Confounded
A high energy podcast with its own video channel featuring interviews with amazing people who have overcome adversity and life’s challenges to be successful in unique and wonderful ways.
Confounded
WTF is Bitcoin? Mitch Eccles explains.
Need to understand more about Bitcoin?
Meet Mitch Eccles, a man on a mission to cut through the jargon and help us mere mortals understand it. Even for technical people, understanding cryptocurrencies can be a headache. Mitch will make this daunting process easy by guiding and teaching you so you gain confidence in using cryptocurrencies.
He has years of experience and a deep understanding of Bitcoin and how it works. Listen up to hear how it works, and I promise we cut the jargon and also dig into the murky depths of the Bitcoin conspiracy theories. Bitcoin is breaking the requirement for fiat currencies and democratising financial transactions.
We discuss, amongst many other things, how Bitcoin can empower women in Saudi Arabia, how it helped Venezuelans protect their money from hyperinflation, how to start buying Bitcoins, and how Mitch almost missed out on Bitcoin in the early days.
The YouTube video he mentions as a good primer on how the economy works is found at https://youtu.be/PHe0bXAIuk0
Hi and welcome to Confiner TV. Finally I've managed to get these episodes edited and so now we're sort of losing one after the other, after the other after the other of some really interesting people. We have Mitch Eccles. He's a Bitcoin expert. He's been around the Bitcoin space forever and if you're like me, you might struggle with understanding how the thing works and has a real financial value compared to like real money. And then we have got Tom Wood from Kazana. He's raised loads of money. He's built a fantastic business short period of time. He also bought Car and Classic, which I've got direct experience of using, and he's got a really fantastic story to tell.
Speaker 1:Then we have Peter Crawford and Dan Blatchford, who came on before in the first episode as very kindly to help me test the sort of founder process. They've actually now launched their website, sip Champaigne's. It's fantastic and their story is brilliant, and they're a pair of characters, those two. We have Catherine Wright, who's the CEO of DiscountVergerscouk but is pivoting nicely into a new startup called Upside which actually gives you direct benefits from using your bank account. For all that we've got, we'll have Mads Hansen from Acceptee, probably one of the only APIs to tie into all the different financial lenders and a really interesting story about how he can help lots of businesses actually get finance and credit to their users. And then this week I'll be interviewing Jason Stokes from E-Side Company, probably one of the UK's best Shopify developer houses Again, a superb story and, of course, with the changes that are happening in e-commerce right now, it makes for a really interesting time. And then I'll have Rich Seron Joggi, who's been to Y Combinator the only person I've met has been to Y Combinator and he'll be telling us about business score.
Speaker 1:So there's a few interesting episodes coming up. They're all almost finished editing now and this episode we have Mitch Eccles. So Mitch is a Bitcoin expert. I worked with Mitch for a short period of time and he was the head of AI at a business we both I was consulting at Fascinating guys, super smart and we're going to cover, often in terms of Bitcoin, what it really is. So I don't really understand that well, to be quite honest, but it is fascinating and we're going to talk about how the economic machine works.
Speaker 1:And then he's going to talk through his crypto coaching program, which is quite interesting. So if you're a bit of a little bit like me, he can actually help you get started and we cover a wide range of topics how he missed Bitcoin in the early days, how he was going to program it into his PS4, and then just gave it up because it's just another internet thing. And then we talk about how it can actually offer freedom to a whole range of people, from women being able to open bank accounts in Saudi Arabia sorry, not being able to open bank accounts in Saudi Arabia and now, of course, can use this for financial freedom. How it's working in Venezuela. People can remove the money from the system despite hyperinflation.
Speaker 1:And then he talks roughly through some of the scams and how to buy it, and also there's some tax implications in there. He also has a great website which he talks about. So if you want to know more about Bitcoin, it's a bit of a long one. It's a wide ranging and quite long conversation, but it is absolutely fascinating if you're into that subject. So, with no further ado, we'll move on to say hello to Mitch. Hi, mitch, welcome to Confounded TV. Hi Alastair.
Speaker 1:I think, just for the listeners, viewers, we should be clear. We actually know each other going back a while. We've worked together in the past and I think your interest in Bitcoin if you can explain it to me in the audience, would be super helpful. So it's a bit of background. I would love to understand Bitcoin, I'd love to buy some, I'd love to understand it, I'd love to know how it works. I, despite being, I think, relatively bright, really struggle with it and I've noticed that developers especially love it, which suggests to me it's highly complex, highly difficult and therefore I'll just keep walking away from it every single time. So perhaps do you want to do a bit of background as to your background and then when you get into Bitcoin, and then we could maybe talk to like an idiot's guide for me and maybe some of the listeners, and then maybe go into a bit more detail for some people who actually understand it a bit better.
Speaker 2:Yeah, cool. So my background has pretty much always been in tech. So ever since I was sort of a teenager, I got into building computers, I got into writing software and it just seemed like a natural career for me to then find a way to make money from writing software. So I went to university and I did a degree in computer science.
Speaker 1:And how long goes it? I presume this isn't like it, I mean this is going back. Cool. When I started university, so not very long ago then, not that.
Speaker 2:But it's interesting. So I did really well at university and then they offered me a PhD, which I had no intention of doing a PhD when I first started university, but I did, and this is in 2008. And this was when the whole financial crisis was going on. You know, when you swing all the banks, when it gets up and shit, I'm all right to swear on here, yeah.
Speaker 1:Your find is the only thing not to make is feel fun to make in the sea where it's here.
Speaker 2:I can promise none of that. And so yeah, within the first year of my PhD, actually Bitcoin got released 2009, 2009, now, yeah, so I'm in a room full of smart people and it was just natural that it sort of started to come up in conversation and we were like, oh, we should just mine some of this stuff on the university network. And in fact, in those days, you could actually you could get a PlayStation three, you can install some software on it and you could use the hardware on the PlayStation to mine Bitcoin.
Speaker 1:Now if I'm not wrong, that's because back in the day, a graphics card processor was more efficient at mining than a normal processor, or something like that.
Speaker 2:Yeah, exactly, it was more efficient to mine on a graphics card standard computer processor, and so the sad thing about this is we actually never did it it was just one of those. Oh, how amazing would it be if we just got a PlayStation and use the university network to mine some Bitcoin, Just think of the Lamborghinis you don't have. Exactly, man, I could. I could be a multi-millionaire by now and not even be here talking to you out. So yes, silver lining, silver lining, we can have this conversation.
Speaker 1:I tell you an interesting bit of that. So at that point I had just started coming to check and I moved off the drop zone right when I was actually started building it into a little office and not a good one recruited two guys one, actually one guy, initially straight out of university. He literally left must be 2010. Same time as you were talking, he was one of you and he came to work for me and we had I bought it because at the time I didn't have any kids in the office we all had computers you could play Call of Duty on, obviously because that was more important than credit reports. And then so he said to me do you mind if I use these computers at night? It won't cost you very much. Now, just to, and I'll just give you a. Buy a drink. I was like, well, what for? And he said, oh, it's for Bitcoin. Yeah, like what the hell is this?
Speaker 1:And then he started off and there's rant about libertarian. He's a lovely guy, tom, if you're listening. He's a libertarian currency, three of banks and other shit that people say it is. You're going to explain the bit. And he ran anyway, he ran it all. And then he got some Bitcoin and he got me three Bitcoin, three, three Bitcoin, which must have cost about what five pence or something back then, not even that. And then we put them in Mad Gox.
Speaker 2:Oh no.
Speaker 1:So, they got hacked and elapsed, yeah, and if I'd believed him or believed, and I didn't believe in him, I just thought this was a bunch. I'll tell you why and we'll come back to this. He said it's really easy Go here I can't remember it was and register and do it. And this is before. You could hold up a bit of paper and all that jazz and verify, go here, register, do all these things and you get some Bitcoin notes. And I went to try and go through this process and I wrote an hour in and I literally just threw my mouse down. I was like I give up, I cannot do this. It's too complicated and because it's too complicated, it's never going to get mass adoption. This stuff is worth jack shit. And then I gave up and let him do it.
Speaker 2:Well, yeah, there's a couple of lessons in there, and one of the biggest ones is never leave your crypto in an exchange. It's not your keys, not your crypto and that basically means get your Bitcoin into a wallet that you control. But we can get more into that, let's play it. So back to the Bitcoin story, is that? Yeah? So after that initial hype around trying to do it on the PlayStation, I forgot about it. I was too busy with my PhD and Dora was just a magic internet menu. Who the hell thinks?
Speaker 1:about this Right For those of us, especially when you're very active in LinkedIn, there's a lot of people tell you how it's the future of currency. So we go back to a starting point and you were saying you find it really hard to do and to get onto. Let's assume that can all be fixed and everyone can use it. How does it replace? What is the difference between that and what's a fiat currency or a real currency? Some of us would see it.
Speaker 2:So I think this gets into it's a little bit politics and I'll try and stay light in the politics, right it's fundamentally technically different?
Speaker 1:Yeah, no, why is it technically different? So yeah, central bank issues dollars or pounds. That makes sense.
Speaker 2:Oh, so, but that's that's where you get into it. Right Is that the fiat currencies are centrally controlled, so it's a government that controls that currency and they control how much of that currency is in circulation. They control.
Speaker 1:Like we're saying now they can.
Speaker 2:Well, exactly. And then you have banks who can control who has access to that money in the fact that they can create an account. So this, like these layers or these sorts of hoops that you have to jump through to actually get onto the system.
Speaker 1:Yeah.
Speaker 2:Whereas Bitcoin is an alternative currency that has no central authority associated with it. So and this is quite cool about it is that it no one knows you created it. It's just being created by this pseudonym, satoshi Nakamoto, right, and that could be a single person. It could be a group of people Nobody knows to be the NSA. It could be NSA, right, but the really cool thing about it is that the American bank or the American government totally could be.
Speaker 2:However, there's not a single entity that you can take to court to try and make them, to try influence them, to control, to try and influence your control over that currency. There's no like so. With Facebook, mark Zuckerberg can be taken to court and he can be made to change a whole bunch of stuff about his systems based on government policy right, whereas Bitcoin, there's no single person that you're able to take to court to go. Actually, I want you to make your currency like this. So the fundamental things about Bitcoin that make it different to fear it is there's a cap on how many Bitcoins will ever exist.
Speaker 1:Yeah.
Speaker 2:And so there will only ever be 21 million Bitcoins that are in circulation. So that makes a declationary currency as opposed to an inflationary currency, which is what a lot of cryptocurrencies typically are, but it doesn't really match to ideas like me, right, because at the end of the day there's 21 million, but it's like if you've got million in your bank account right, they're saving right and you have zero interest rates. Yeah, yeah, the government continuing to print money right, and that diminishes your wealth. It diminishes your spending power year after year.
Speaker 1:Yeah, my point was more. If there's 21 million, they're all worth a quid, right, let's just say and then, oh look, somebody else wants them. So we'll split them half and say there's 42 million. I just have half a Bitcoin. The value keeps going up of Bitcoin because each bit of it is just more valuable.
Speaker 2:Each bit of a Bitcoin. This is what I understand. You're not doubling the amount of Bitcoin, though You're saying that a fraction of Bitcoin is worth more than what it was yesterday right.
Speaker 1:Is it not just like gold? Then it's exactly like gold. Yeah, I think like gold.
Speaker 2:It's an expert. I don't like to call it gold 2.0, but it's digital gold, because they just sound like shit ways of thinking what it is. But it's a model that is built on scarcity, so yeah, and you could compare them to baseball trading cards or whatever, but no, because you can print more trading cards.
Speaker 2:So for me, the rare ones you can't duplicate, right, you can't replicate. And this is where Bitcoin has its real use cases. Even with gold, right, I could sell you some gold today, right, but you're not a gold expert, so you have no real way of verifying what I've given you has any value. You kind of need this third party to go oh yeah, actually, what Mitch has given you there is real gold, it's not some fool's gold.
Speaker 1:Okay, that's making more sense. So if I go into all the gold in the world and there's 21 million bars and then I go to Tesco to buy some beans and I give them a sliver of gold, they can't validate that that's actually good gold or the quality of it, or et cetera, et cetera. So I may be able to buy one or 10 or no cans of beans, and what?
Speaker 1:you see is if I've got my sliver of Bitcoin and I walk into the shop and we'll come back to the fact that I can't use it. I walk into the shop and I handle my sliver of Bitcoin. They can validate against that thing that we're not going to talk about, that nobody understands, called the blockchain. Yeah, I like to think that works Nobody I know, understand them, I'm sure you guys do, which means it goes yep, that bit of code is actually that bit of Bitcoin. You can let them have the beans Simple.
Speaker 2:So basically it's gold with a validation system and the limited but better than a validation system or validation system and it removes a third party trust entity. It's basically a consensus system for trust by the group, in effect and exactly the group validates the currency and because the group or the network is so large, it's actually impossible to defraud virtually, but not impossible. I mean, there's no such thing as impossible. The thing they do are potentially wasted defraud, which get too technical.
Speaker 1:Yeah, that's not even, but it's safe.
Speaker 2:If you just say it's fucking hard to defraud like really hard to defraud and when you come to gold in that sense that yeah, you're analogy of going to Tesco I would need to bring a third party along with me to validate my gold right, and or Tesco would need to hire a third party.
Speaker 1:Yeah, they could have a gold validator sitting in a little booth for the enormous. Do the dry cleaning.
Speaker 2:Yeah, which you're then going to have to pay money, like you're going to have to pay that person. So that's taken away some of the value of the sale that have Pesco are making. So they're losing money to that right, Because with Bitcoin the fees are much lower because you don't have this middle layer of validators.
Speaker 1:The validators are the network and they have fees, but they're just really low compared to what we've got now is a deflationary currency based on the thing which is finite, which is validated by the crowd and is technically virtually impossible to steal. Well, no, no, that's not true. Impossible to steal, impossible to steal, impossible to steal it. So now for the people who sit there like me going okay, I'll take Mitch on his word and all of that stuff. One eye here is more people talking about investing in it than actually using it. So there's two strands I think we should try and cover here. One is, I think the more interesting one for me is like in 2011, when these guys in the office were telling me to buy this stuff and I was like, yeah, where can I spend it? You'll be able to spend it everywhere soon. Right, there's a wall everywhere. It won't belong with phones and everything. You have to walk in and slap it down. They're much like Apple Pay just use Bitcoin. And that was said again in 2006 and again in 2016 and again in 19.
Speaker 1:I haven't seen nothing which persuades me, as the man on the street, that I'll be able to walk in and buy a pair of headphones and just tap my Bitcoin wallet to a Bitcoin card reader and transfer money that way and nor do I have any trusted that today it's worth 50 quid and tomorrow the same bit of Bitcoin's worth 80 quid. So why isn't it adopted in shops and why would I spend it when it could be the same sliver? It could be 50 quid a day, or 80 quid a day, or tomorrow or 20 quid. So the headphones, like I feel sorry for those guys who bought those Lamborghinis on Bitcoin and it's, you know, because they were buying it on the way up and the next day they could have bought three. Why would I use it if it's value isn't at least polaroidly?
Speaker 2:stable. So you've touched on a couple of things there. One is volatility, and the other one is actually being a what's the use case right and being able to spend it. So let's go with spending Bitcoin first, and the analogy here is like you don't spend gold when you're buying a cup of coffee, because it's just no one carries gold around and to transact in gold would be too slow, and so if you look at how currencies evolved, that most fiat currencies used to be backed by the dollar, right, sorry, backed by gold. Can we take that bit out, because that just sounded a bit stupid.
Speaker 1:Just pause and say it again.
Speaker 2:So yeah, so fiat currencies used to be backed by gold, so you weren't, and the banks would give you these banknotes which are I used to say that this is a token that you can exchange for your gold at any point right? So because we realized that it was inefficient to transact in gold, so we got these banknotes right, and the thing's kind of true with Bitcoin, it's really inefficient to transact. With Bitcoin, it's too slow. So if I was to go into a Starbucks or whatever now and buy a coffee and pay for that coffee and Bitcoin, the merchant would be waiting 10 minutes or so maybe for that transaction to actually get validated. So I don't really want to hang around 10 minutes whilst they confirm that I've actually paid for the coffee.
Speaker 2:And so this is where the space is evolving. There are sort of solutions that are being built on top of Bitcoin that allow you to spend Bitcoin, but the actual transactions don't have to get immediately committed back to the actual Bitcoin ledger. They're happening in this sort of liquid layer two solutions. For the technical people. This basically means there's pathways of doing payments that group a whole bunch of payments together in one transaction that finally gets vessels on the actual Bitcoin network.
Speaker 1:It's like a credit card processor, then, in effect.
Speaker 2:Yeah, exactly, which makes it faster to spend it, right. But you're right. And why would I want to buy a coffee in Bitcoin-ish? Bitcoin's price is so volatile and this is where it comes into the narrative that Bitcoin has evolved over the past decades. It's still a new technology and I don't think anyone really knows what its best use case is yet. It used to be. Oh yeah, it's this great way. You can just walk into Starbucks or whatever and buy a coffee, and it's digital money and the narrative now is sort of starting to change and it's more well. It's a store of value now that actually I can put my savings into it and over time it will grow and decade this volatility. At the moment, however, with its deflationary model, that volatility over decades sort of just levels out like right now it's really volatile, but if you zoom out and look at how the currency works and how the deflationary model works, you're zooming out to a tiny, I mean in the grand scheme of the footsie.
Speaker 1:If you've put your pension in the footsie over, we all know if you leave it long enough it grows, regardless of today and 2008 and 1994 and all these other terrible times. So you know, if you stick your money in a footsie 100 tracker over time you'll be up right Guarantee, apparently, until somebody brings a pandemic and half the world goes into lockdown. But that's for another day. So you're saying if you zoom out you can only zoom out like literally 10 years. So you've got no real historical evidence that it will be stable over time.
Speaker 2:But I think that's where you then get into what the currency actually is and how it's been created and set up. It's sort of economic policy that has been baked into it of how. So to get into a bit more of the technical stuff, so we've established it's a deflationary currency and there's a supply rate. So every 10 minutes there were 6.5 new bitcoins available. So these are brand new bitcoins that nobody's ever owned before but that are flooding onto the market and every four years, that supply rate that's that flow of new bitcoins hogs. And in 2024 now, that 6.5 or half to 3.25.
Speaker 2:And so, as time goes on, there's less and less bitcoin being new bitcoins being released onto the network. So that means so then let's say, you're really late to the game and it's 2030 and you're trying to buy bitcoin and by this point, there's only 1.7 something bitcoins being made every 10 minutes. Right? How do you then buy bitcoin? You then have to buy bitcoin from somebody that's already holding bitcoin, and so, yeah, this is sort of getting into how our prices and machines go up because that in scarcity, that well okay still like.
Speaker 1:Gold is still like gold. That is literally exactly like gold. It's a minute and in 2024, we know that that mines don't give you half as productive to get three bars a minute or whatever. So if you want to buy gold in 2030, when we know the mines only producing one bar a day, right, you're going to have to buy off somebody who's already got gold. Yep, simple as that.
Speaker 2:And at that point, because there's less being created, the price starts to stabilize, because the kind of gets an equilibrium is reached right where?
Speaker 1:Yeah, I mean in any sense.
Speaker 2:So at the moment it's all speculative and there's a whole bunch of gains theory around the price. But once you know that, you get to a point where there's not much new Bitcoin being created, once you get to a point where the entire model just stabilizes and doesn't continue to grow because it makes sense.
Speaker 1:So this point if I want into it, I'm just buying it as an investor. I'm just, yeah, good, if you could. It runs out, it starts diminishing because it's not as if we're going to make jewelry with it, right, we're not going to give it to our loved ones in a ring and say you know, say I love you, or anything like that. So well, yes, for some people we'll have it, we'll probably have it in a USB key, but on reality that's not going to happen. So what we're seeing is it's a finite digital gold and if I buy some today and rather buying another £1,000 of FTSE 100 UK Virgin Shearer account, whatever, I'll buy £1,000 of Bitcoin.
Speaker 1:Once I've worked at a used Coinbase and we know that in 2030, because there's less of it the price will keep going up, but then it will stabilize and become more. Like you see, with an exchange rate like we have now, it takes a great deal to create a lot of movement. So are you saying that really it's not going to be the way it was touted before? Is it buy Bitcoin, nip the shops by yourself, a Lamborghini or a copy? It's actually going to be somewhere. I put a few quids, like if I put a few quid into an ISO or something as a way of moving my Fiat normal money into something else.
Speaker 2:Yeah, right now, that's exactly what it is. It's a hedge against traditional ways of building wealth. So I don't know if you believe the stock market is propped up by all of the Fiat money that's currently being printed. If you believe that the Fiat currencies are going to go pop, then Bitcoin is really a hedge against that market.
Speaker 1:So 99.x% of people are going to go. What are you talking about? Because I've read some of the stuff that some of the theorists put on Twitter. And the Fiat currency is going to go pop and we're just writing you money all the time and I started going yeah, okay, I can understand where you're coming from with that the Americans right here is another three, and we've just written another 300 billion for Kickstarter and more of this stuff. I think we spent 60 billion on the furlough scheme, so we need some more money.
Speaker 1:Everyone we didn't have last week the magic money tree, as it was written before Jeremy Corbyn must be sitting there going, huh an I, the magic money tree. How sustainable is it? No, I get all that and I read the conspiracy theories and I loop back and I remember as a child, america had the biggest debt of any country and it was still the super part, and that debt has only grown and grown and grown. But what's different now is all the other countries, the EU itself has got debt, plus all the European countries within the EU, plus Canada, plus everyone else's debt and debt, and debt. So is there real hedge? That not nothing new, but the real Bitcoin conspiracy theorists are they really saying that all that could go pop and the Bitcoin will be the thing to have? That was hedge against that.
Speaker 2:Yeah, it's like a meme on Twitter Bitcoin Vixus wish and Bitcoin Vixus Peter Keran. He's going pop.
Speaker 1:Okay. So question I take my 10 grand, I buy Bitcoin. It all goes pop, right Apart from the fact we've got bigger problems if it does go pop, including war, famine and a whole bunch of other stuff. Probably. I've now got 10 grand of Bitcoin on a USB key, but I need it to buy guns and food. How do I?
Speaker 2:go and buy. That is when things start getting priced in Bitcoin. This is the other part that comes into the price stabilization is that at the moment, there's only maybe 1% of the population in the entire world that are using this stuff.
Speaker 1:Is it as big as that? 70 million people, is it that many?
Speaker 2:Yeah, but I think that's still quite small, considering there's not that many.
Speaker 2:And so, as these currencies start to inflate and we'll get into some of the actual cases where this is happening right now in the world to show you what could happen is people then, yeah, they switched to Bitcoin, and then things start to get priced in Bitcoin and then you're starting to transact in Bitcoin. So it's kind of I'm no expert, I don't know how this plays out. I don't really know what you get the economic system, and what I do do is I sort of like try and signpost people to people who know more than me and anyone who's listening to this and wants to understand how the economy works better.
Speaker 1:Economists are always wrong.
Speaker 2:Economists are, but I like go and watch. There's a video by Ray Dalio and I think the title of it is how the Economic Machine Works. Have you Google Ray Dalio and how the economic machine works? A 30 minute video will come up and it's the simplest, best explainer I've ever watched and how the economy works. I'm never going to be able to explain it better than him, and I'm only going to be paraphrasing him at best and doing a really bad job of it. So let's go to I encourage people to check that out.
Speaker 1:Yeah, I'll put a link in the footnote on the intro. Come and listen to Mitch, but first watch this.
Speaker 2:Well, that's literally all I'm doing. My entire email course is my process of. Well, here's all the things that I've learned to understand why Bitcoin and it's because it takes you through this.
Speaker 1:This is an email course you're running that I can sign up to, and it's day by day, week by week, or is it?
Speaker 2:At the moment it's going to be this daily, five days. You get five emails how the money system works, how banks and governments are effectively kind of maybe borderlines on conspiracy, of how they're controlling the economic system for their benefit. And then it gets into Bitcoin and who Satoshi Nakamoto is. It gets into the fourth email explaining how to use Bitcoin as a sort of hedge against the system. And then the system finally mailed is just here are a bunch of ways that you can actually start buying Bitcoin and actually encouraging you to buy some, because I think the only way you actually learn why Bitcoin is just by buying some and holding it and just seeing what happens. Maybe you could replace this entire podcast with just buy a hundred dollars of Bitcoin and see what happens.
Speaker 2:Well, it's an interesting one that's the best way of learning how to use it and what it does. I remember.
Speaker 1:I think it was the ninth of March had a conversation with the guys really into this and he'd sold everything. And then, of course, the stock market that day was going down and down and down and whatever. I can remember how far it went and I remember looking at my sip and I'm going, oops, should have done the same thing, but I hear, is me holding on for the long term, because the stock market always recovers and, I have to be fair, it's got within like a sniff of where it was. I was rescued by Amazon. There was a lot of Google in there which I bought in 2010 instead of buying Bitcoin, and it struck me then as a point where, actually, if this pandemic doesn't go away, if there's a second wave, if we are locked down again, then you get it. Then I think you get the interest you're talking about, because I think, if you look at us, we're all being bribed to get the pub now on a Monday.
Speaker 1:I don't fancy that. I'm sure other people do, but if this comes back in the winter and is as bad as it was before and everything is shut again, who, nobody can predict the benefit that's what you're seeing is you might as well take some of any money you've got lying around that is spare, put it over here, because it actually might be better off there than kept as cash or whatever. So how do I buy it? Why is it so difficult, and how can a simpleton like me actually buy it? What's the easiest way for a normal person to buy it?
Speaker 2:It's actually not that difficult. Now there's multiple exchanges. I can't do that. This is a BBC moment where I'm going to pick one and it's advertising for them, right.
Speaker 1:I wouldn't worry. There's only eight subscribers. I'm like 64. This is episode two.
Speaker 2:Nobody's listening yet I just go on Coinbase and I deposit money from my bank accounts. This is the bit that makes me nervous every time. So, okay, you go on to Coinbase, you set up and they have a wizard that basically takes you through a series of steps. You have to prove that you're a human being. You have to prove that you supply identity information, such as a passport or a driver's license. You've proved your address, and this is just a process that pretty much all big exchanges have.
Speaker 1:That's no more complex than getting in Harlem Exactly.
Speaker 2:So people are used to that type of process and once you're there, there are multiple ways you can actually deposit free it currency on to the exchanges. So with Coinbase, I do a bank transfer, they give me their bank account details and I transfer money. Wow, okay, it's that simple, and then you're just limited by how much your bank will let you transfer in a given day if you're ambitious and trying to buy loads or trying to buy a whole Bitcoin. So really, it's about seven grand right now to buy a whole Bitcoin.
Speaker 1:So I thought they were, weren't they 16 last year at one point?
Speaker 2:Yeah, they hit in GBP. They hit a max of 15 grand.
Speaker 1:That's when all the Lamborghinis came out.
Speaker 2:And once your money's on Coinbase. At that point I was going to show you my app, but I won't because I think the green screen doesn't work it very well. It's basically just the press of a few buttons on an app and turn your money into Bitcoin and then you have. So this is your own app, not, sorry, not my app. It's a Coinbase app. Okay yeah.
Speaker 2:Yeah, and then I have Bitcoin in a wallet on that exchange and then I move it out of there into a hardware wallet. And this is where it gets a bit scary because and this is where the user experience is really awful In order to move it onto my hardware wallet, I have to copy and paste these large addresses around the multiple characters, knowing that if you mess up by a single character, you lose your entire money. And it's a really scary process and you lose your entire money.
Speaker 2:Yeah, so if I want to send Bitcoin to somewhere, I have to know the address that I'm sending it to, and if I get that address running by one character, by one letter, one number, the money's lost. Why isn't there a way of recovering that? And that is the scary bit, why can't it be an app?
Speaker 1:I don't understand why can't it just be an app on my phone, so like a buying Coinbase? That moves it into that app and then I can click, you know, go through my contacts and say hey, send Mitch to Quiddorax. Yeah, should that be slivered to sliver Bitcoin? And it just doesn't.
Speaker 2:That's where the industry's improving. There's a lot of developers working on that side of things. To just make it as easy as yeah, it's a contact of my own send and there's people doing it with domain names, so I can buy acrypto domain name and I can send a crypto currencies to a domain name, much like you can send an email to a domain name.
Speaker 1:And store it in your inbox forever. Yeah, exactly, so it's still quite, you have to be honest, though, for the average, so this is not something crazy.
Speaker 2:Yeah, which is why I sort of I'm selling myself as a Bitcoin coach. I've done this multiple times now and I know what I'm doing and it's really quite daunting. The first time you do it and then the second time you do it it's like oh okay, I've done this before and you gain confidence really quick, and so I yeah, people can come to me if they like and I will just coach them through the process.
Speaker 1:So just talk me through that, obviously, because I think this is really interesting. So you've got a website, learnmybitcoincom, which is where you sign up for your email so you can start understanding it in a way that is step-by-step and linear, and then you can actually You've got a coaching. So there's a bit like you get personal trainers online now on Zoom and you can do your assistant morning. My wife does these and you can pay for a bit of this and a bit more, or you can do. So what you're doing here is offering a crypto coaching session. Leave a very low budget one at £5.99. And it goes right up to £399 a month and that is really getting people to understand and to help them actually move into the space.
Speaker 2:Yeah, so for the top tier package there, you're getting five hours of my time for that month planned. I will go through. It'll be like a conversation like this where we can go through all of your fears and questions about the currencies why would you do it, why would you get into it, et cetera and then baby-stepping you through the process would be on a Zoom call where we share screens and I will show you which buttons to press and at any moment you've got a question, I'm there to answer it and just baby-step me through the process. And, to be honest with you, once you've done that the first time, it won't be a subscription of Well. The next month I'm going to pay another £399.
Speaker 1:Okay.
Speaker 2:I would say you switch down onto one of the lower packages.
Speaker 1:So you end up kind of like you could end up you would teach me the whole thing. Basically, once I'm confident, I can go down a level. Once I'm super confident I can go down a level, but you're still there when I go. What's XRP or Ethereum or whatever?
Speaker 2:And I start having.
Speaker 1:Exactly.
Speaker 2:So when you get down onto the email code zone, at that point I'm there to answer your emails that you have about any cryptocurrency. I'm sending out emails regularly throughout the month, so what I do a lot of is scam detection Just a lot of scans in this space trying to steal your money, and yeah, and I guess this is good news.
Speaker 1:So, in the end, when you have You've not been doing this launch of it's been quite it's quite new. So, once you get a bit further and you'll end up with a community which is sort of vetted, in effect, because they come to you, you're not going to get scammers running your community because you'll out them and you'll actually create I hate this phrase we create a safe place for people to invest in Bitcoin. But that's actually what you'll end up with, because for me, I think it's. People don't make their own financial decisions about a lot of stuff about their pension. People go to financial advisors and they don't run their own sip and they Sometimes they get ripped off and that's an old school stuff that's been floating around forever. So it makes sense if you want to try a bit. In fact, I actually did sign up for the emails, but I'll actually join because I'd like to. I'd like to actually get me to the point. I've actually got some that I actually managed to organize myself, because that was a disappointing thing. It's 2011. So close, but too complicated.
Speaker 2:Well, that's also what the top tier coaching package gets you through. It's not just buying on an exchange. It's how to properly manage your crypto, become your self-custody. Putting out on a hardware wallet, securing it and a hardware wallet is literally just a USB stick, isn't it?
Speaker 1:Yeah, I have one around somewhere. For the viewers who are listening to the podcast. He's holding a USB stick. It sort of almost stays there.
Speaker 2:Yeah, it's like a little USB stick.
Speaker 1:This one's called a Trezzo, but I've got a bunch of pieces in different.
Speaker 2:I've got different companies and I've done the research. I know which ones work the best, and so.
Speaker 1:but if I'm not wrong, it's just a string which can be a text file. It can just be a text file. Yeah, it can be. So okay, I could print.
Speaker 2:I mean the cool thing is right, but I can actually store Bitcoin in my brain. So this thing here, this hardware wallets.
Speaker 1:It's holding up a USB type thing. Yeah, I.
Speaker 2:Can lose this, I can destroy it, but you can remember the number. I can recover the Bitcoin, and so there's a 24 word passphrase for this Bitcoin, but for this Bitcoin wallet, who is language? I can remember those 24 words and, in the correct order, I can store the Bitcoin in my mind effectively.
Speaker 1:You can, justin. I didn't have any people using the first 24 words of the Bible.
Speaker 2:Well, that's, that's it. You could use it. Any book, right it's? Or you could use it.
Speaker 1:You want whatever's gonna. One is a book that can find a and the book that stays the same and the print run, don't it?
Speaker 2:could just be a book, this personal to you, or maybe it's a mnemonic, I don't know, like I always remember back to school where we learned the colors of the rainbow. Like Richard of York, he's not in vain, right, it's? We're just learn a 24 character mnemonic for the words that he You've chosen. But the point is, though, that the people are actually doing this right now, like in Venezuela, there's there's a currency crisis, and there where the death their currency is gone through hyperinflation, and there are people trying to leave that country because of the oppressive regime that is now, and so, initially, they were trying to convert their currency into US dollars as they were trying to leave the country, but then they were hitting Border checks on the way out.
Speaker 2:That was in confiscation, they're US dollars, and then, well, they, the citizen, started buying Bitcoin, and then the hardware wallets were getting confiscated, and so what's the safest way to get your wealth out of the country? Well, it's in your head, in your head. You can't confiscate that. So people are actually doing this right now in this world, that they're using Bitcoin To get their wealth out of the country, and so this is happening in Venezuela, in Lebanon, any, any country where they're, they're their currencies going through hyperinflation, that this where Bitcoin has its real advantage, especially if the country is in high conflict. It's and you have to get out and you don't want your money or wealth to be confiscated. So just be an imagine these people can't open bank accounts in different countries, but there's no barrier to entry in Bitcoin?
Speaker 2:It's. It's downloading an app.
Speaker 1:Do you need to explain to me? Let's imagine this is the UK. You know, unless just say, like a Can I cook a pound for the sake of argument, I'll get hyperinflation. Next and tomorrow the can of coke is too quick and by next week the can of coke is tank. But right, yeah, mean one thing I need to go Britain. I want to go to France and I can't take any with me because I'll be found at the cut of the borders. I've got all my money out in cash, but that that then were of my friends, and now I'm gonna take out his Bitcoin in a, not to buy the Bitcoin. But with hyperinflation is my amount of Bitcoin I'm buying going down every day.
Speaker 2:Yep.
Speaker 1:Okay, so I need to be quick. So the people who, the people who in Venezuela getting over, being told this last or actually getting the worst deal. So the smart building it looks like hyperinflation. I'm out of here. So if we had, that's why.
Speaker 2:That's why for you and I, right now, it's a hedge against inflation, because it's it's not happening to us, but it's. You could imagine a scenario where, where it does happen to you and I in this country, right? So that's why it's the hedge.
Speaker 1:Right now there's going to be one, going to be a few countries where inflation is gonna good nuts right, because who knows what they affects, the pandemic gonna be, there's gonna be. Some of the economies are unstable and this just Knocks them off. I think some of them there's. There could be some southern European countries that might happily be protected because we're in the EU, that otherwise would be struggling the interesting thing with it there is that you can there's a, there's a if I it's hyperinflation does happen.
Speaker 2:There's some interesting arbitrage opportunities that you could take out and loan in in GBP real fast by Bitcoin and then the currency continues to inflate massively and loses value and you pay that loan back right, straight away. You cash out the amount of Bitcoin for the learning. You've got the Bitcoin.
Speaker 1:Maybe leave that bit out, but it's no, leave it in because it's. The interesting thing is, I think, is this is what happens, right, because because there are so, because it is so new, there are so many Areas around it which are unknown to most people.
Speaker 1:Very for people at you who are here into it. It means perfect sense to have the conversation that if these things were to happen, these are all and I think the most things like I've heard about it. I want to, I want to try and it's just how do I try? I think I'll leave to Lino. It's like they just they're either really the people anywhere into it I'll let you they're really into it and then I find there's everybody else. We just hope I have a podcast to try and get the mess, because wasn't one of the things I wanted to talk to you about was Wasn't the massive growth when it did get to 16 15,000 Coin? Wasn't that the Chinese, the wealthy Chinese, when I moved their money out of China to get around the restrictions? They were buying Bitcoin, shipping it into the into the hell.
Speaker 2:No idea about that. I yeah, I don't know I'll take that back.
Speaker 2:I don't know if that was the I do was a lot of speculation around what could cause that that massive price drive. A lot of it was just FOMO, fear of missing out, people hearing about the price going up and just wanting to jump on the bandwagon. It's so. But coming back to the people who are hedging against inflation or actually using the currency Because I actually experience inflation it's they're not even bothered about the volatility of Bitcoin at this point because that currency is so Damaged and broken. Yeah, the volatility of Bitcoin. It doesn't matter if they're using 5, 10 cents of their wealth each day, because they would be losing more they were using their own currency.
Speaker 2:So then kind of people pause, you start. You asked at the start, like what is Bitcoin and and how, how do I use Bitcoin? To me, I don't think what and how really matter at all and and that's I'm not really gonna be able to tell you. I don't. I didn't get the point of telling you what Bitcoin is or how it works, because you don't need to know what the internet is or how the internet works to be able to use it. You just need the reasons why and you know why the internet exists, and it's a whole bunch of reasons. And what was the simplest? We can have this conversation right now without being in the same room, right? You just need to learn why Bitcoin, so should the banners way the use cases is just one example.
Speaker 1:That's a great. That's a great analogy, because then, yeah, I know some people who I used to sell websites door-to-door in 1999, that's. And then people say, what was it before? You see, because people will there be those gonna be six billion people on this thing. And then if they want to buy your stuff, this is how they'll find you, because they're not gonna look in the other page. They live in even just Glasgow. They're not gonna look in the crannily pages right over there.
Speaker 1:Hmm, and he's a knock in the door store dorking and only one guy ever wanted a website and that was and I think maybe there's a little bit of because it comes from tech land, because it's quite nerdy or perceived to be. Then I said, why would I have it? Because how does it work? And it's over a copy down to do and need it. And if you look at the same adoption, if you got this, if the same adoption patterns happen, it just becomes a thing that everybody has either as a hedge or as savings or, as you know, some just the same way.
Speaker 1:I mean, how long is it before in your sip you can, you can, you can, you can actually buy Bitcoin and leave it in your sips with tax efficient. I mean that because there's a whole bunch of tax issues with, you know, castle gains on Bitcoin and stuff that nobody really talks about. I saw the Americans were getting spanked because the big speculators were making a fortune and then having to clear that they put 50 Grounds of Bitcoin turns to 50 million or something they were due the castle gains, by which point bitcoins going back down. So the yeah game taxes.
Speaker 2:A nightmare with Bitcoin. And if you do get into it and start trading it, higher in account and it's really yeah, except the government have got some crazy. But the UK is probably one of the worst. If you want to trade Bitcoin, maybe don't live here, because you get. You get taxed on every trade that you make because you know when it is income tax. Yeah, because you, you know to every trade. Where you go from a crypto back to fear it is potentially taxable, especially if you're doing it frequently, because then it's think it's income. Yeah, there are other countries around the world so to Portugal's very amenable to crypto and it's doing.
Speaker 1:I bet you I.
Speaker 2:Don't know about studio, but Germany, germany as well. Germany's a good place to go if you're into crypto and Not avoid tax, but not get stung by tax. Yeah, that's, that's tax but tax avoidance across.
Speaker 1:Technically legal tax evasion is illegal.
Speaker 2:Yeah, exactly, and, and, and I'm sure there are people using crypto for that purpose. Oh, there must be not advocating any tax, and there must be.
Speaker 1:There must be a man who even realized what you've just said.
Speaker 2:I mean, there must be so I, I didn't, I didn't realize I should show. Well, recently, when I started looking into what the fuck are my tax implications for all of this stuff, I sure you want to talk about actually doing yeah, cuz I'm, I don't do it. I didn't do it a hold, so I'm fine as holding Bitcoin. I don't trade it.
Speaker 2:Okay but I was trying to work out Well, if I start trading it, what am I having to pay? Do I have to pay tax? How frequently? So yeah, that's where it gets into a Legislation. Just let's not go there. This is this.
Speaker 1:Have a bit of energy to exciting about it. Let's not talk about legislation. Before you know I'll have some good corporate governance lawyer on talking about the benefits of good corporate governance and then everyone will all, all the people unsubscribe.
Speaker 2:Yeah, how to lose an audience. Right, it's how they just got one. But coming back to some of the use cases that I think, as you saw, I'm saying the adoption curve would. It would just grow as people realize oh yeah, I need this now. It doesn't matter anybody going around saying what it is or how it works Not gonna convince anybody to use it until they need to use it, right.
Speaker 2:And so a Use case that I find fascinating is Saudi Arabia, where women in Saudi Arabia I didn't know this before for a lot of nurses, that obviously, um, is that women aren't allowed bank accounts in Saudi Arabia. So, yeah, if you're, yeah, if you're a woman in Saudi Arabia, you work and you get paid. Your money has to go into a man's bank account, who they are able to control your earnings and how much you probably give you a stipend to live on or something I don't know. But with Bitcoin, anybody can create an account Aside from, like I sort of described how you buy currency on Coinbase and there's a sort of verification process. But actually, if I want to just create an account, I can just download blockchaincom. There's an app onto my phone, open it up, create a wallet and that's all I need to do.
Speaker 2:I have a wallet that anyone can send money to. I don't need to verify who I am. I don't need to go to a bank to open an account. I don't need a certain amount of money before I open the account. I can just create an account and nobody else can control that. And that's quite a powerful thing for any citizen in the world, and especially these ladies in Saudi Arabia who can now get paid directly rather than having to go to their husband or their father, whoever is the I think I just said that must be impactful across a lot of the world.
Speaker 1:There are a lot of places where that controlling aspect of women's lives must be effectively you could. This will help to start freeing that up.
Speaker 2:And that's where I believe Bitcoin is this huge transformational opportunity. And you look at many countries in Africa where people can't get bank accounts for whatever reason. They all have mobile phones and they have internet, and if you have those two, then you can have Bitcoin.
Speaker 1:Do you know what an impassor is?
Speaker 2:I don't.
Speaker 1:An impassor is really interesting. So I think it's Kenya to be checked. Don't hold me to that. So, basically, impassor is a way of moving money using text message. So you'll have somebody in a village Excuse me, who is in charge of the impassor for that village. You'll be the next village and you'll I owe you 10 quid. So I text them and tell them that I owe you 10 quid and they pay you the 10 quid. So then what happens then is you're a village head of impassor settles up with my village head of impassor, and this all happens in mobile phone and text messages and it happens for years. It's the biggest trading system, I think, in Africa.
Speaker 2:I think that sounds kind of flawed, in that there's still this central bit of authority that is the village head of impassor. If that person decides to be a bad actor and is elected anyway, then you're having to still trust this person, whereas, yeah, but you have that. You're trusting the network and the network has so many incentives for you to act directly.
Speaker 1:What I was more alluding to is the fact that you've actually got this kind of transactional present happening.
Speaker 2:I think the transition from that to Bitcoin is.
Speaker 1:Yes, because it's all about that framework and modeling people's mind right?
Speaker 1:Exactly yes, whereas here you don't have that. Here I go to the Lloyd's bank of the NatWest and I get money out if I want cash, or I send it from my banking app to your bank. You can see all the challenger banks put a little shine of gloss on the top and I'm like, oh wow, banking's all modern. It's just a better app. At the end of the day, natwest could have done it. They just didn't know how. Or the systems are built in the 1960s. Well, yes, you could have a bad actor, but the guy who's in charge of distribution that money, he's got the social requirements. If you run away with everyone's money, you ain't ever coming back. In a way, it's a very low-tech version of what you got.
Speaker 1:The adoption from where they are to Bitcoin should be simpler than going through the process of having all these banks with the bank manager who says Mr Campbell, you can't spend 20 quid in your credit card because you've got these weird global changes In Germany. You spend too much to get you in. Have a chat. They don't have credit cards in Germany. They don't borrow money in Germany. If they do borrow, it's highly, highly measured and controlled on spreadsheets and your bank manager gets you in. If you say you're going to spend 50 grand on a house extension, you better spend 50 grand on a house extension because you'd be backing with the bank manager explaining why it wasn't.
Speaker 2:This is where the use cases for the Western world for Bitcoin start to come in is that there's no central party or government who's then looking at what you're transacting with. It's like interacting with cash and it's a digital form of cash that doesn't, of course, you can trace Bitcoin and it's not this private coin that hides all of your transactions and you can learn the money through. Not at all, but it does add a layer of privacy that allows you to just transact without anybody really watching or being able to stop you or confiscate that money, which that's where it starts to come more to home. I mean, germany's on our doorstep, and that's a great use case for why they would want Bitcoin.
Speaker 1:Yeah, the bank manager wondering why you've got insurance running through your account for 120 quid for your Ferrari. Oh well, sorry, I didn't buy a Ferrari. Yeah, I did what you're talking about.
