocurrency likely to totally collapse. And my thought is when you went in and did exactly the opposite of what Nobel Prize winners told you to do, he would probably end up just finding this world, if not very, very successful. So the Nobel prize winner, get on the horn, Robert Shiller, some sort of Nobel Prize winning economist and he says a half-truth theory, says, “It has no value at all unless there is some common consensus that it has value.” And I totally agree with that premise, but it’s kind of a half-truth because there is value because people do have a consensus that it does have value and they’re making investments, and in some cases, heavy risks. So Shiller goes on and then started calling blabs. Of course drawing parallels between the Bitcoin craze, and the tulip mania the world experienced. And said that it’s like cryptocurrency is likely to follow in the footsteps of its economic predecessor, which is the tulip. However, unfortunately for Mr. Schiller and his other Nobel Prize winners, is that there is value in a decentralized peer-to-peer, cutting out the middleman where the currency is limited in scope type of currency. Yes, he’s right – currency is an agreement, but there is an agreement here that it has at least some value, and the other cryptocurrencies also have some value here. So who will win in the cryptocurrency battles? We don’t yet, it’s the early on, it’s early on. But these guys are pretty typical of what the articles you’ll see whenever cryptocurrencies drop in value.
Blake: And people do want decentralized banking. We watched a documentary a few nights ago about how basically the financial crisis of 2008 was a huge moment in people’s interest in cryptocurrency and kind of want the first, big spice into it. So there’s a general consensus, and I think as we go on it’s easier for the average user, I think that consensus will only grow.
Brandon: Yeah. There’s another article here: Cryptocurrencies investors worry, wait after Bitcoin price dropped. So I’m one of the people that’s just kept their money in mostly Bitcoin at least in the last couple of years. And then just wrote this out assuming that if there’s value there, the price will recover. And many of us got in fairly early enough that we didn’t have… It wasn’t like we were trying to catch the last little rise before the drop. We were in fairly early before the steep pricing occurred. So there’s some NPR speculation on how low will it go, etc. And then one article that I like to is from an Australian newspaper, and it was a great, Aussie-style headline, and it was, “I actually don’t quite care.” Australian Bitcoin investors hang tough. And they were quoting, I thought it was really neat, they were quoting a 19 year old computer science student from Melbourne, and he said, “I actually don’t quite care about the volatility,” believe it or not. He and his mom invested in Bitcoin over a year ago, they made considerable profit, and they’re not too bothered by Wednesday’s drop. So that constitutes a big core of the holders of cryptocurrencies is that we truly believe in the earth-shattering, wealth shifting, paradigm changing to get really it right here, way that this is going to totally change things and disrupt the entire economic system.
Blake: There are going to be a few people that are in for just for those peaks and gains when they have a chance, quick trading.
Brandon: Oh yeah, yup. The traders, easy money. I remember this saying from traders in the investing world is that, “Money made really easily is money that gets scared really easily.” And so you see that where people are just yanking their money out because they made these quick profits and they thought that they were just in it for quick ride, and that they always make money. What they don’t have is the past historical knowledge of big up and down swings of cryptocurrencies due the last few years. And it’s like a buck and bronco, the people that are holding on tight and don’t understand what they’re doing, they get bucked off and get pretty muddy.
Blake: And if you’re in it for the long haul, some of these points where it get to a lower price are really when person that’s fondling would probably buy in.
Brandon: Yup. And I am fondling. I am fondling. Okay, that hits some of the news articles I wanted to read.
Blake: Perfect. Thanks for that. So next, I’m not sure what this is, but the NNT Antifragile Principle?
Brandon: Oh, yeah. So he’s reading off of this outline, and I put NNT. An NNT stands for ‘Nassim Nicholas Taleb’, and he is a deep thinker, former trader, actually is probably still trading. And he is the author of the book called ‘The Black Swan’, and he as also published some books recently on Antifragility. And I think one of his latest book is ‘The Bed of Procrustes’, and Nassim Nicholas Taleb is very interesting guy, gets quite controversial because he’s getting fights on Twitter with journalists and everybody. But one of the neat concepts that he described, and I’ve really been paying attention to it and like and I do believe, is a concept of Antifragility, or Antifragile. And what he means is something that is actually made stronger by disorder. And so for instance, a coffee cup, he makes this analogy; a coffee cup is something that naturally we think of as being fragile. So if I drop it and knock it over my desk, it’s probably okay. If it drops from a few inches, it’s probably okay. But if I dropped it from two and a half feet from my desk onto a tile floor, the handle might break off or the thing might break and it’s pretty much useless. So coffee mug is something that is fragile. And your body is Antifragile; if you go to the gym and you really wear yourself out and lift heavy weights, and maybe even your joints and muscles are sore for days, you are making your body stronger that way because you are adding stress to this, and you’re gaining from those stresses. In one of the examples that NNT, Nassim Nicholas Taleb, has is the restaurant industry as a whole. So an individual restaurant, that cafe in the corner that started up a year ago, is a pretty fragile thing. There could be some changes that cause that thing to under. They can have a construction project next door, and the restaurant goes under because no one thinks that it’s open still. So restaurants, individually, can be fragile things, but the overall restaurant industry as a whole, like the ability to go out to eat at any given night on your street or neighborhood, that is antifragile because they can see what mistakes are made from other restaurants, and the industry as a whole can stay strong at trial and error, really. And in business, if you’re out conducting trial and error and seeing what happens in the market before you spend a lot of money, that is an antifragile activity. And so I want to relate that now to these big drops and big corrections. I don’t know if I would call them a correction, because I don’t know what the actual price of Bitcoin should be. It could end the year at $100,000, who knows. It could end the year at $1,000, I don’t know. But the process is moving towards antifragility, because it’s through stresses the system and the people participating in the system become stronger. And so cryptocurrencies become stronger as a whole because for instance, you might shed some of the skittish people right now, but then gain some true believers or the true believers like me are going to put more money in and invest more money. So the system is made stronger by these stresses that are induced on the system, and it comes out better and stronger on the other side.
Blake: And I guess you can also relate that back to even specific coins right? With the Bitcoin, and then for example, Ethereum which has made some improvements on the coin itself, such as the smart contracts and faster processing. So even competition between coins has made it a more antifragile market.
Brandon: Oh heck yeah. And then can you talk about that? One gist was a Ponzi scheme. People were warning to us a Ponzi scheme, and finally this week I think, the Ponzi scheme finally came to light.
Blake: Yeah. And it’s important that we’re not investors by any means. We’re just two guys talking about cryptocurrency and wanting to explore it with our audience. But yes, so it’s BitConnect. And I haven’t really heard of it, but I noticed all the news articles, I think, I don’t know, Tuesday or Wednesday this week. So basically at some point, there was a way that you buy BitConnect coins, and once you’re in there you are promised a guaranteed interest throughout the year. Classic Ponzi scheme. And I think earlier this week, they say, “Well we’re actually discontinuing that lone portion of the coin, of our service.” And instantly, I believe, it dropped. It was around $200 and dropped to $30, $20 within the 24 hour period.
Brandon: Yeah. They called that The Elevator Ride. So it’s like an escalator going up, and then when the entire thing is exposed it’s an elevator ride dropping down to zero. And this is the Wild West, folks.
Blake: And it really shows you what good research does. You know, going to these forums and stuff. There’s quite a few posts previously saying that, “This is a Ponzi scheme. I would definitely do not put all your money into this.” And once again there’s still people unfortunately on that elevator ride down.
Brandon: Yup. If it’s too good to be true, especially in cryptocurrency, it probably is. And it pays to do thorough researching of the team of how exactly the thing is working. If it’s, “I will grant you that cryptocurrency and block chain,” in general is complicated. And Blake, we’re just kind of learning about it in participating in it, and learning by doing. But at the same time, you still have a great level of common sense and wisdom based on your experiences, and you have to apply that even when you are getting into these, and they are hard to understand.
Blake: Even though what makes that BitConnect situation more confusing that it’s still trading. It actually has gone up a little bit of $45 and it still being traded.
Brandon: Yes. Why won’t you try and just see if it’s making another buck or two off.
Blake: You know, the Wild West is fun, it’s dangerous, and so I guess let’s just learn from our mistakes. Well, luckily we did not make any mistakes with BitConnect, but a lot of people did.
Brandon: And sometimes you watch a dude get gunned down in the saloon, and it’s just an interesting experience because you won’t forget it.
Blake: Finish your whiskey and leave before you more guys come in. Yes, so I think we covered that. That’s a great principle in relation to Bitcoin. And so let’s see, even though currencies will vary greatly over time it will be a movement to this technology, a massive disruption is coming. We kind of discussed that first of all going off of just an outline here. So now, banking. So you heard some news involved in banking, and about crediting?
Brandon: Yeah. There was a very good podcast episode on Crypto Cousins, which is an excellent podcast, I recommend everyone check them out, they’re very, very good. They are learning, they are doing things in the space. They know a lot about it but they are also learning all the time, and they have great people on interviews. I think the interview with John McAfee is outstanding. And so I really recommend checking it out the Crypto Cousins, they’re very good. And they had this early adopter of block chain and crypto on, and he had an interesting concept about banking. And he said that, “Some of the names of the banks will be still around, but the industry is going to be absolutely, totally revolutionized and changed.” He said, “For instance, there’s going to be a lot more banks, but the bank is going to be the dude in your neighborhood who knows a lot about cryptocurrencies. And you go to him and he sets you up and helps you with your wallet and things like that.” I can see that; that’s kind of the Uber-ization of things, moving more to the individual, peer-to-peer level, people you know. You know some good fellas, you know some people who are good people and you can trust them, and you will bank with them. And then the question that this guy that they were interviewing in Crypto Cousins. He said, “Now that brings up the next question which is mortgage. How do you go borrow 250 grand to get a mortgage?” And he said that the concept of the ICOs or initial coin offerings, which is basically a way for a group of people that want to think that they can make some sort of profit, even if it’s a small profit or something, we’ll pitch in some of their money, a little bit of their money. And he predicted that that’s how the larger loans will be worked out at some point is that they’ll have their individual offerings for loan. I might invest in somebody getting a mortgage in Tallahassee, Florida, because I know Tallahassee is growing and I know who this dude is because he was in the Navy with one of my friends. And I’ve heard that he’s offering a loan on one of his new house that he wants to buy. Or somebody’s business wants a business loan to buy a new piece of steel manufacturing equipment, and I want to participate in that and make 8% a year or something. And I can definitely see that. I can definitely see banks being squeezed out because they are a very high priced middleman for sure. So check out Crypto Cousins. Check out that episode. I think the episode came out all within the last two days. So I want to say it was like the 18th or 17th of January 2018. So check that podcast out. Those guys are great. They actually inspired us a lot. So we have to give them props.
Blake: They call it self-proclaimed cousins, I believe they now…
Brandon: They call everybody their cousin that’s in the space. So they’re neat.
Blake: Yeah. It’s really cool to see other shows coming out. There’s a few other ones too that are great to listen to. And just on that note, if you’re listening and enjoying the show, please share it with your family and friends and anyone else you think would be interested.
Brandon: And rate us too, right?
Blake: Yeah, yeah. Please rate us. Leave a review. Even if that’s bad, that will be fine.
Brandon: It’s not fine. Only leave a review if it’s very, very good and give us five stars if you think that we deserve it. I’m not kidding around.
Blake: And you can voice your bad reviews in an email. That will be sure to read and share with the world.
Brandon: Yeah. And we have contact form at our website www.cryptocorelabs.com. And please give us feedback, good, bad, or ugly. We’re big boys, we can take it. We want to improve, and we want interesting topics to talk about. So hit us up on there, contact us at email@example.com as well, as a decent way to get a hold of us.
Blake: Yep. That’s good. So I guess just to kind of go over. I think we covered the last podcast just an ending, is that here in Crypto Core Labs we want to be a kind of how-to business, and also with the Crypto Core Podcast, be a how-to show. That’s whether how to mine, how to build miners, and then maybe sell those miners, and where to buy those miners, building a web app. And I don’t know, do you want to talk about that at all?
Brandon: Yeah, sure. So the whole concept that we want to do is that we want to learn ourselves by doing interesting things, and the first thing is mining. We’re doing some mining ourselves. We have a miner that Blake actually finished building yesterday, and it’s mining right now, right next door. And we want to sell miners. So we have a basic model that we have for sale. And it’s just something that you can hopefully just plug and play. We should have it all set up. You’ll need to direct it to your own wallet, but we’re going to be selling these miners as well.
Blake: And the website for that is www.cryptocorelabs.com/miningrigs.
Brandon: And the other thing we want to do is I have this web application that we started. I actually hired some programmers to build some cloud-based app that is finding and comparing the current pricing for different currencies, and showing when there’s a disparity between the prices. And so I have I think, probably it’s at about 75% level. And I’ve got to get it onto a domain. So that ultimately what I want to do is I want to sell it as a business. I just want to sell the web app as a small business, and someone can take it to the next level. But it’s about 75% ready to get to the point to where I want to sell it. So I got to migrate that onto the website. And we’ll probably produce an episode totally, entirely on how on zero to ten on how exactly we went from coming up with the concept, hiring programmers to get it done, and then getting that out, and actually trying to just selling the asset itself. So, again we want to try and do ourselves and show you how we’re doing, participating in the cryptocurrencies based on a variety of ways. So that’s the, what I’m calling the Crypto Arbitrage 2.0. And then the third thing I have a concept, we have a concept for our own initial token offering, or initial coin offering, and it has to do with logistics industry. And so we’re fleshing that out, we’re on the early stages. I’d say we’re in the 15% to market stage of that. But we also want to build several episodes, or maybe build an entire program, education program on how we’re doing this and how we’re coming up with the idea, getting it developed, doing the initial offering, seeing if the market wants this thing. And so hopefully that will be developed in the white paper. We want to be consultants on building white papers for folks who are doing ICOs and ITOs. So we’re going to learn by doing. Like we said, we are going to create our white paper and white papers around this concept for our ICO or ITO, initial coin offering, initial token offering. And we’re just going to open the curtains up and let you see inside. And some of it is going to be kind of ugly, but we’re going to share that all with you so you can see what we did and then you can take that knowledge with your own idea and apply it, and participate in cryptocurrency. Because there are tons of opportunities here. Just tons, oodles.
Blake: We need some fellow gunslingers for the Wild West. So thank you for listening. Check out www.cryptocorelabs.com. The Crypto Core Podcast that you’re listening to now, please share. And we’ll talk to you soon.