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April 20, 2022

#60 Anthony "Pomp" Pompliano - Bitcoin, Crypto, Myths About Money


Anthony “Pomp” Pompliano is an entrepreneur and a solo capitalist with an investment portfolio valued at over $500 million. He invests in early stage tech companies, bitcoin, and other cryptocurrencies. Pomp is the host of his own podcast and has a daily newsletter about business and finance with thousands of paid subscribers. In this episode, we talk about cryptocurrency, fiat currency, financial tips, and dystopian futures.

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Transcript

0 (0s): Bitcoin is by far the best store value on the entire planet. The compound annual growth rate of Bitcoin over the last decade is 150 plus percent. It absolutely destroys returns of gold, real estate, other commodity stocks, et cetera. 2 (17s): Hello everybody. You're listening to Chatting with Candice, I'm your host, Candice Horbacz. Before we jump into this week's episode, it is time to do a couple of shout outs. So I wanted to say thank you to Wesley and Peter for those cups of coffee. I really appreciate it. And a big thank you to Hector, who is a premium Patrion member and something new that we're doing is reading a couple reviews before we hop in. So I wanted to say, let's read priest canes, a review. So he says, I love your honesty and how you and your guests can make these complex topics seem so simple to understand your energy is very cool. Keep it up. Thank you, priest Cain. I appreciate the five star review. 2 (58s): That's very cool of you. So this week we have Anthony Pompliano on the podcast, otherwise known as Pomp. He is considered the expert when it comes to cryptocurrency and Bitcoin. And I know a lot of people don't know a lot about the topic. They don't get into it because they don't want to feel stupid. So I am here to feel stupid for you and ask all the questions that I know a lot of you are wondering because it's a very confusing space. So hopefully you leave this episode a little more clarity, a little bit of fire in your belly, and you start diving deep into this new web three world. So enjoy the conversation and let me know what you think. 2 (1m 38s): Anthony Pompliano thank you so much for giving me so much of your time today to dive into the crypto space. I like most people feel like I'm a little bit illiterate, but that it's a very important conversation that's being had around me. And I want to be more competent in this space. And I feel like the more that I learn about finances, the more I know that I don't know. And I think that's a lot of people and I know that a big barrier of entry specifically with the crypto space is education. But to me it's like most people don't know a lot about Fiat money. Most people don't know what money is. So what's like a good starting point for most people. Like what questions to be asking what facts to be looking at when it comes to getting comfortable with the idea of getting involved in crypto. 0 (2m 25s): Yeah, I think the key piece is whenever somebody asks me, like, what is Bitcoin? I don't even talk about Bitcoin. Really. I just talk about what the problem is. I try to explain to them and say, look at the end of the day, if you understand what Fiat currencies are and how they work, that tends to give you a pretty good understanding of what the problems are. And then you go looking for a solution. It becomes very obvious why Bitcoin is that solution. And if you really kind of break that down, but the simplest way to think about it is Fiat currency is used to be backed by commodities. So the gold standard that really gave the currency value. And now all of a sudden we have removed that commodity backing in 1971. 0 (3m 7s): And so what it did was it changed who actually controlled the currency. The currency used to be not able to be printed by anybody couldn't be created. Couldn't be devalued because you had to literally go dig up more gold out of the ground in order to have more of the currency. Once we transitioned to a world where now central banks could create the currency, as they saw fit, it really encouraged people to intervene in markets whenever they thought it was appropriate. And you know, the last two years is probably the best example of that. We saw the pandemic hit people, went and sat at home because of the government mandated lockdown. And when they did that, the velocity of money slowed down in the economy and asset prices all started to fall. Stocks went down gold, went down, et cetera. 0 (3m 49s): And so the central bank and politician said, Hey, we need to do something right. Humans are really, really bad at just sitting by and watching pain occur. We feel like we have to do something. And so they stepped in, they injected trillions of dollars into the economy. They manipulated interest rates down. And when they did that, they propped up the financial markets and the economy. So they mitigated short-term pain. But of course, like everything, if you make a decision, there's trade offs, there's no perfect decision. And so mitigating short-term pain is what the incentive system has politicians specifically, right? That's how they stay in office as they kind of solve the short-term problems. And also the central bank doesn't want to see people losing money or asset prices falling off a cliff, et cetera. 0 (4m 30s): And so when they did that, they were able to successfully address the short-term pain, but it was at the cost of long-term issues. And most notably the inflation that we're now seeing at, you know, officially 7.9% in the United States, likely in the double digits on officially. And so ultimately what you'd find is that humans are really, really bad at making these decisions because we constantly have short memories. We make the short term decision and there is no right answer. And so ultimately that's really what we're watching play out here. Is that what I just talked about, 90% of people in America don't even know what that means. They have no clue how this works. And so they end up playing a game that they don't know the rules. 0 (5m 11s): And if you don't know the rules, how do you win? And that's ultimately the problem. 2 (5m 14s): No, I couldn't agree more. And I was listening to your Tom Bilyeu episode was very similar to him in the regard that when you hear the term printing money, you thought that money was literally being printed. Like I fell into that category as well. I didn't know. It was like adjusting just the value on some spreadsheets. And I was like, well, if they can do that, that just seems like not the best plan for, for stability. And I have had people say, well, if you have politicians or the government, or what have you that are manipulating the value of Fiat currency, then wouldn't that kind of be, how is that worse than the big swings that you see with Bitcoin? 2 (5m 54s): Like what's influencing that or who's influencing 0 (5m 57s): That. Yeah. One of the things to remember is that when somebody says or talks about the dollar, we don't think of that as being volatile, right? It's just, Hey, I've got $10 in my pocket. If I go to the store, I can buy whatever $10 gets me. But if you actually think about that dollar over, even just the last two years, it's super volatile, right? All of a sudden it costs me 18% more to pay my rent this year than it did last year. It costs me 20% more to go ahead and actually purchase a piece of real estate. On the national average, it costs me 30% more to buy the SMP than it did 12 months ago. And it costs me, you know, eight or 9%, depending on the official numbers to eat food at home costs me 50% more to actually buy a gallon of gasoline now than it did just one year ago. 0 (6m 45s): And so how much of that is because those assets or those different consumer goods actually became more valuable. A gallon of gasoline is just as valuable as it was two years ago, as it is today is that the dollar has been drastically being devalued at a historic rate. And so sure there's supply chain issues that it's not just a black and white type scenario, but for the most part, the prices are going up more so because of the devaluation of the dollar. Now we don't think of that as a volatile asset, but it is guaranteed to go down over time. And the reason why we don't think of it as volatile is because all of the goods and services in an economy are priced in that currency. So if I say to you, you know, how much is a loaf of bread at the store? 0 (7m 26s): You say $2, you price it in dollars. And so we don't think about the dollar being volatile because we simply think about consuming the goods and services in that currency. Now, when it comes to Bitcoin, people think of it as volatile because they price Bitcoin in dollars. And so the U S dollar exchange value is volatile. But if I said to you that, Hey, how much is that loaf of bread at the store? And you said to me, it's, you know, 10,000, Satoshis now all of a sudden Bitcoin isn't volatile any more than the dollar is because now all the goods and services around me are priced in Bitcoin. And so ultimately that's what occurs when you transition, right? I denominate my entire life in Bitcoin. 0 (8m 6s): I think about all of the purchases. I think about all of my expenses. I think about all of my income in terms of how much Bitcoin is this. And so I don't look at Bitcoin as being volatile because I just think in terms of Bitcoin, but if you're thinking in terms of dollars and evaluating other assets, whether it's the stock market, commodities, Bitcoin, et cetera, you're always going to think in terms of volatility, because it's actually the exchange price that is volatile. And so if you were to kind of reverse, this will, the us dollar has been incredibly volatile against Bitcoin over the last two years. And it has been aggressively crashing and it's lost, you know, what's 90% of its value against Bitcoin in the last two years. 0 (8m 48s): Like that doesn't sound so hot right now, all of a sudden, like maybe I don't want to hold that asset. And so I think that's really what people are starting to try to understand is like, there's a psychological component to this. You have to wrap your head around. It's hard, right? We've all been conditioned to think in dollars, but in order to understand this new world, I think that's a key piece to it. 2 (9m 5s): Absolutely. And I think a big hangup too, is that because you mentioned like Satoshi, so like breaking down Bitcoin into a much smaller piece, but you see like this huge number, whether it's like 47,000 or 60,000 or whatever, the value of Bitcoin is on the market that day. And you're like, well, how do I apply this to my everyday spending? Because I'm not spending in those big chunks on a normal daily basis. And then I've heard you mentioning Bitcoin as, I don't want to say maybe a replacement if that's like the right word for the USD. So w I guess why that coin specifically, are there other ones that you think would have a practical application for daily trades, like between person and like consumer and business? 0 (9m 50s): Yeah, so I don't necessarily think that Bitcoin is a replacement for the U S dollar in its current state. I think that what we're watching first is you have to understand what exactly makes money, right? And there's basically three things that make up money that you have to have a store value if the medium of exchange, and you have to have a unit of account, the store value is pretty clear. We need to have an asset that will hold value over time. Bitcoin is by far the best store value on the entire planet. The compounded annual growth rate of Bitcoin over the last decade is 150 plus percent. It absolutely destroys returns of gold, real estate, other commodity stocks, et cetera. Then when we look at it as a medium of exchange, one of the things that we're starting to see now with the building out of the lightening network and the layer two, is that Bitcoin can be transferred to anyone in the world completely for free instantaneously with cash finality, meaning that you actually have the Bitcoin, the second that somebody sends it to you and you don't need permission from anyone. 0 (10m 45s): There's no confiscating the Bitcoin. There's no shutting it down. There's no censoring, et cetera. And so as a medium of exchange to disappear to every other form out there, and then lastly, unit of account that ultimately just comes up to the businesses. Are they going to start to price their goods and services in Bitcoin, or are they going to do it in other currencies? And so when you start to look at that, you say to yourself, wow, like if Bitcoin just becomes a store of value, a savings technology, that alone is worth trillions and trillions of dollars. And I think that is where we are right now at the most part is like, majority of people are simply saying, I want to buy Bitcoin and I want to hold it for a really long period of time. They used to do this with families with gold, with real estate. They still do it, et cetera. And so this is just another asset to allow people to kind of transfer a depreciating asset dollars into a appreciating asset, hold it for decades, and then transfer that wealth between generations and ensure that this is a durable asset that will still have value, you know, 50, a hundred years from now, when you do that, then you end up building generational wealth for your kids, your grandkids, your great-grandkids et cetera. 0 (11m 51s): And so this is a story as old as time, just that this asset now is becoming a kind of the new version, the digital version of being able to do this. 2 (11m 59s): Yeah. And some of the statistics that you were bringing up in your Tom episode, I thought were shocking, which was like over 40% of people don't have any kind of investment. And then you S I think it was 80% of people have inherited wealth, which is something that I guess we haven't been told, or that's just not the common story, I guess, that we all collectively believe that we think people that are wealthy, you know, we're born that way. And it was all just like this generational wealth. And I think for the first time you're seeing normal people get extremely wealthy from cryptocurrency investments. 0 (12m 34s): Yeah. So the stats are 80% of millionaires inherited $0, 45% of them. 45% of Americans have no investible assets. They just, you know, live paycheck to paycheck, have cash sitting in their bank account. That's pretty much it on top of that. What if you really start to kind of dig through some of this stuff is, you know, take you on must the richest man in the world. Like he is an immigrant who came to America and accomplished the American dream. And people want to yell and scream and say, oh, you know, this is horrible. This guy is so evil. He has all this money. And it's like, sure, maybe you agree or disagree with whatever he's doing. But like, again, quintessential immigrant story of the American dream coming to fruition. 0 (13m 15s): And so you can go through the wealthiest people in America over and over and over again. And a lot of them came to this country with nothing and were able to build a life of financial security. And so I think that what people end up not knowing is that when you start to unpack the people who make a kind of large financial gain or become wealthy, it's not who you expect. And so another stat that people just blows their mind is if I asked you what are the five occupations that are most likely to become a millionaire, one of them you'll never get, which is teachers know. And that sounds insane. Yeah, it sounds insane. Right. But the reason is teachers get paid on average in the United States, you know, 40 to $50,000. If you work as a teacher for 20 years, you get paid a million dollars, you know, a top line salary, we got pay taxes, your expenses, et cetera. 0 (13m 60s): So how the hell do they become a millionaire? Well, most teachers basically do two things. They live well be well within their means. I didn't have a single teacher in elementary school, middle school, high school that was showing up with a Ferrari or a leased Rolex, or, you know, trying to go on fancy vacations or any of that stuff. Right. They just tend to live within their means. They're not trying to compete with their neighbors to see who looks wealthier, et cetera. The second thing that they do is that they're very, very disciplined financially. Some of that's because they actually don't make that much money. And so they don't take on huge amounts of debt. They live within their means. And what they usually end up doing is the ones that invest. They simply just dollar cost, average into simple things like the S and P 500 or the NASDAQ. 0 (14m 40s): And they don't try to get cute with going out and, you know, betting a bunch of money as an angel investor or doing any of these kinds of crazy stuff. And so they follow very timeless investing principles, decades, and they end up becoming millionaires. And so that's not the narrative, right? The narrative in society is like, oh, you've got to go build a huge company. Or you've got to go and make some crazy, you know, flashy investment. And that's how you become a millionaire. But teachers are one of the top five professions in America that become millionaires. Now, some of that also is if you then look and you compare it to, let's say doctors, doctors actually have an incredibly hard time getting into a good financial position. 0 (15m 20s): Why? Because one, they leave school after all that training with incredible six figures worth of debt that they've got to get out of. The second thing is that they are working in an occupation where there's constant keeping up with the Joneses, oh, you got a Ferrari. Now I need to get a Lamborghini. Oh, you got a seven bedroom house. I got to get an eight bedroom house. Oh, you want to go on this vacation? All right. My wife and I will go on the vacation with you. Right. And there's constant keeping up with the Joneses. And so they don't live within their means. And so when you start to think about this, it's okay, what can I learn from this? If I'm an average person, right. In everyday citizen, it's real simple, like live within your means. Don't spend more than you make, get the hell out of debt, make sure that you invest in things that will make you rich over a long period of time, stay super patient and don't do dumb shit. 0 (16m 4s): Like that's pretty much it. 2 (16m 6s): And 0 (16m 7s): Yeah, it's just, and that's been the recipe for literally decades and decades and decades. It's just, now there's all this shiny stuff that everyone wants to get all excited about. And what you end up finding is that the story of like the day traders, right? Whether you're day trading stocks or anything else, most day traders lose money. And I always tell the story of in 2017, Bitcoin went from a thousand dollars to $20,000 and went up 20 acts in a single year. All you had to do was buy Bitcoin on January 1st. And you could have sold it on January 7th or on December 17th. And you would have made $20,000. But I know many, many people who lost money in 2017 on Bitcoin. Why? Because they were buying and selling it all day long, trying to trade it. 0 (16m 50s): And what they ended up doing was actually buying at the wrong times and suddenly at the wrong times. And so what, you know, from my standpoint, it's like, unless you are an expert trader stop trading, stop pretending to do something that you don't know what to do. And instead just apply super simple principles over long periods of time. And that discipline and patients will end up actually making you way wealthier than anything else you could do. 2 (17m 13s): Yeah. And I think it's really nerve wracking for a lot of people when you see the swings, because you do want to pull out instead of just holding onto it. And like you said, that's why most people lose money is because they panic. And then they sell, 0 (17m 25s): I have a friend who I have a friend who he's got the saying, what he says is humans are really, really bad from an investment standpoint because they too, they do the two things that they shouldn't do the first is that they buy the assets that they should have bought. And they sell the assets that they're about to need. And the thought process is they wait until something goes up a bunch and then they buy it. Right. Cause like, oh shit, this is, this has gone up a bunch. Like, you know, it's and then when something falls in price, they sell it. And I always talked to, to folks about this idea of like, think of shopping, right? If you go to the store, whether you go, when you're buying hunting gear or you're going to Lulu lemon, what's the number one thing. If it's on sale, it's more attractive. 0 (18m 7s): But somehow when we get to sock market or to commodities or cryptocurrencies, when it's on sale, everyone freaks out dumping it, right? Like why, why do, why do we do that? Well, it's because we're just really, really bad at managing our emotions. And also understanding that past performance is not indicative of future performance. And so just humans are gonna be humans and, and make those same mistakes over and over again. 2 (18m 30s): Yeah. That's a really good way to rewire it. And that's what, like my husband will say to pull up his phone and be like, look in Bitcoin's on sale today. We need to go buy some. So it's instead of being in panicking and thinking he lost something, look at it as an opportunity. 0 (18m 42s): Your husband's a genius. You didn't know you're living with a genius. 2 (18m 45s): I'll tell him, you said that You have, I would say one of the things that got me super into it, because again, like I realized, and I'm realizing how much I don't know about finances. It's like, almost like the more you learn, the more, you know, you don't know one of the things that was really attractive to me when it comes to blockchain and anything, crypto is the sovereignty aspect and the freedom aspect that comes with that. And I was thinking, it's like, well, as we've seen cannabis become more and more legal. And then all of a sudden you have these banks telling you you're not allowed to buy it. And you kind of see this financial censorship, censorship starting to ramp up in like certain areas like, well, why isn't this creating more of an, a mass adoption of more of an uproar. 2 (19m 26s): It's like, I work my tail off to make this money. And then you're telling me where and how I can spend it, because it doesn't align with whatever law or principle that you might have. So I guess when it comes to crypto and being able to have that sovereignty, like that's where I get really interested. And then you see a lot of the conversations happening a lot right now with what's happening in Ukraine and Russia and people talking about regulation. So how does that work with, I guess with that sovereignty? Like, is there a way to like regulate it to the point where it's no longer what we think it is? 0 (20m 2s): Yeah. I mean the whole key to money in general is that for thousands and thousands of years, the government didn't control money, right? It, it was commodity based and you, in my opinion, have a right to fundamental financial privacy. I don't believe that there should be the violation of any one person's rights, even if it's in a, kind of a good attempt to stop bad actors, et cetera. And it's the duty of law enforcement, the government and, and other organizations that if there's people doing bad things, they should stop those people. I think most people in society say, Hey, we don't want criminals. We don't want terrorist financing. We don't want money laundering, but that doesn't mean in your pursuit of stopping those individuals, that you should violate my rights. 0 (20m 45s): Right? And so I think financial privacy, financial is a huge piece of it. Now we have this today with cash. And one of the things, as we know from digital technologies is there's a trade off between, let's say privacy and convenience, right? If I said to you, Hey, you should go on the internet, but make sure that you don't give up any of your information. It'd be super inconvenient. Would you be real private? And you'd be real secure. And so what do we do? We're like, ah, you know what? I'll give Facebook my contacts, cause they're going to make some recommendations to me. And it's going to tell me my old friends that I should connect with. Right. Oh, you know what, when I go to this website, I know they're tracking me with cookies, but like, you know, I really want to go check the news or I really want to go check this website. And so we trade convenience for a lack of privacy or lack of security, same thing now with money is that I could use physical cash, right? 0 (21m 32s): If I really want it to go and use my entire life and be untraceable, I could only use physical cash, but all of a sudden I can't use Amazon. I can't press a button and no one's going to deliver me food anymore. Right? Like all these things that are so convenient, they disappear. If I simply want to use the most privacy protecting version of the currency. And so what I think these digital technologies bring is a return to some degree of financial privacy, but they do it in a way that is very unique. And I think one of the stories that is very under discussed in, in Bitcoin cryptocurrencies is that Bitcoin's network allows for an immutable public ledger, meaning that all the transactions can be seen at all times by anyone. 0 (22m 14s): It can be audited by anybody all the way back to the start of, of the system. But what it allows for whether it's law enforcement, whether it's other agencies, the government politicians, whoever they can evaluate every single transaction without you having to reveal your identity. And because they're able to do that, it now protects your individual privacy. At the same time, it allows them to go find the bad people that they're looking for. And so that's a really, really unique kind of mechanism that Bitcoin brings to the table that other forms of digital cash don't now with that said, I think that the central banks and the politicians, governments are going to launch these central bank, digital currencies, they're gonna take the dollar and they're going to say, Hey, it was physical. 0 (22m 54s): And now we made it kind of electronic. And now we're going to move it to this truly digital tokenized form, a central bank, digital currency. But we got to make sure that they don't invade privacy, that they still allow for all of the same elements of physical cash to be used in this system. Because if they just say, you know what, screw it. We're going to let you guys do whatever the hell you want. And they're going to turn this into a surveillance tool. If all of a sudden they say, Hey, every single time you go to spend money, we know who you're spending it with. How much when, what you bought, who wants to live in that world? Not me. And so I always go back to, you know, for hundreds of years now, there's been everyone from our countries for fathers, all the way to many people who are just thought of as a, as great thinkers and philosophers, et cetera. 0 (23m 38s): And many of them have said some version of, we want to live in a society where the government fears, the people, not that the people fear the government. And that's a really important nuance take that I think has to be applied to a lot of these technologies or else we're going to end up looking like one of these authoritarian governments that we see in Asia or somewhere else. And that's just not a society we want to live in. 2 (24m 3s): Yeah. And when you talk about the centralized bank, digital currency, I've heard the word programmable often linked to that. And that sounds absolutely terrifying. So the idea that you could only spend that on whether it's bread or you only have a certain amount, a lotted for red meat or for gas, or what have you, whatever political agenda, that's kind of tied to that coin. So is there a way that if that's what they want, so let's maybe do I do this thing, which is like the little finger. Did you ever watch game of Thrones? 0 (24m 32s): No, I did not. 2 (24m 34s): So there's this one exercise that one of the bad guys has, and he's, it's kind of his tool for assessing people and problem solving. And like foreshadowing is, he'll be like, well, what's the worst thing that this person could want. So you could do like the best version or you could do like this darker version. So it's like, if you were to do like, what is the worst thing that they could want out of this programmable centralized currency? Is there a way that you would be able to essentially make Bitcoin illegal in this country? Like other countries have done because you want to push that programmable coin. 0 (25m 2s): Yeah. So there's three things that are, that I think are worth touching on. So one programmable is not good or bad. It's how it's used, right? Like everything's programmable, right? You're the music that you listened to in some way, the playlist is programmable because you can go in and you can change what's on the playlist, et cetera. So, so I think programmable alone is not good or bad. It, but definitely what we're talking about here is a bad use of that. The second thing is making Bitcoin illegal. Sure. They can make anything illegal. They could make breathing illegal, but it doesn't necessarily mean they can enforce it. Right. And Bitcoin can't be shut down as a decentralized system. They're never going to be able to shut it down. They know that they've openly talked about it on the congressional floor and Senate hearings, et cetera. And so what's more likely to happen is they will try to regulate it. 0 (25m 43s): I do not think they'll make it illegal, but they, maybe they increase taxation on it. Maybe they try to create some sort of, you know, nonsense regulation around the periphery. But for the most part, I think that politicians realized just like citizens, corporations, and financial institutions, Bitcoin's good for business. And you see a lot of politicians right now, Cal towing and, and kind of pandering to the Bitcoin community, which is what Bitcoin has been saying for a long time, right? Is this is where economic prosperity is coming from. This is where job creation is coming from. This is where economic value is. Whether they like it or not. People from the crypto world are some of the richest people in the world now. And they either get on board or they're going to get voted out. And so that's just how it works. And by the way, that's how it's worked forever is they always want to, you know, cozy up to the rich people because the rich people can help them stay in office. 0 (26m 30s): And so I think all that's happening now, if I go to your, your exercise here of like the worst case scenario, I'm scared to even talk about this. Like, I don't want to give him any ideas, but basically what they could do is they could digitize the currency issue is central bank digital currency. It would be a dollar just like it is today, but in this new technology form factor. And then there's, there's really two specific things that I think are concerned or maybe three things. The first is personalized monetary policy. So they could say, you know what, a pump, you don't spend enough money. You, you, you, you hoard money, right? You're you, you are trying to continue to keep that money. 0 (27m 11s): So what we need to do is we need to punish you for doing that. The way we're going to do that is we're going to give you individually or really, really high inflation rate your inflation rates going to be 20%. Now I'm like, shit, I can't hold this currency. I'm losing 20% of its purchasing power. Every single year. I'm gonna get the hell out of this thing. Whether I go invest, I consume, I do whatever I'm going to get rid of it. But they say, Candice, you know what you're doing? You're not saving enough. We're actually going to give you a 0% inflation rate. We're going to incentivize you to go ahead and actually save more hoard more of the money. And so when you think about that system, that sounds innocent at first, but like, it can be abused in so many different ways. And so personalized monetary policy is like a really, really scary thing because right now we have a one size fits all, whatever the one system is that they go ahead and do from policy standpoint, everyone is affected equally by that, in terms of their money. 0 (28m 1s): If you start to personalize it, which I definitely think they're going to do, there's nasty shit there. The second thing they can do is they can do money that expires. And we have a form of this in the United States right now, which is EBT cards or, or food stamp type social programs. What they basically do is they say, Hey, we're going to give you a certain amount of money. That money is going to be given to you on a preloaded card or some other form. And you can only spend it on certain things. So food stamps, for example, can be spent on food that you have to prepare, but you can't go and actually spend it on pre-prepared food. So we, we kind of tighten up the focus on what you can spend on. And then if you don't use it in the first 12 months, you lose it. 0 (28m 43s): And so if you end up, actually let's say, I don't know, I'll use easy numbers. They give you a hundred dollars and you only spend 80 a month. And it continues to roll over month. Over month, over month after 12 months, if you haven't spent that money, they take it from you. It blows up. It goes away. And so that I think most people say 12 months, isn't really a short period of time. It's only for this small segment of the population, et cetera. Okay. Well, what happens when they extrapolate that? And they say, we're going to get $1,200 stimulus checks to, you know, majority of the population. Oh, by the way, if you'll spend the next week, it disappears. What if they then start to say, you know what, actually, when you get your paycheck, we're going to simply have that money expire. You spend it in 30 days or lose it. 0 (29m 24s): And again, those are extreme examples, but like that is the world we're moving towards. Once they have this new technology where they can basically implement that type of stuff right now, they can't do that. They have no technical ability to do it with a central bank, digital currency they could. And then lastly is we start to get to this world where they say, okay, not only do we have the expiration of money, not only do we have personalized monetary policy, but we're just going to go full on China. And we're going to create a social credit score system. And we're going to say, Candice, you've been eating too much candy. You can't actually get in your car today. You can't buy gasoline. You can't get on the bus. You have to walk. Or they say, Pomp, you know what? You can't actually go to the movies because you didn't exercise today or pop, you know what? 0 (30m 6s): You've actually been eating too much of a certain type of food. You can no longer get that type of food for 30 days. And people are like, oh, this is crazy. There's no way they're going to do this stuff. Well, like they literally just used a health crisis to start to implement some of this stuff. Right. You can only go inside of a restaurant if you've done ABCD things that we've asked you to do. And so again, that is a very specific use case where most people will say, oh, it's a health thing, right there. There's an impact you have on other people. Like I'm okay with doing that. And whether you're okay with it or not, I think they can at least see a path where a majority of the population is like, okay, I get it. But what you quickly get is a slippery slope where they continue to erode your, your rights, but also not only do they continue to erode your rights, they get emboldened and they start to implement this in more and more ways. 0 (30m 57s): And so when you start to think about that world, again, that's not going to happen overnight, but the single piece of technology of implementing a central bank digital currency allows them now to have this widening aperture of all the crazy shit they can do. And if anything that we've learned over the last two years is like, we don't need to be giving these people more power, more ideas, more, you know, kind of tools in their toolbox because everything that they seem to touch gets screwed up. Instead, what we need to do is we actually need to be using the technology to prevent them from doing the dumb shit. And it's both sides of the aisle, right? It's like, you know, there's always this like divide divisiveness and in America, specifically around Republicans, Democrats, whatever, if you actually look at it, they all do the same shit. 0 (31m 37s): Right. They all make all the big promises. They don't do anything. And so ultimately I think that's where we're headed is technologists are going to start to step in and build technologies that are immune to the chaos and the craziness on if that's a good thing for a, for society in general. 2 (31m 52s): Yeah, I think so, too. And like it was mentioned earlier in the podcast, it's like, we tend to think of like short term solutions that end up maybe creating longterm problems down the road. And at the end of the day, these politicians are just people and they're not there forever. So if you're okay with one person doing something like, well, they have my best interest in heart at heart and they would never do X, Y or Z. Well, they're only there for however many years. And then they get replaced by God knows who, so creating these preventative hurdles, if you would, to kind of protect the citizen and the consumer just makes the most sense to me, but it just sounds so alluring to cause you know, that if, when they do go to kind of convert everything to a digital form of currency, that there's going to be some incentive like we do right now with selling our information online. 2 (32m 36s): It's like, well, if you just give me this, we'll give you a signing bonus. Or if you just give us all of your personal data, access to your daily activity, whatever it is, then you get a bonus. So it's like being just, I guess, hyper aware of those things to kind of protect yourself if that makes sense. 0 (32m 51s): Correct. I, I I'll take it even a step further, which is, there's actually positive benefits to central bank, digital currencies as well. Right? If you go back to the pandemic, like these people literally cut physical checks and then mailed them to people like, whoa, like it's 20, 22, or, you know, at the time 2020, like what, what is going on? How are, how is that the technology we're choosing pen and paper essentially. And physical mail, like might as well just send smoke signals. So when you think about that, it's like, yes, having a digital form in the central bank, digital currency to immediately get funds into people's hands in an emergency situation, that would have been a more technologically superior way to do it. But as with everything, there's trade offs, there's good things and bad things that come from it. 0 (33m 34s): And my personal concern is that the positives are outweighed by the negatives for the average person, but the positives are going to be the story that sold to them. And they're going to actually cheer on the adoption of this stuff as it happens. 2 (33m 49s): <inaudible> so, oh man, there's like so many places to go with that. I guess if we get, so the central banking, digital currency becomes like the main priority for someone else who's running, let's say like in the next election cycle, do you think that that's going to be a really big conversation for either side of the aisle? Like there's no way to kind of ignore this path forward to crypto or do you think it's not going to, it's not there yet. It's not like a formidable opponent enough to the current Fiat that it's not going to be a conversation. 0 (34m 21s): I'm like a normal dude grew up in North Carolina. There's zero reason why I should know any politicians talk to any politicians, do anything with politics. I think it's all stupid. I've talked to more politicians because of Bitcoin and cryptocurrency than most people will ever in their lifetime. And some of them are a very, very big proponents of it. So there's current politicians, you know, Senator Lummus Congressman Emmer Congress in Davidson, you can just go to the line. There's a ton of them, both sides of the aisle, Republicans, Democrats, independents, everybody. But the current politicians, aren't really this story. The current politicians, I think people know where they, where they are Elizabeth Warren H crypto, right? 0 (35m 1s): Somebody like a RO Kano or Senator Lomas, et cetera. They like crypto. Okay. Got it. It's the challengers, the people who are the candidates for these political offices now, every single one of them in the country that is running on some kind of pro Bitcoin pro crypto, you know, platform, they're all reaching out to the crypto community. And they're like, look at me, look at me. I'm, you know, I'm pro this, I'm pro this. And the first one, I was like, wow, that is awesome. The second one, I was like, oh, that's cool. By the like fourth or fifth one, I was like, all right, I got it like this. Like, this is now going to be a thing that they all have to do, because if you're anti the technology, you've got zero shot of winning. 0 (35m 45s): And so now you, you basically get like the social pressure, right? Where like, you know, as with most technologies, if you went into the, you know, I don't know the house of representatives today, and you said, all right, everyone sit down and you're gonna have to take a test on technology literacy. 80% of them fail either like right out, right out of the gate, they all fail. And some of it's because they just are out of touch with it. Some of it's because they don't have time. They're doing other important things, whatever, for whatever reason, they just, they're not very literate when it comes to a lot of this stuff. But the young people who are running for these political offices now they are literate in many of these technologies, but are they actually illiterate in the true value of it? 0 (36m 25s): Or they simply literate in the talking points of, oh, Bitcoin is good because, you know, I read somewhere that I'm supposed to say this so that I can get elected. And that's the big question is, is we don't know. And you've got to do the work to figure out each individual candidate. So it's no longer a kind of an outlier platform. It's no longer something that really, you know, makes you stand out. It's now become a consensus type view that you have to have, because if you run on any other platform that is abrasive to the industry, you're just not going to get elected. 2 (36m 55s): That's interesting. Cause I still was kind of, and I'm not like super deep into that world on either end. It's just kind of what gets fed to me on my Twitter feed. So when I see someone talking about it or I'll hear about like a popular politician that I maybe thought was like really old school and just out of touch and they're like pro pro Bitcoin, I'm like, that's so fascinating. Like they have this huge shot and advantage. And I didn't know that there was just kind of like the normal, concise consensus that they have to kind of be on board or not, which is also, I think it's so interesting that Elizabeth Warren is so vocal about being antiques. And like that just seems like you're the outlier in that and holding that position. 0 (37m 32s): Yeah. I mean, she, she has some unique views. I, I don't agree with her on very much. And I, I, I know that she's intelligent because I've seen a lot of the work that she's done pre her political position, and it is impossible for you to conclude that she is dumb from that work. And so you begin to wonder how much of the current positions is attention seeking or grand standing versus things that she actually understands. Right. And a perfect example is probably famously or infamously. She came out and said that grocery stores were price gouging and you know, grocery stores have a 3% profit margins, literally one of the most horrid kind of razor thin margin businesses to compete in and to pick on them of all companies. 0 (38m 25s): It's just kinda like, alright, you know, you just can't possibly believe that if you've taken a half a second to do any research on top of that, if you rail the wall street kind of financial firms and say, Hey, you guys have no transparency, no one holds you accountable. We don't know what you're doing. There's too much risk in the system. You're not a collateralized know all these things that she's been saying for a decade, which by the way, she's right. She's, it is true. What is she saying there? But then you can't turn around and then rail against the crypto people or the Bitcoin people and say, you know, Hey, you're your bad actors, you're this or that, whatever. She's essentially just copying and pasting her complaints against the legacy financial system and then bringing it to this new world. 0 (39m 9s): But if you understand the difference in, in how it's structured, actually these technologies solve those problems. She should be the biggest proponent of them. And what I wonder is, is it just because she hasn't done the work yet and eventually she will kind of capitulate and become a big supporter? Or does she see this as an opportunity similar to, you know, my buddy, Peter Schiff who loves to yell and scream about Bitcoin, but he's marketing. Right? He understands he's getting entertainment from it. Yeah. 2 (39m 33s): Yeah. I was like, I bet you, he holds a bunch Bitcoin and no one, 0 (39m 38s): I, I genuinely don't think he has any Bitcoin. I think he would have told me at this point if he did, but I do also know that he, he very much understands when he attacks Bitcoin. It is good for Peter shift's business. And so it makes sense. 2 (39m 52s): His threads are, that's the best part. Like not even his tweets would just see everyone kind of like refute whatever he's saying in there. I feel like I learned so much in there, but he'll my favorite meme was like Peter Schiff. And it'll show a graph of all the years going by supporting gold and then showing Bitcoin, comparatively, and then the spike. And then I'm like, it's 20, 65. And Bitcoin is at, you know, $3 million. And he's still saying it's a scam. 0 (40m 20s): He trusts me. He will definitely still be saying it as a scam. I, I, I continue to tell him that the day he capitulates, it will be one of the big milestones of the Bitcoin community kind of having fun on the internet. So he should go ahead and just get it over with, but I don't think that's going to happen anytime soon. 2 (40m 36s): No, I agree. That would be amazing. So I wanted to ask you about, you're doing like a masterclass on crypto, right? Or is that launched? 0 (40m 46s): Yeah, we, we basically train a ton of people and then help them get jobs in, in, in the industry. 2 (40m 52s): Okay. So is that open to anyone? Is it kind of like, like a one-on-one or is it specifically people that are trying to find work in that industry? 0 (41m 0s): Th there's basically three people that go through it originally. It was just for people who wanted to get a job, but we had a number of people who kept joining. Who's just said, Hey, look, I don't actually want to get a job, but I'm trying to be a better investor. I'm trying to understand the space better. So like the information is still valuable to me, if it's good enough for me to go get a job in the industry, then that's helpful. And then there is a slight minority, a third group, which just cracked me up. But every single time we do it, there's always a couple of people who are like, you know what, man, you know why I'm really here? My husband, my wife, my girlfriend, my boyfriend. They're just tired of hearing me talk this shit. And I just wanted to find some other people who wanted to talk about. And so the, the focus is definitely on getting people educated so that they can get a job. 0 (41m 43s): We've had people get hired at Coinbase, Gemini block by crack in Anchorage, dry BTC, ink, et cetera. Just pretty much all the major companies in the space, but there are some people who joined for, for different reasons. 2 (41m 55s): Oh, that's hysterical. I should definitely send my husband there because he makes me dizzy sometimes. And I'm like, this is so over my head, like I get tiny little crumbs of what you're saying, and I need to go do my own digging before we can have like an even exchange or even somebody picks, like, go find your people. 0 (42m 14s): Yeah. He's taking advantage of your lack of knowledge. That's all right. 2 (42m 17s): Oh, absolutely. So yeah, this was, this was incredible. I don't want to take too much of your time. Do you want to tell people where they can follow you, support you in any projects that you're working on? 0 (42m 28s): Yeah. Just go, well, Twitter is the easiest place. If you just go. I think my handle is at a Pompliano on Twitter. Just go there and you'll find everything else from there. 2 (42m 38s): Awesome. Thank you so much. 0 (42m 41s): Absolutely. Thanks for having me. 2 (42m 42s): And that's it for this week's episode. Thank you so much for tuning in. If you enjoyed the podcast, please share it with a friend two or three. And if you have a second leave that five star review. That is the thing that helps us out the most when it comes to charting on the podcast. Podcatchers and if you are watching this video, please hit that like, and subscribe on YouTube. I will see you next week.