A Beginner's Lesson in Cryptocurrency
We hear about Bitcoin and other Cryptocurrencies, but understanding what they are and why we should consider investing can be complicated.
In this episode, Gary Leland and I discuss what cryptocurrencies are, what their purpose is, and why we should be paying attention to them. This is the perfect episode for those who are trying to learn the basics.
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Find the Full Transcript Here:
Erin Gregor:
Alright, so welcome to our very first episode of, I'm officially calling it Clarifying Crypto. I've got the domain, we've got the.com so I'm going to go with that.
Gary Leland:
I've been wondering for three weeks what the name of the show was going to be.
Erin Gregor:
I know. I didn't know. I'm Aaron Gregor. This is Gary Leland.
Gary Leland:
Hello.
Erin Gregor:
Gary is the, what's your technical title now when it comes to crypto, you're a crypto podcaster, but-
Gary Leland:
That's my hand, I go by, but I'm the Crypto Boomer. I think I may be switching to the Crypto Boomer because a lot of this OK Boomer's given boomers hard time. So I'm sticking up for the boomers because I can tell you the people who get upset about, OK Boomer are not boomers.
Erin Gregor:
Well, I just learned about, OK Boomer like a week ago, I had no idea about this hashtag or anything. Okay, so let's start off. You've been investing in crypto now for a couple of years, you're a Bitcoin maximalist, which means?
Gary Leland:
I think Bitcoin is the only coin you need to have. It's the only true coin. The rest of them pretty much are... Is this going to be R-rated or what's the-
Erin Gregor:
We can swear. Might as well swear. Go for it.
Gary Leland:
Might as well because everybody else does. I think it's just baby boomers who don't swear anymore because we were told not to when we kids. But actually this really must not be much of a swear because everything else according to Bitcoin maximalist is a shit coin. And they said it in Congress. It's on a congressional record. The Congressman said, "So you have Bitcoin and you have shit coins." So it must be okay to say that so everything else is a shit coin.
Erin Gregor:
Okay, so that's what you believe. So you've been investing in Bitcoin for a couple of years now, you have several shows about Bitcoin, can you list them off?
Gary Leland:
Yeah, if you go to cryptopodcastor.com you can see that's the center page that I have 4 Minute Crypto Show that comes out every day. It's one news article every day in four minutes or less. I have Crypto Cousins Show, which I just got through doing a show, switched over from that to this, that comes out once a week, I have, What is Bitcoin Podcast, I have the Railroaded Podcast, I have the Bit Block Boom Podcast, and then I have the Clarifying Crypto Podcast that I'm on. This is Clarifying Crypto, right?
Erin Gregor:
Oh, yes, this is Clarifying Crypto.
Gary Leland:
You didn't even know what I was talking about.
Erin Gregor:
I didn't even know. I'm not even used to my own name yet. That's okay. I'll get there. But, okay, so and here's why-
Gary Leland:
I'm pretty involved.
Erin Gregor:
You're pretty involved. Yes. And you host Bitcoin Boom. I know you have the podcast, but you host an event of the same name, Bitcoin Boom.
Gary Leland:
The Bitcoin Maximalist event. You can't even pay me to set up a table if you're saying I got something for another coin besides Bitcoin. You can't even come. I don't even want you there.
Erin Gregor:
Alright, so you know what you're talking about and we talked a little bit about before we hit record, you've been obviously talking about Bitcoin for a while, I took your advice not... We'll get into why I didn't get into it at the very beginning, but about a year and a half ago, I bought my first Bitcoin and just a bit more, I'm a seasoned investor too, although I just bought, that's all I did. But we were talking about this and doing this podcast, first of all, you're not a financial advisor, I'm not a financial advisor, we're not giving financial advice.
Gary Leland:
That's correct. I have a hard time giving any, I can't even give dating advice.
Erin Gregor:
Well, I don't know if you consider yourself an expert, but by no means am I.
Gary Leland:
No I don't. I know more than the average person.
Erin Gregor:
Okay. And I know about as much as the average person so what this is just me learning. Truly, I'm not trying to say I'm an expert, I'm not trying to say anything, I want to get more involved in this. This interests me and I know you and I have the same philosophy of podcasting.
Gary Leland:
Basically. Aaron, let's just tell everybody what happened. We were at a conference in San Antonio a few weeks ago, and you came up and we were talking about Bitcoin. I said, "Why don't we do a show and I'll teach you Bitcoin." And we've done podcasts separately and we've known each other a long time and we both respect each other and so we just decided to do a show together about Bitcoin. So if someone wants to... You know what? The show's really going to be good. I think Aaron it's for someone who wants to learn about Bitcoin because that's the way the Crypto Cousins Show started. I didn't know Bitcoin and my co-host did. There's a point where right now you're asking questions that a lot of people are asking and so if they follow this show starting with this episode, and if they stick with us week after week, they're going to progress as you progress. And I'll be progressing also, but they'll progress with us and by the time we get to episode 50, you're going to know a lot.
Erin Gregor:
Exactly.
Gary Leland:
And I think I told you that even then.
Erin Gregor:
Yeah. And I think where I have a lot of respect for you too, is that... Okay, so in 2017 is when you got into it. If you watched the history of Bitcoin, there was a huge rise in Bitcoin, very quick rise and everybody and there mom was an expert, everybody jumped in and then it crashed. And then, like I was telling you when I was doing the research for this, all of a sudden all those people that were praising Bitcoin disappeared. And you've really been there the whole time saying, "Yeah, we got a dip, it's okay, it's coming back, this is why."
Gary Leland:
And I added more shows during the dip. I went from one show to six and a daily show.
Erin Gregor:
Exactly. You all in it, you just continued to do your event. So we're going to get into all the details, but on a high level if I met you at an event or something and I said, "Alright, tell me the quick minute rah rah of Bitcoin or even crypto." Can you tell me why you're so excited about this and why you continue to stay all in even when so many people ran away from it?
Gary Leland:
Well, you got two kinds of people first of all that are in the crypto. You got people and 70% of the people who get into it just want to make some money. That's the only reason they're in it. And let's face it, whether they want to admit it or not, that's why they're into it. You have some people that are into it for the technology and the freedom that it brings to the world. And I'm assuming you me. You know me, I like making money and I'm the first person to say it. I'm not shy about saying, "I like making money." I think everybody should be honest about that.
Gary Leland:
But I also think the technology of it is what really amazed me. I was told about it probably when it was $100 by someone who had a machine going was mining and I was right there in his room and he's going there and it's obviously because yeah this is a Bitcoin mining machine. I'm like, "What's this?" Because that's like stocks. And I wasn't interested at all. I said, "I don't even mess with stocks. I get my money to a financial advisor who handles that for the most part," and left the room and I still know him today and he's been on my show a couple of times. But then I went and I was speaking at the Big Design, which is a conference here in Dallas and I was walking through the hallway and... You know Tony?
Erin Gregor:
Yeah.
Gary Leland:
Tony Cicala and Mitch Todd and a couple people were all around and Tony was talking to them and I just walked up because I knew all these people and I was listening to what Tony was telling them about Bitcoin. And I went and got through, but he told it in a different way. He wasn't telling it like it was a stock. He was telling them about it as though it's technology. And when he got through I said, "Wow, that's really interesting." And I knew about Bitcoin. I actually knew quite a bit about it, but I didn't know enough to be any more, I just knew it existed and I knew it was a currency. We spent all day talking and that's the history there, which you didn't ask for, but that's where I'm trying to go and get into that. But to me, Bitcoin is a technology that brings freedom to people.
Gary Leland:
A lot of people are unbanked in the world. Actually if you took the world and... You ever seen one of those pictures from the space shuttle or something, when they show the world at night and it's all lit up, if you were to do that, but change all those light bulbs and only had the lights on banks, all the banks were lit up in the world and it was rotating around and you were watching and it comes to North America and it would be just glowing. There're so many banks. Sometimes one on each corner.
Erin Gregor:
Yeah. Where we live, in the Dallas area.
Gary Leland:
But then you look down at South America and its darkness and you go to Africa and it's darkness, you go to Europe, it's pretty lit up again, you go to Australia, it's pretty lit. So a lot of the world people are unbanked because there are no banks. There just aren't, they have to travel 200 miles to get to a bank so now they have a bank on their phone. They can conduct business, they can buy and sell stuff, they can transfer money and that technology is what interested me. Just like the internet interested me when I first saw it in 96. When I started my first website it was the technology of it. I just wish they had computers when I was a kid in school. I had to wait till I was like 30.
Erin Gregor:
Yeah. So tell me though when everything lit up and you were had to know, okay, so you get in, it's going up. I know you didn't get in 100, 100 would've been even better, but you got in at low thousands right, initially?
Gary Leland:
Yeah.
Erin Gregor:
So everything starts going up. You're like, "Whoa. Best thing ever."
Gary Leland:
Came the prophet John. One of the disciples.
Erin Gregor:
Well, but what happened with everything crashed, what were your thoughts when that first crash, were you expecting it a little bit at this point, were you like, "Oh crap, what have I got myself into?"
Gary Leland:
I actually expected it to keep going. I didn't see any reason, but in hindsight, now I should've been hindsight it's 2020. But I learned a lot since then. So I was pretty comfortable and I actually wrote it down. I still have that Bitcoin that I watched go up and watched come down and I still have it and when it got to the bottom I bought more. And I bought because I owned part of the conference, podcast movement and when I received the money for that, I bought more and it turned out to be the bottom. And I just thought it was time. So I think that if you look over the history of Bitcoin, Bitcoin has been declared dead like 1,000 times.
Erin Gregor:
Really? I didn't know that.
Gary Leland:
Yeah. It's been like 1,000 times that it's been declared, "That's it. It's over. It's not coming back," by people who are intelligent people supposedly. And the same line that we've seen as far as rising, maybe in 2017 the hockey stick was a little more, but for the most part, that same rise has happened five times and dropped back down. For instance, these numbers aren't going to be exactly correct, I'm just using these as example, but maybe Bitcoin went from 50 cents to $35, then it dropped back down to a dollar, let's say. And then it went from that dollar to $125 and it dropped to $35. And then it went to 1,000 and it dropped the one 35.
Gary Leland:
And then it went to... When I got in, it had already gone up and back down again and it was down and it went back up again. What I'm saying though is every time Bitcoin's reached these new all-time highs compared to what it was, it's dropped. People sold, people thought, "I'm making a ton of money, I'm going to get out of this and make some money," and now you have, because it's on the CMV and things like that, people are shorting it like they would stocks. So there's a lot of things that happen and it drops, but every time that it's dropped for the last five times... It's taking me a long time to say this, isn't it?
Erin Gregor:
No, it's good.
Gary Leland:
When it goes up, it's gone up higher than before. It's never in history Bitcoin gone up and drop-
Erin Gregor:
And never came back.
Gary Leland:
It's gone up a little, it's always gone up higher than it did the time before. Actually I never had any concern on it going from... I had more of a concern... There was a point that it doubled while I had it and in Bitcoin cash came out, which is a whole another story, caused a whole another thing though and it dropped drastically over two, three-day period. And that's what I was getting that was the drop. I didn't want to get into Bitcoin cash and I was panicking, "Oh my gosh, I just put all this money in here and now it's dropping and it's almost what I put in and if it keeps going down, I'm going to be below what I put in," and I was calling people and they were going, "Oh, you're just going through your first drop, you'll get over it. Congratulations, you're on your first one." And they were right. Within a month it was back up and it went all the way to almost 19,000 I think, actually. So it's just a matter of once you ride through one of those, you're pretty comfortable.
Erin Gregor:
Yeah. Now, if there's one thing, I want to ask more about, but if there's one thing I've learned in the year and a half, so I've been watching it and what I just do, this is my strategy. Again, not a financial advisor giving advice, but my strategy is I watch it, do you know this is the hardest thing is to get emotional, especially when it starts going up and you're like, "Oh, I should put more money in while it's going up." But I've learned just to sit back, let it go up because that's good because that means my money's going up and then when there's a dip, I just buy more and I just watch every time it falls, like it's fallen when we were recording this. It was November 19th we were recording this, it's right around 8,000, I'm getting ready to buy a little bit more because-
Gary Leland:
Well, what a lot of people recommend is average price buying. And basically if you bought Bitcoin when it was $19,000, if you started buying then, the highest it's ever been, it's 8,000 today, right? If you started buying at 19,000 let's say you bought $100 every week, you've been doing that for two years, you're actually up right now.
Erin Gregor:
Oh, that's cool.
Gary Leland:
Yeah. So you're actually up because it dropped, down so low that that $100 you were buying, was it like 3,200, 3,300 now it's at eight. So that's a good way for people to do it whether it's once a month, once a week, whatever. Instead of throwing all their money in and saying, "Okay, I'm buying today, I got $100,000 or $10,000." Say, "Well, I'm going to buy some every week." And it's hard to really... I don't advise about it either, but I don't know anyone who's really lost a lot of money if they held at buying. Most people I know lost money sold it because you don't lose any money in Bitcoin till you cash out.
Erin Gregor:
I know. And that's where people get freaked out. And I'll tell you, this is advice in just investing. I had my own investment strategy and then I watched this Rich Dad, Poor Dad class, and he'd talk about the depths and you'd set the ceiling or the floor, and then if it'd go below the floor, it would automatically sell. I'm still bitter about this advice seven years, I don't even know how long it's been, but it still makes me bitter because I bought Tesla at $35 and I bought it and they're like, "Set the floor just in case." And so I set a floor and it dipped and I sold it all off, I never bought it again and then it went up to $250.
Gary Leland:
You wouldn't have sold it if it didn't happen automatically.
Erin Gregor:
I wouldn't have sold it, I just would've let it be and that's where I'm like, "Screw you out of your advice." So I've learned to live with the dips. But let me ask you this too, because when it comes to Bitcoin, there's been other currencies created out there, why has crypto, Bitcoin specifically, why has it had the longevity that it's had? Because I think this is important to understand, if I'm trying to get in and interested in this.
Gary Leland:
Compared to other cryptos or other currencies out there?
Erin Gregor:
Other currencies, because people have tried to create other currencies.
Gary Leland:
Until Bitcoin came out, you got to, understand anything you put it on your computer, you can duplicate. Anything on the internet, you can copy just about and duplicate. Bitcoin was the first thing on the internet you couldn't just make a copy of. And until then, if I sent you a currency and I said, "Hey, here's a Gary coin and it's worth a dollar," and you go, "Wow, thanks". You could just sit there and print them and go, "I'm going to make a million of these and I got $1 million."
Gary Leland:
That's what Bitcoin did. When Satoshi Nakamoto invented Bitcoin, he came up with the blockchain and that prevented people from duplicating the currency because that was always a problem in the past. So he didn't invent everything, he took a lot of thing from other people who'd been working on it for a while. But that was always the problem was you can duplicate the currency and then people, this guy's making and I make $2 and I give you one, and I gave one to Joe and I just doubled my money and so that's why Bitcoin took off. And a lot people go, "Well someone else can do this and it could become the currency."
Gary Leland:
But if you really think about it, let's use, Isaac Newton invented the gold standard, but you got to realize that's a long time ago. That's the same guy that invented gravity. That's a long time ago. Someone invented the gold standard must have been pretty smart because we used that up until the 1970s but gold as far as the gold standard goes, isn't the hardest mineral to find, it isn't the hardest mineral to mine, it isn't the most useful mineral, you can do a lot with it, but there're other things that worked better, but it was the first one and it got established.
Gary Leland:
So that's why the gold standard is much stronger even though no one uses it now, but that's why that's the standard everybody knows. That's why it's not a platinum standard or another standard and that's the way Bitcoin is. It's the first one, It's established in there, it's gone 10 years without being hacked, at 10 years it's still working. That's a long time. In 10 years a lot of smart people have been trying to figure out how to get in there and get some of that and no one's been able to do it. And it's understandable gain. If you think about 10 years, you realize the average lifespan of a Fiat currency I think is 23 years or 30 years.
Erin Gregor:
Really?
Gary Leland:
Yeah. That's the average lifespan. I could be off by, but I'm pretty close. It's not over 50 years for sure, but the average lifespan of a Fiat currency, and then people go, "Well, how about the U S dollar? It's been here a long time." Well, it hasn't been a Fiat currency until 1973 or 72. That's when it became a Fiat currency. So it probably is the longest Fiat currency that there is at the moment. And you know what's happening with it, the way we're printing it. So a lot of people are concerned about that.
Erin Gregor:
Well, and that's okay. Let's talk about.
Gary Leland:
I went to another subject.
Erin Gregor:
No, because I think as people are listening to this, they're wondering, "And here's how I look at it." So I like government, I don't like what's happening right now, but when it comes to certain things, I don't trust what's happening at all. So let's talk about healthcare. Listen, I'm happy there's hospitals around, I like doctors for when I need them, but I also am a very true believer of alternative healthcare, right? I think there's other avenues to things, I don't think it's all in one. When it comes to the money market, yes, there's a lot of people making money in the stock market right now, how it's continuing to go up is frightening, but a lot of people think they're safe-
Gary Leland:
Going up like Bitcoin did.
Erin Gregor:
But it's a little more frightening because it's like, "Where's the correction?" But can we talk a little bit about like, if somebody's going, "Okay, well I've got $1,000, right? So I can put it in an insured savings account or insured market account where yes, if the market goes down, I'm not insured for that money, but if somebody hacks in and steals it I'm at least secured." Can you talk about-
Gary Leland:
Someone robs the bank?
Erin Gregor:
Exactly.
Gary Leland:
Your money's in the bank, you're insured.
Erin Gregor:
Yes. So the false sense of security, if that's a better way to approach it as a question, but the false sense of security we may have by saying, "Well, the U S markets are good, we've got a lot of money," just with what's happening right now why you shouldn't get excited if interest rates get lowered, why you shouldn't get excited about money getting printed, but can you talk about the false sense of security people may have with money right now and why Bitcoin isn't such a bad option to look at?
Gary Leland:
One of the things with money, when we talk about a subject that are weird, for instance, the money is controlled by the FED and the FED is a private company owned by banks across the planet, It's not even like they're all U S banks. Most people think the FED is the government because you don't get your dollar bills printed by the FED, it doesn't say anywhere on it, it's made by a private company, looks like it's made by the U S government.
Erin Gregor:
Right. That's what we would think.
Gary Leland:
So it's made by a private company and controlled by a private company and Andrew Jackson, he killed the FED, a lot of people didn't want the FED, Thomas Jefferson didn't want the FED, Andrew Jackson killed the FED, keeps coming back. I had someone on my show about three weeks ago Congressional Dish is Served Show, we talked about FED. The FED controls our money to supply and the FED is tickled pink. They want your money to drop in value 2% every year. They say that, it's not a secret. They'll say "We're getting it at our controlled rate at what we're looking for and what we want is dropping only in value of an inflation rate of 2% per year." So they're tickled pink. If you lose $2 out of every $100 dollars per year.
Erin Gregor:
Do they make money if you lose money? Is that what it is?
Gary Leland:
No. They think it stimulates the economy by having inflation for some reason, but since it's not based on the dollar, it's not based on gold or anything, it's just based on whatever the FED basically is telling us it's worth and that's what they want to keep inflation at is 2%, which is not good. If you take the value of a dollar and the FED came out, and I'm going to be wrong with my year here, but the FED came out in, maybe 1915 or something, it hadn't been around forever, the FED as we know it today, if you take the value of a dollar and say, "Okay, that dollar in..." I'm going to use 1910 as the date.
Gary Leland:
Let's say that dollar was worth a dollar, and so it's been 100 years basically, now that dollar's worth two cents. That's how much the value of the dollar dropped at that 2% every year. And that's when they weren't printing. What I tell people is... I did this math the other day, when I was a kid, I could buy a Coke in a bottle in a machine for six cents and I'm 65 for anyone listening. And if you take that math, how much that Coke went up from six cents to $2 now let's say, we use that same math, my grandkids are going to pay $150 for a Coke if it only stays the same that it had in my lifetime, but in my lifetime it was backed by gold for the first third of my life where it hasn't been backed by gold for most peoples' lives and there was no quantitative easing, printing billions and billions dollars. So I'd think instead of that Coke costing $150 it's probably going to be, and I'm not a mathematician, but I can see where it could be $250 for a Coke for my grandkids.
Erin Gregor:
It's crazy.
Gary Leland:
So you don't want to save your money, right? And I think that's the goal of inflation. You don't want to save your money because it's going to be worth less so you want to spend it. You can either get something for it and that stimulates the economy. And that's what you were asking earlier. I think that's the whole objective. You save your money 100 years, you're giving your kids nothing.
Erin Gregor:
Well, and how do you convince someone who says, "Okay, well, alright, I get, I don't want a savings account or under the mattress because that is bad, but if I look at the stock market or a good mix of stocks and bonds on average, I can get a 10% increase of my money." Why would I take that guarantee... And I'm using air quotes for those who can't see, why would I take that guarantee and then not take that guarantee actually and throw it in some Bitcoin, some people may think that's silly.
Gary Leland:
Yeah. And like you said earlier, we're not financial advisors and we're not trying to give financial advice, I'm giving information that I've read.
Erin Gregor:
Right. No. 100%.
Gary Leland:
And I read an article that made a lot of sense to me on that, if you take your statement you get every month from your retirement funds, your IRAs, if you keep your money with TD Ameritrade, they send you a statement every month, "Let me show you what your money did. Oh, this did this, it's worth this much this month." If your value of your portfolio went down 1%, you wouldn't have a heart attack, you won't go, "Oh my gosh, I lost 1% this month, I'm going to die." You just wouldn't-
Erin Gregor:
Probably wouldn't even notice it. Yeah.
Gary Leland:
Yeah. So this article I read, their thoughts were you should put 1% of your investments into Bitcoin. And the worst case scenario is that it could go down to nothing. But we just admitted, you wouldn't have a heart attack about it, but it probably wouldn't go down to nothing. And you'll probably get out before it went down to nothing. But you do have a chance that it could go up 10, 20 fold, instead of 10%. So your gains may outweigh your risks in that case because there's a ton of people who think, "We're going to see $20,000, $25,000 in two years." And there's a lot of people that think, "We're going to see $100,000 within two or three years." So if you put 1% of your wealth into it and they're right, you made a butt load of money, if they're wrong, well, you lost 1%.
Erin Gregor:
Or even if they're halfway right, you still made a butt load of money.
Gary Leland:
Yeah. So that's the deal. And everyone you ever talk to that does talk about financial advising says you should never put more than you can afford to lose in it anyway.
Erin Gregor:
Exactly. Same with the stock market. You shouldn't be expecting to walk away.
Gary Leland:
I know people selling their houses to buy Bitcoin.
Erin Gregor:
So yeah. And talking about where I really got turned off from Bitcoin was, so it's at 2017 when I heard people just, okay, there's that like refinancing or selling their houses to pop everything in Bitcoin and for me, again, I don't know, I guess we're talking investing, even though I'm not an investor. So I've been investing in things for 20 years, whether it's real estate businesses stocks, whatever. And I was in Arizona during 2004, you'd literally would buy a house, you'd put money down on a house to get built and buy like a $200,000 house too, we're not even talking to expensive houses, but you put that money down, by the time it was built, nine months later you'd walk away with $100,000 profit. It was insane.
Gary Leland:
That's insane.
Erin Gregor:
It was insane. And of course, obviously that didn't last.
Gary Leland:
It was that bubble again?
Erin Gregor:
It was that bubble. So I remember Robert Kiyosaki, Rich Dad Poor Dad, author, he was living in Fountain Hills and everybody's like, "Oh, you buying this real estate?" Everybody's overextending and buying. And he's like... I'm paraphrasing, but basically his advice was, "When everybody's jumping in, stay out. When you can't lose, get back."
Gary Leland:
That's like Warren Buffet says, "When there's blood in the streets, you start buying."
Erin Gregor:
Yes, exactly.
Gary Leland:
It's the same principle, but from the other end.
Erin Gregor:
Exact same principle. So when everybody was jumping in Bitcoin at 2017 and all these people buy a quarter of a percentage of Bitcoin and then there're the expert, you know what I mean? We saw so many of these, it just turned me off. As a woman, it was a very bro type atmosphere.
Gary Leland:
It is. Bitcoin is a male thing for the most part, for some reason, and I don't want to [crosstalk 00:28:49], but it is, there's a lot of men in it compared to women.
Erin Gregor:
And I think there's a whole technical perspective which makes it. You've got the coding and the blockchain all of that. Which I think there's that, but I think it just was this whole... You had a lot of people talking about it that shouldn't have been talking about it.
Gary Leland:
For sure. And they aren't talking about it now because price dropped.
Erin Gregor:
Exactly. And I think that's where my turn-off was.
Gary Leland:
Here's a funny story, you were talking about people buying high last year... Earlier this year we were in San Francisco, my wife and I was at a conference and she doesn't care to go to conferences but she likes to come with me and we go a couple of days earlier and we went to the Redwood Forest and we do events and I go to my conferences and she wakes me up at three in the morning one night, actually wakes me up, I'm sound asleep and goes, "Gary, Bitcoin's $14,000 we need to buy some." And then she goes, "It's 14,000. It's going go through the roof. We need to buy some." I said, "I'm not getting up out of bed in the middle of the night to buy Bitcoin."
Erin Gregor:
You're like, "Sell the house."
Gary Leland:
I can tell you that's a tip I'm going to give everyone. Don't get up in the middle of the night to buy Bitcoin. Just don't do it.
Erin Gregor:
Nothing good happens at three in the morning.
Gary Leland:
You've been up for 10 minutes.
Erin Gregor:
Ever. I think the general rule-
Gary Leland:
And people do that though. They get FOMO, the fear of missing out. That's a term. FOMO. They're scared they're going to miss out on something and they buy in and drive it higher. She definitely gets that though.
Erin Gregor:
No, it's hard. Like I said, the biggest thing too is taking the emotion out of it like, "I don't care, whatever, but we can talk." Let's go into the bro side of things just a little bit here before we finish this up, because you sent me a great article. It was from the Bitcoinist about a woman named Jessica Hussman, I guess we say her name, but it was about basically if a guy starts talking about Bitcoin on the first date, run and about how women hate Bitcoin. And I know when you and I talked, I'm like, "Oh, I want to try to get more women involved in this side because it's an interesting world."
Gary Leland:
That was a weird article, don't you think?
Erin Gregor:
You and I were talking about this before, but it was basically, "Well, they're trying to get more women involved, so we're going to create a wallet and we'll do a whole episode on wallet to describe us, but we're going to create a wallet where there's no setup," and it's like, "Okay, women aren't stupid. Okay. It's not that I don't know how to set up a wallet, It's just a matter of I have 50 things on my plate. Is setting up a wallet important enough for me to take the time to figure out," right? We're not stupid, but we just saw all these really stupid people or people acting stupidly, I should say in 2017 preaching this and I think we're smart and so we're a little hesitant to say, "Is this something I should even look into?" I'm happily married so I don't have to worry about... And my husband's not in Bitcoin.
Gary Leland:
So am I.
Erin Gregor:
Yeah. So we don't have to worry about-
Gary Leland:
I've been married 34 years.
Erin Gregor:
So we don't have to worry about dating and having a guy talk Bitcoin, but I don't think women are as turned-off by it, but I think, to me it seems we need the right people being evangelists for Bitcoin to really describe it well and not just say, "Oh, you should invest in it because I just bought some and you can't lose," because that's horrible advice.
Gary Leland:
But I think that's a natural tendency for people to get excited about it because they see the stuff happening on it and then they still want to maybe become a disciple and he likes something and you think it's good news, just like religion, brightened his faith, so it's got a lot of things in common with religion or a cult, to be honest with you.
Erin Gregor:
I get your point, I just feel like you should have some substance behind it. If I were to go back to-
Gary Leland:
I'm not disagreeing with you, I'm just saying.
Erin Gregor:
I know. If you were to go back to those 2017 evangelists who aren't around anymore and were to really say, "Okay, why should I have invested in Bitcoin or whatever?" Was it just because it was going up rapidly or did they really understand?
Gary Leland:
No. I saw a show. This was a great show the guy was one of the biggest and he's in trouble with the government right now, I think. One of the biggest evangelists for Bitconnect, which was a scam that was out in 2017, you might not even be familiar with this, but it was a multi marketing thing for Bitcoin called... It wasn't for Bitcoin, it was for Bitconnect, another coin. And he was doing a show and on YouTube live and the guy said, "What's the difference between a private key and a public key?" Which is a pretty basic thing once you know this. And he's going, "I don't know what the differences is."
Gary Leland:
And he's one of the biggest people on air and he's going, "I don't know what the difference is." I'm like, "Really dude, that's like what's your email address and what's your email password. You'd give out your email address but you wouldn't give out your email password." So there were a lot of people who didn't know, but they were just in it for the money and that's what you were getting at there. So there were a lot of people who... And he's not around anymore and a lot of those people aren't making money and they're not around, but they'll come back.
Erin Gregor:
Yeah. I was going to say, what do you think it's so male-driven?
Gary Leland:
I don't know why it's so male-driven. It is male-driven though.
Erin Gregor:
It is.
Gary Leland:
And I'm not saying it should be, and I'm not knocking, I'm just saying it's the way it is.
Erin Gregor:
It is. Exactly.
Gary Leland:
Last year on Bit Block Boom I had 100 men I asked to speak and not one woman.
Erin Gregor:
That's crazy.
Gary Leland:
And don't get me wrong, I'm a big believer that women are superior to men in a lot of situations, maybe all of them. It's clear to me, at least. But I'm not going to give a woman any slack for being a woman. I'm not going to say, "You're a woman, I got to give you some slack and I got to come hunt your ass down, couldn't get you to speak," you know what I mean? If you want to speak, you're stronger than me, probably you can just ask. So I had no women speakers in my conference, I took some slack over that. But that's just the way I am. Now this year I've got one so far, she asked to speak. All you got to do is ask. Pretty much and be a Bitcoin Maximalist and they can speak at my event. How many women were at my event?
Erin Gregor:
Three, four.
Gary Leland:
And I think I gave them tickets out of 125 people and I didn't have anything up there, "Saying men only could come," and they didn't know when the tickets were going on sale, you didn't know that it was going to be all men there. You had no idea. So it wasn't like they were going, "I'm not going to that, it's just guys." So I don't know, but true it is. Not sure why it is except maybe women, because they grow up having to take care of their husbands and their kids, most of them and so since they're used to being caregivers so much and having to watch your husband throw their money away, a lot of them, on shooting pool or drinking beer, you don't see a lot of women doing that. "You went out and drank beer all damn that night and here you'll hangover, you can't go to work." You don't hear that on the other hand so maybe because of the environment, they're a little more suspicious of throwing their money into something.
Erin Gregor:
Yeah.
Gary Leland:
Maybe, I don't know though.
Erin Gregor:
Well, and I think there are more technical components to it and that's where my interest is too and you and I have talked about this, it's like, "Okay, well to..." Again, I'm using air quotes a lot, but like, "To get into Bitcoin, do I have to mine, do I have to code blockchain," do you know what I mean? All of these different components. Not that women can't code, that's not what I'm saying, but if you were to line up all the women in the world, the majority of them aren't going to be into coding. That's just the way it is. I can't give you numbers, but I'd be safe to-
Gary Leland:
There are a lot more men than women.
Erin Gregor:
Yeah, exactly.
Gary Leland:
It's a fact, they can't do it, it's just not as appealing.
Erin Gregor:
Yeah. And for me it was like there's just so many and it's gotten a lot easier, but there were just so many steps to it, "Okay, where do I invest? Is coinbase the best?" And then, "Oh and then I have to take that and I have to put in a lot." I'm shooting you a thousand questions, right? So because of this and to me in my world, it's not that I can't, again, it's like, "Is this worth me figuring it out or should I just put it into the safe bet of a stock market and enroll that way versus really taking the steps?" And I think that's where we just really figuring out-
Gary Leland:
It's where you have to figure out what you're going to go with.
Erin Gregor:
Exactly. What it's worth. Can I... Oh, go ahead.
Gary Leland:
No, you go ahead. I'm just rambling.
Erin Gregor:
Well, I was just going to ask to that difference of the ease, can you talk a little bit... You've been doing this for two years, which your statement it's beyond dog years. A year in Bitcoin is like 10 years in real life-
Gary Leland:
Dog years is seven years, I think Bitcoin's 10 years.
Erin Gregor:
Exactly. So how has it changed from the ease of use and mange streaming of being able to use this? How has it changed in those two years since you've been into it?
Gary Leland:
I don't think it's changed enough from the front end, you'd see it. A lot of things change. Now we have Lightning and I'm running at my facility here, two Lightning nodes that I couldn't have even thought about setting up because Lightning wasn't out. But I think that's one of the big things that's really going to make a difference in Bitcoin is Lightning and Satoshi's. This is going to take a second, but I'll try-
Erin Gregor:
Yeah, I was going to say please explain those because I think we can assume a lot of people-
Gary Leland:
Lightning is an overlying layer on Bitcoin. It's like you have the internet and then you have FTTP and you have Secure Networks and you have Email, you have all these layers on the internet. They all weren't there when they built the internet, these things have been built and now they're building layers on Bitcoin Network and Lightning is out. Now Lightning transfers Bitcoin, but it really seems to be transferring it in Satoshis. Now Bitcoin can be divided up into 100 millionth of a thing and the smallest 100 millionth of a Bitcoin is called a sat or a Satoshi in honor of the person who made it, Satoshi Nakamoto.
Gary Leland:
It's a sat. So right now a dollar has maybe a thousand sats. Just give you a little math there to go. Okay. So the problem with Bitcoin for most people now you've got that part, now I'm going to jump over here. Problem with a lot of people in Bitcoin is people can't do fractions. They just can't. The average person, they come to work for me and my retail store and my question I ask people was, "What's a third of 100?" Because if they can't do a third of 100, I don't want them counting my money, you know what I mean? Nine out of 10 people will go, "Here's my answer." Nine out of 10 people will tell me when I ask what a third of 100 is, and I'm not trying to be mean, and to any listener who doesn't know this, but they go, "I don't know, math wasn't my best subject."
Erin Gregor:
Shut up. They don't know what a third of 100-
Gary Leland:
And I always go, "Did you take it?" That's my joke. I always say," Did you take it at all?" And believe me, it's way more common than you... Someone told me that 20 years ago and I said, "Well that's crazy talk because now I'll ask all my employees," then he goes, "Ask an employee and see when you're hiring them." So I started asking them and I was like, "Oh my gosh." And I still ask it 20 years later because it's so true. So if you can't tell me what a third of a 100 is, okay, now we know where people's math is at, okay?
Gary Leland:
The average person. Now people we hang out with could, but I'm just talking the average person that gets out of high school. Now I tell you, to buy this item from me, you have to pay me 0.0000016202 Bitcoin. Kid's going to be looking like a sheep in the headlights, a deer in the headlights. But you tell me want to buy that same shirt and I say, "This shirt is 50,000 sats," you go, "Oh, okay." Even though it sounds out of proportion, something 50,000 but if you know a sat's worth let's say a dollar, 50 thousands sats, that'd be a lot of money.
Erin Gregor:
It's a nice shirt, let's just put it-
Gary Leland:
It's a really nice shirt. This is a super nice shirt. But sats are easier math for people to do than fractions of a Bitcoin. And I think that's the biggest thing that's happening right now is that you can buy stuff with sats and once you get to math in your head, you can look at the stats and you go, "That's $5 that's $10," because you know the conversion, if you're doing it enough. It's like you go to Japan, stuff costs a ton of money in Japanese money, so it's not that unusual. But that's the problem I think with Bitcoin and that's the biggest thing I've seen taken care of is the Lightning Network and now you can buy with sats. I got to buy stuff from someone today and he asked for sats. So that's pretty common now. If someone else said he owed me five dollars said, "Can I just pay in sats?" So it's pretty common now.
Erin Gregor:
So have you found it's easier to spend Bitcoin too in the past two years or has that not changed?
Gary Leland:
Well, I really don't try to spend Bitcoin.
Erin Gregor:
That's why I don't look at it. Yeah.
Gary Leland:
So when they asked me if I could pay them in sats, I say," Hey can I pay in Fiat? I'd rather keep my crypto. And then there's some people go, "Well, you should help the Bitcoin Network and you should spend Bitcoin if you bought something for $50, spend $50 worth of Bitcoin on it, and then replenish your Bitcoin." But I said, "But then you're paying the exchange fee so you'll lose the money, that's a crazy idea" I'm going to pay this and then go buy more of it and lose money on the exchange fee because who'll sell Bitcoin or just selling it because they love you. They're making this exchange fee just like selling and buying a stock. So I really don't like to sell my Bitcoin. And then when you sell your Bitcoin, that's when you got to pay your taxes.
Erin Gregor:
Exactly.
Gary Leland:
So if you bought that Bitcoin for $10,000 and it's worth 20 and you sell some of it, you technically got to pay income taxes on it.
Erin Gregor:
How does that work though, if I'm selling it via a purchase versus... This could be a-
Gary Leland:
There're software programs for this and it's first in, first out.
Erin Gregor:
If I bought some at 7,500 then bought some at 3,500 and I sell some-
Gary Leland:
Well, actually, it's going to be going up is the principle. If you bought some at 3,500 and then bought some at 10,000 and then you bought a shirt, the same shirt for this, I like expensive shirts, you bought the same shirt for $10,100 you can't go, "Well I just bought that Bitcoin for 10,000 so I only made $100," I didn't make any money really [crosstalk] $3,500 Bitcoin and you made $6,500 profit that you got to clear.
Erin Gregor:
Yeah. That starts getting really complicated, doesn't it?
Gary Leland:
It's complicated. So the government needs to do something with that and there're a lot of people in Congress and stuff that own Bitcoin, so they really need to address that because this is a nightmare. You can't go in and buy a cup of coffee at Starbucks with Bitcoin and go, "Okay, I just bought a cup of coffee for $5, what was the oldest Bitcoin?" I've got a Bitcoin here, I bought for $3,200, I've spent $5 of it, that's a bookkeeping nightmare.
Erin Gregor:
Yeah. Because you're not going to do that. If let's say I go to Mexico and I exchange money and then my money ends up becoming worth a lot more. That's all just good news to me, right? I'm not having to pay any taxes anywhere on that money.
Gary Leland:
Well, in that case scenario it is, but if you were sitting here and you said, "I'm going to invest in foreign currencies and you bought one million dollars worth of pesos and it went up and you sold it, you'd be paying, but not in your scenario. No one would know you as long as you're not coming back over the border with $10,000 because that's where you've got to claim it at as $10,000. That's another thing. Now listen, $10,000, so if I go out the country with my phone saying I do, but I might have $15,000 on my phone if Bitcoin had a great run. So do I got to stop and go, "Oh, I got 15 I can't leave with my phone," because technically that would be breaking law. So I imagine when Bitcoin hit $19,000 there was a lot of people coming in and out of the country with more than $10,000 on their computers and phones. That technically that's against the law.
Erin Gregor:
Yeah. I'm not carrying around $20,000 on my phone especially going overseas, that's scary. Okay, Alright, so that means I still have a ton more questions. We can wrap it up for this one because I know we're running out of time. Gary once again-
Gary Leland:
I like how we're doing this show. We're just talking.
Erin Gregor:
This is how I like to do shows where it's not like-
Gary Leland:
And it's great. I haven't done a show like this before, so I'm really enjoying this and I want to make sure everybody knows before we go, I'm not like sitting here being a prophet, I'm just talking and don't take my advice for anything. If you do, you're an idiot.
Erin Gregor:
I'm pro people figuring it out themselves, research yourself, I'm not saying because you listened to this podcast, go buy 20 Bitcoin. Because I love investing, I love learning about new things and that's what I'm trying to figure out. So we'll have everything on our notes page over @clarifyingcrypto.com but Gary, give a couple of places again where people can go to find you to find more about your stuff, a couple of good places for them-
Gary Leland:
To find my main hub for crypto is cryptopodcastsor.com but my page is Garyleland.com that's where you can find out about me. If you want to learn about Bitcoin, you should subscribe to four Minute Crypto. It's on Alexa, it's on Amazon, it's on Pandora, it's on Spotify, it's everywhere. Just four Minute Crypto and that's really one new story every day in four minutes or less. I want to make sure, since this is our opening episode, everything I'm saying, I've read somewhere because I read a lot of content so I may not be able to consume all of it and tell you where I've got it at, but it's not like I'm just making stuff up. Someone much smarter than me wrote a lot of the information I have in my mind. I can remember information, I just don't remember where I got it at.
Erin Gregor:
Yeah. Do you have any favorite, obviously they should go to your stuff if they want to learn, but do you have any other favorite places you like to hang out on the internet to learn about crypto?
Gary Leland:
I consume a ton of podcasts and I like Tales from the Crypt, it's a great podcast.
Erin Gregor:
It's a great name.
Gary Leland:
Yeah, it's a great podcast. And it might be heavy for someone who's just starting though because they really are technical, I guess now I'm born to technical stuff so it might be... But if you're into Bitcoin and you got the concept down, you want to understand, find out, they're great. That's a great show. The two guys from that were on that panel at the end. They did Four People Show, that was their show and they get drunk on that show. It's really funny sometimes because whoever comes brings a bottle of liquor and they do it live, but they talk about good stuff.
Erin Gregor:
Very cool.
Gary Leland:
I wouldn't do that. I wouldn't be hosting that podcast, but-
Erin Gregor:
I've teamed myself up on that side. So when's your next event too? Is it next year?
Gary Leland:
Yeah, August, 2020.
Erin Gregor:
Okay.
Gary Leland:
So I'll tell you a good event and you should consider going to this one. I just got through interviewing one of the guys from it is Bitcoin 2020. And I think it's in March and the link is, I'll give that up, bitcoin2020conference.com. That is a great conference.
Erin Gregor:
And where is that?
Gary Leland:
It's in San Francisco.
Erin Gregor:
Okay. That's the one you were talking about last year, that you went to last year, right, that you liked?
Gary Leland:
I liked it a lot. I'm definitely going back to that again. So I'd recommend that someone wants to go, that's a crypto conference... They're thinking they may have 3,500 people there this year. It's a big conference.
Erin Gregor:
And again I was just going to say another good one too because there was a lot of conferences that came around, everybody had a Bitcoin conference and now those have gone away and so the ones that are sticking around definitely peak my interest more than the fly-by-night ones that may pop up here.
Gary Leland:
When it was going up, there was one every weekend somewhere. And now there're not that many, but the ones that are here are good. But then again, if I'm going to tell you about a conference that's going to probably be a Bitcoin conference, because I'm not into the other coins.
Erin Gregor:
I know we've got to wrap this up, but it really cracks me up about this because it's not like Bitcoin's down to $80, it's still hovering. Like right now it's down and it's $8,000 yet-
Gary Leland:
When someone says Bitcoin's down, you can go, "Is it under 3,500? That's what I bought at in March."
Erin Gregor:
Exactly, but it's like, "Oh, well," Like when we talked about how all these people bowed out, it was at like you said at 14,000 in May.
Gary Leland:
Another thing I think that we should really make sure people know if we're giving them any advice, because this is like our starting show is, and a lot of people don't know this fact because I hear this a lot, Bitcoin may be $8,000 and something today, but you don't have to buy a whole Bitcoin. You can buy half a Bitcoin, a quarter of a Bitcoin, a thousandth of a Bitcoin, you can buy $5 worth of Bitcoin.
Erin Gregor:
Exactly, I was going to say $100 worth of Bitcoin.
Gary Leland:
Because I run into people all the time they go, "Oh, wow. It's just too high. I don't have $8,000 laying around." Well you don't have to have $8,000 now.
Erin Gregor:
I've been testing out different brokerages to buy that coin. And I think on one, I have like 0.0026 just on one of them it goes up and down when Bitcoin does so it's-
Gary Leland:
I counted $25 worth Bitcoin the other day, Helena, something, I didn't know what was on there, so I was like, "Oh well let's get this off of here." So I probably have some more somewhere, I think it was an affiliate for exchange or something that I had signed up to. So yeah. So you don't have to buy a whole Bitcoin to get into Bitcoin but start following it first and get a little bit. And the other thing that's good advice for people I think is to maybe buy if they can afford it, buy $100 worth of Bitcoin and watch it because they certainly probably aren't going to go, "Oh my gosh, I've lost everything I own because I lost $100." [crosstalk 00:51:20]and you've got some skin in the game, you're more apt to keep up with what's going on and to watch it and you see it go up and down. So when you really start getting into it, you got a grasp on it.
Erin Gregor:
Yeah. I should've called you the first time because I bought it at 7,500 and then it went down to 35 and I'm kicking myself that I didn't buy more because-
Gary Leland:
I bought at that last time was 35.
Erin Gregor:
Yeah. It was like a year ago, I don't remember, but right around. But I was like, "Oh, God, did I make a mistake?" And then it went up. I'm like, "Damn it, why didn't I buy more at 3,500?"
Gary Leland:
But then that's the thing, people like to buy high and sell low. That's what most people do. They by high and sell low.
Erin Gregor:
Yeah. I didn't sell. Yeah, I held it.
Gary Leland:
Good for you.
Erin Gregor:
Just should've bought a lot more. But I learned my lesson.
Gary Leland:
Just huddle.
Erin Gregor:
That's exactly. Well, Gary, thank you so much for doing this, we'll back another week. I have 50 more topics to talk about, so.
Gary Leland:
But if you want to learn about Bitcoin, stick with us and we'll teach something. You'll know something when you get through, right?
Erin Gregor:
Yeah. I've already learned a lot on this one, so definitely be watching it. Alright, Gary, thank you so much.
Gary Leland:
Thanks.
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