Crypto and the Culture

In this episode, John explores cryptocurrency and gives his take on it. Is it opportunity or organized confusion? Tune in to this episode to find out!

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Welcome The Money and Wealth with John Hobryant, a production
of the Black Effect Podcast Network and iHeartRadio. Yo, Yo,
this is John Hobryant and this is the Money and

(00:20):
Wealth podcast series on Black Effect Network on iHeartRadio. I
want to thank you for making this one of the
top one hundred podcasts for business in the country and
top forty podcasts for entrepreneurship in the country. It shows
that this is the aspiration generation. We are about the opportunity.

(00:44):
The color is not black or white, or red or blue.
The color is green. We want some more of it.
Oddly enough, were talking about the color green. We we're
talking about colorless green or colorless currency. In a minute,
we're talking about digital currency. He's a crypto currency's on
this episode. This is going to be hot. As people
are hot about this topic. They're fast, they're passionate about
this topic of cryptocurrency. So I figured I'd just finally

(01:07):
deal with it. So let's uh, let's get into this.
Tell all your friends to check this out. Sit around
the coffee table or your coffee maker, or your fraternity
or sorority club meeting, or your links meeting or your
boulet meeting or whatever meeting you guys go to or

(01:29):
have on a regular basis, and let's have this conversation.
Let's get into this now. Whenever folks get all emotional
about something, I know there's a problem and that needs
to be sort of worked out. And folks begin every
time I bring up the topic of cryptocurrency, even just innocently.
I just did a Forbes Black interview, my brother Jabbari

(01:50):
Young was editor in chief, and I just I just
covered this, I think in the most neutral way possible.
And folks in the comments just they outtake pieces, just
going all in, just selling me, I guess on cryptocurrency.
Whenever you start selling me on something, I'm concerned. Whenever

(02:13):
anybody gets defensive or emotional, I'm concerned. Whenever you make
an emotional decision, it's going to be a bad decision.
We make this very very clear. I'm not against cryptocurrency. Now,
this was already in it a two minute mark on
this podcast. So you want to spread something, spread what
I'm actually saying. Okay, I'm a repeat it one more time.

(02:35):
John O'Brien is not against cryptocurrency. I hope it's successful, right,
and I love innovation. In fact, I'm a promoter, a promoter,
I am an advocate for a believer in blockchain technology.
Many of my friends are involved in this space, from

(02:59):
the well known individuals like Anthony Scaramucci, who is on
Wall Street and has done a great job with this too,
Folks who are fairly new in this space but very credible,
like Carry Lynn here in Los Angeles where I happened
to be right now. There are just a number of
folks who are trying to educate people who are trying
to do the right thing. They're folks who made money

(03:22):
on cryptocurrency. My wife, Shatra has made money on bitcoin.
She goes she U was an early investor. So but
you know, my wife has me in case things go
south of the border. And I keep saying that, folks,
don't bet your rit money because well, this is not
traditional investing. This is at most investors speculation. Again, nothing
wrong with that as long as you acknowledge it for

(03:42):
what it is. So let me get I mean in
my normal style. Let me just be direct, so you
know everything's gone digital. Okay, I'm gonna break this down
as simple as I can the next forty five minutes.
And if you want to quote me, quote me in context, right,

(04:03):
why people go to dating apps? Okay, what's the purpose
of a data dating app? The dating app is digital now, okay,
so you're in a dating app. There's a number of
these dating apps. What's the purpose of the dating app?
To meet someone? Hold on in person? So you're using

(04:26):
the data app, the dating app to actually meet a human, right.
Why is this relevant to this conversation? What if I
told you that the overwhelming purpose of cryptocurrency is to
get cash And I'm not jamming anything up. I'm just

(04:50):
trying to be real with you and and to like
cut to the quick, the vast majority of cryptocurrencies are,
in reality, trying to get to a cash basis. They're

(05:12):
trying to cash out with US currency. That's just the reality.
So let's start with that that this is not some
panacea of a new I'm gonna deal with. I'm gonna explain.
I am going to explain explain what an actual currency

(05:36):
a currency is. But let me be very clear about
what the promoter, the goal of most cryptocurrency promoters happens
to be, and the I'm gonna talk about how many
cryptocurrencies there are and which ones are successful and all
that stuff. So again, I'm going to give you both
sides of this conversation. Uh. The goal of most cryptocurrency
promoters and early investors is to eventually exit or cash out,

(06:03):
and what's called fiat currency in this case is usually
the flight to quality in the world, the US dollar.
Here's why crypto is still pegged to the US dollar
psychologically and practically. Even though crypto is marketed as an
alternative to fiat money physical currency the US dollar as

(06:28):
an example, its value is almost always quoted in dollars.
What do I mean by that? People don't say. Oh,
by the way, bitcoin is an example of so far
a very successful currency. And somebody came to my comments
were like, yo, man, you're wrong about bitcoin, Like it's
adopted by Olive Wall Street. Not true, Okay, it's been

(06:49):
adopted by the way, by a Wall Street firm. I
believe it's black Rock. You see the black Rock or Blackstone.
Somebody will clearly correct me in the comments. I'm doing
this by memory. They have ninety five percent of all
of the inventory of crypto, and they have that inventory,

(07:14):
by the way, on behalf of their customers who supply
and demand. Who said they wanted it, so they have
the currency because their clients pretty much demanded that they
would demand it, requested that they keep it from in trust.
So it's not like in this example the company went

(07:35):
and bought these currencies from making a market on it.
They're responding to customer to demand, which is encouraging by
the way they're responded to customer demand, and they're keeping
this currency. So again, the concept that Wall Street has
now fully adopted bitcoin, it's just not true. It is
true that there is a major Wall Street firm that

(07:55):
is now holding bitcoin, lots of it, relatively speaking, in
trust for their clients. People don't say I'm gonna buy
one bitcoin, or say one bitcoin buys one thousand loaves
of bread as an example. They say bitcoin is worth
sixty thousand dollars. You say, what's the point, Well, you're

(08:17):
tying it to not an exchange bit tied to a
stable valuation. You're tying it to a well, the US dollars.
When I just I was just saying crypto crypto wealth
is only real wealth when it's converted. Gains are on
paper until converted to fiat money. You can spend, invest

(08:39):
or pay taxes with fiat money. Again in this example
US currency. Some people say, yeah, well, there are there
are people where there're places where you can actually exchange
this with vendors and bartering trade. Essentially, yes, this is true.
I'm talking about for the masses, for the classes, for
the general public. Okay, you know you cannot go to

(09:01):
the store, any store and look at a stable price
and say this is I'm going to exchange this cryptocurrency
for I want to get that robe, I want to
get that brush, whatever, and it's the same price. In fact,
the prices will change at this moment daily. We'll get
into this. So the gains are on paper until converted

(09:22):
to fiat money. A ten x gain in say ethereum
means nothing if you can't use or convert it into
a stable, acceptable form of value. So the extra strategy
is the US dollar. Most early adopters or project founders
hold or sell tokens during a price boom and then

(09:45):
convert to cash or assets like a home or a
business right that accepts the currency. Some even raise So
if you're having a problem selling your house, you might say,
or if your business, hey, i'll accept Cryptocurrency has another
form of value because they believe in it. Okay, a

(10:05):
ten x gain in the ethereum means nothing if you
can't use it to convert into a stable, acceptable form
of value. So some even raise funds in crypto and
immediately convert to US dollars to protect against volatility. Okay,
that's just funny to me, right because this sort of
isn't that the point that you're getting away from the

(10:26):
US dollars? And that's sort of the point of the
matters because the cryptocurrencies came into into fashion after the
global economic crisis really of two thousand and eight. People
rightly so, were upset with the mainstream economic system and
they wanted a better or a different system, and so
they really came after they said, well, cryptocurrency is going
to be the way that I leveled the playing field

(10:50):
and create another alternative financial system. And again I'm gonna
get into why this is important in the moment. So
it's created in the moment of emotions. I've already said
you never do anything based on emotions. That doesn't mean
it can't work out, right, but it means the start
because it was based on emotions and not you know,

(11:12):
just trying to solve a business problem. It means that
you've got to uphill battle sort of ready fire aim.
Crypto has a speculative vehicle. Okay. The game for many
is not building a new financial system. It's getting rich
quick and exiting before the thing crashes. Right now, somebody said, no,
things don't this crypto doesn't crash. Just hold on a minute.

(11:36):
We're only in this eleven minutes and I'm already breaking
eggs and upsetting people. Yes, cryptos have mostly crashed, right,
are the survivors? Are there folks who have been very successful? Yes?
All right, but there's over twenty thousand cryptocurrencies okay in
the last ten years, and ninety five percent of them

(11:58):
are done, crashed, failed, poop, poop gone. All right, it's
not my opinion. This is just the facts of the matter.
So you see the rug pull. They call these thing
rug pulls where you pump and dump in these pump
and dump schemes where the goal is to leave with

(12:19):
Fiat wealth, right, not build lasting cryptocurrency. So you pump
this stuff up, you get somebody excited about this thing,
and then you and then you you bounce, all right,
you leave and leave other folks sort of holding the bag.
If cryptocurrency was the revolution, why does everybody still want dollars?

(12:41):
It's a question. So that tells you that the game
is not about changing the system. It's about gaming the
system and getting out before it breaks. Now, these are
these are the promoters. Okay, these are not the legitimate people.
They're legiti I've already said there's legitimate folks that are
that are market makers, legitimate market makers. Anthwery Anthony Skermuci
is but one that I trust who I know personally.

(13:03):
There are others that are legitimate. There are educators, and
I mentioned one of those educators that I trust, uh
in this conversation. So uh, let's let's get into this.
Cryptocurrency was supposed to be the great equalizer, So why
does it feel like the wild wild West. A billionaire

(13:26):
friend of mine was at a major conference, Milk and
Global Conference last year, I believe it was, and he's
you know, he's not He's not, you know, a boring guy.
He's a proper entrepreneur, a proper businessman. He's willing to
look at anything that makes any sense. He said, like
the two hundreds, which is a man of the world.
And somebody asked them about cryptocurrency. He said, this is

(13:47):
very simple to me. If somebody can tell me why
the value goes up and why the value goes down
of cryptocurrency, I'll buy some right, and no hands would
up because nobody could could explain it. Let me tell
you what you can't explain why certain folks have responded

(14:08):
emotionally to this because they don't trust the government, they
don't think the financial system has worked for them. Both things.
They're you know, legitimate reasons for this, and so they
sort of played on the promoters that played on the
emotions of certain groups. So you didn't play on the
emotion of my billionaire friend. But check this out, Uh,
twenty five percent of Black Americans just about have invested

(14:32):
in crypto, much more than white Americans. So this was
such a great deal. Why are all the saphistic so
called sophisticated white folks in the country who are make
up most of the stock market, right, why aren't they
paling in to cryptocurrency. Again, I'm not saying not to
do it. I'm just saying they haven't done it. That

(14:54):
twenty five percent of Black Americans of all black Americans
have invested in crypto, so scare number when I tell
you what comes next. Nearly three and four crypto investors
lost money in twenty twenty two. Hello, I just like
math because it doesn't have an opinion I'm not getting.
I'm just giving you the facts. You make your own decision.
By the way, I've had I have an account, had

(15:16):
an account with crypto. I just wanted to see what
would happen. I'm a pretty good investor whatever. Anyway, I
bought it. I bought the crypto, and let's sit there
and then at some point, I, you know, close the account.
I lost money, but my wife made money, Okay, which
is why I'm getting to the point of saying, don't
use your rent money for this. So I'm not telling

(15:36):
you not to do it. I'm telling you the investor
of speculation, not proper investing. Okay. Of the twenty thousand
plus cryptocurrency currencies launched in the last decade, fewer than

(15:56):
ten percent are still active. Hello. So if you had
you know in your neighborhood ninety percent of the businesses
failed in five or eight or ten years, would you
say that's a stable and investing environment or would you
say that's it feels like the wild wild West. Something's

(16:17):
going on. That's what I'm telling you here. That ninety
percent of these things have just poofed gone and somebody
made some money and left. And I call that a
Ponzi scheme. Somebody made, pumped, dumped, and left and then
left somebody else holding the bag. This but this episode
is not about fear. It's about financial facts and future
proof in your mindset. If you if there are people

(16:39):
who've done very well crypto and the folks who've lost
their shirt, I don't want you losing your rent money.
If you want to quote something, quote that right, so
that we're real clear on what I'm saying. I just
I'm just trying to give you financial literacy so you
make the best decision for yourself. According to Pew Research,
twenty five percent of black adults, twenty three percent of

(17:02):
Hispanic adults, and seventeen percent of white adults so they
had invested and invested in, traded, or used crypto. Okay,
So the vast majority of this market, like half of it,
are people who are locked out, who feel locked out
of the traditional financial system, and we're looking for some
other way to get paid, get rich, get over whatever.

(17:23):
And I believe somebody have been playing on there. What
emotions and lack of financial literacy. Black Americans adopted crypto
faster than any other group, in my opinion, driven by
mistrust in traditional banks, barriers to stock market entry, and
a hunger for financial independence, which is, by the way,

(17:45):
an admirable thing. I love those as motivations. I just
don't like what the answer is. So crypto promise lower fees,
no middleman, global payments with no discrimination, fast profit in
an instant world. I hate that last one. Fast profit
than in an instant world. But access without understanding, it's

(18:06):
not empowerment, it's exposure. Hello, can I get an amen?
Access without understanding it's not empowerment, it's just exposure. So
let's let's get into this next piece. You can't win
the game if the rules keep changing. Okay. This is
data from the Federal Reserve and CNBC. Nearly seventy to

(18:27):
seventy five percent of crypto investors lost money after market crashes.
You're listening to me. Seventy to seventy five percent, So
seventy is the smallest number of crypto investors lost money
after market crashes. Black investors were more likely to invest
late and be hit harder. Hello, because we well, we're

(18:51):
writing the speculation, we're looking at the headlines, we're hearing
and stuff, and then somebody knows that we're emotional, and
we're going to come in and provide. I had an
exit for the folks who are trying to get out
and go to what fiat currency? Cash out with cash.
So here's the wild West warning. Over twenty thousand cryptocurrencies
launched since twenty thirteen, fewer than fifteen hundred to two

(19:14):
thousand of these currencies have meaningful value or any activity
at all today. Some estimates. Some estimates show that between
ninety and ninety five percent of all coins failed are
becoming active, failed are becoming active or became an active. Sorry,
we'll give you some examples. The Lunar Terra collapse wiped

(19:36):
out sixty billion dollars in value. That's real money for
consumers and investors. The ftx crowd affected over one million customers,
including friends of mine who were involved with this, many
small investors, including working class and minority investors. In fact,
my friend Anthony Skermucci apologized for this particular thing. He

(19:56):
thought he was very sophisticated and got took by a
a professional scamster who looked innocent as snow is snow
white and ended up being the thief and the thief
in the darkness. So again, if a neighborhood that twenty
thousand businesses open and nine percent failed, you wouldn't call

(20:17):
that an economic empowerment story. You call that a trap. Right,
So understanding, let's understand the technology that and what's real
and what's not, and how crypto actually works. So blockchain
is a public, decentralized ledger, right, like a transparent notebook

(20:41):
in the cloud. Right. I like blockchain be very clear, Okay,
most proper cryptocurrency use blockchain technology. I think blockchain is
going to become very valuable. Bitcoin is considered by many
many to be digital gold. It has limited supply and
is decentralized, and there's a maximum number of blockchain you

(21:05):
can mine. So I like that. Ethereum's programmable blockchain for
apps and contracts, all coins, thousands of tokens, all right,
with often no utility or business model. Stable coins listen, now,
this is an attempt to peg value to United States

(21:28):
a dollar. This is an attempt stable coins are an
attempt to to peg the value of cryptocurrency to United
States currency or another currency again fiat currency, an exit
through US or other viable cash mechanisms. Again with a

(21:51):
purpose of dating app to meet a woman our guy
in person, what's the purpose of cryptocurrency? Oftentimes is to
get cash on the back end. So let's not playing
a game. It should be honest what we're doing. There's
no FDIC insurance, no call centers, no undoe button. You
hit the wrong button, you lose your password. Whatever, it's
not a good day. Crypto is not evil, okay. But

(22:14):
a hammer can build a house or can bust you
over the head. It's all about how you use it right.
A knife can butter bread or cut your throat right
or cut your risk. It just depends on how it's
used right. So opportunities still exists, but only for the prepared. Right.
So long term innovations require long term thinking. I don't

(22:38):
like this whole you know in it to win it,
you know, make money fast. If something looks too good
to be true, it normally is. They underline technology, blockchain,
smart contracts, tokenization. They're real and revolutionary in many ways. Right,
and by the way I'm explained between digital currency and cryptocurrency,

(23:01):
so hold on for that legitimate long term players. I
think bitcoin is a legitimate long term player. The ethereum
ecosystem is considered I think a legitimate long term player.
Blockchain infrastructure companies legitimate long term players. But the rules

(23:21):
of investing still apply dollar cost averaging, portfolio diversification. Only
invest what you're willing to lose. Ie, don't lose your
rent money, right, don't bet your rent money. Most black
investors going into crypto twenty twenty two, twenty one at
peak high prices. That means most bought high hello and

(23:46):
sold low. Here's some street rules for crypto. And here's
a key concept. The underserved communities that I come from
and that you understand so well, can't afford to gamble
with what little we've got to play with in the
first place. We must invest with wisdom, not emotions. Here's

(24:11):
some street rules. If you don't understand it, don't invest
in it. If everybody, if everyone's getting rich quick, someone's
about to go broke slow. If everybody's getting rich quick,
somebody's about to go broke slow. I don't want it
to be You use crypto to learn how to understand

(24:33):
this new innovation in this system, but don't lean on
it to try to think you're creating a new system.
I had said that very slowly because I want anybody
thinking again that I'm doubting crypto. I'm saying it's a
wow wow West Like, you can't lean on something that
might fall over. And if ninety percent of anything that's

(24:54):
tried fails, well there's a nightcent chance that you're going
to lean on it. It's going to fall over. May
be okay, right, you go to Las Vegas. You might
hit it big. Just remember that Las Vegas, the buildings
keep getting hitting larger with every plane that goes in
and out of Las Vegas. You know, yeah, people hitting big,
but somebody's losing their shirt. You got to ask yourself,

(25:15):
is this wealth building a wishful thinking? Never put more
money in the crypto than you're put on the roulette table. Hello,
Crypto is a tool, not a ticket. Right. People need
to come to Operation Hope and get your financial literacy
education on before you start doing some crypto investing. Anyway,

(25:38):
in my opinion, so you can go in armed and prepared.
I mean, as a simple rule, you should have more
than in my opinion, ten percent of your portfolio investing
portfolio set aside for speculation. And this is speculation. And
so if you can afford to use lose five or
ten percent of your portfolio or win big lose one big,

(26:01):
then than fine, knock yourself out, go do it. But
if you absolutely need this for your retirement as example, right,
then the no, you should not be thinking that this
is some get rich quick scheme or some sure bet. Right,

(26:21):
nothing's a sure bet. Everything has risk. Investing in real
estate has a risk, in resting in the stock market
has risks. Right, There are stock market companies. There are
companies on the stock market who've gone bus that were frauds,
like in Ron my mother lost money. My mother Winnie Smith,
who was a proper investor, got rest so lost money.
On in Rock. There are many companies that just fool people. Right,

(26:45):
But those companies at least have assets underneath them that
you can sell the assets. They have cash flows at
least as unless it's a complete fraud, they have cash flows.
They've got profit margins, they have customers, and if the
thing goes bankrupt and the thing goes by, at least
a trustee can come in and try to, you know,
figure out, you know, what's the fog and the fake,

(27:06):
from the from the from the from the from the real,
and and then give investors back part of their money.
If cryptocos bust nine times out of nine, right, Okay,
I would be generous nine times out of ten, the
money is just gone. Right. So let me now explain
to you why this is not a true currency. Okay,

(27:29):
start to start with what is not and then I've
said a little bit about what it is. Let me
tell you what it is not. Cryptocurrencies are not true
currencies in the traditional economic sense. Here's why. Here's what
makes up a true currency. One, it's a medium of exchange,
so it's used to buy and sell goods and services. Okay, stop,

(27:51):
So so just understand it's a universal medium of exchange.
Number two. Uh, there's units of account. Prices are measured
through this unit of account, and the price is a
uniform number. Three. It stores value. It's there's a store

(28:12):
of value and it retains value over time. Really important point. Okay, Okay,
So let's think think about how how cryptos measure up
in this example. So is it a medium of value? Well, partially,
it's accepted by some merchants, but it has limited adoption.

(28:33):
So for anybody think I'm jamming up crypto, just hear me. Now,
I did say it's accepted by some merchants, right, but
but it has limited adoption. I don't go in stores
every day and see that they say, you know, we
accept crypto. I see it every now and then. But
I just I just gave you a compliment crypto promoters

(28:53):
that it is exchanged some in some places a unit
of account. No, prices are still in dollars, in euros
in the yawn, you know, in paysos, right, the unit
of count it are prices in primarily in in dollars.

(29:16):
Is it a store or of value? Well, it's extremely volatile. Uh.
Some argue bitcoin is digital goal, but prices still swing
widely on even the most premium of these currencies, which
aren't which is which is bitcoin? And that undermines that's
those price wings undermine what I call here stability. So

(29:39):
most experts would say that this is not a currency.
Yet Actually I think it's an asset, not a currency.
But here's why volatility. Prices can rise or fall twenty
to fifty percent in days, unacceptable for daily transactions. It's unacceptable.
The price wings hit twenty to fifty percent. One day
you go to buy a car and it's you know,
ten dollars, ten thousand dollar. Next time you go to

(30:00):
buy a card, it's fifteen thousand dollars. I mean, who
can absorb that. You go to buy some bread one day,
it's two bucks, and next day you go buy a
loaf of bread or whatever, probably two bucks. But let's
say it's five bucks and you go to the next day.
You know, the next day you go to buy it,
it's seven bucks and fifty cents. You know, that's just
not acceptable adoption. While growing crypto is not wildly accepted

(30:21):
like dollars or euros, regulatory uncertainty. Governments don't treat it
like legal tender. Right The US government is talking about
this right now. By the way, I think it's a
great idea for it to be regulated. Most things that
get regulated actually end up doing well. The stock market
was unregulated, it was a wild wild west. It got regulated,
and that's where the wealth really came from. The Securities

(30:42):
in exchange commission. Banking industry was unregulated. It was a
wild wild West. And of course you have this huge
boom and bust in the nineteen thirties. Banks are regulated
now and they're very, very profitable. You want to do well,
buy some stable bank stocks and hold it over time.
Banking business is a very stable business. I can name
other sectors, but basically anything that gets regulated because now

(31:05):
you have the rules of the game, and you know,
you can feel comfortable getting into it, and you have
a place to call somebody to complain to. You can
you know, report folks, And then you tend to have
more credible people that involve themselves in a regulated environment also,
and you tend to have a deep capital stack in
a regulated environment. Capital stack meaning people have enough money

(31:25):
so the thing that they're promoting doesn't go poof like
most of the cryptocurrencies have in the first In the
first run up here, stable coins like USDC or tether

(31:46):
try to address volatility, but even they aren't official currencies.
But they're stable coins, meaning they are tying themselves to
the US currency to try to make themselves more attractive.
But even those aren't considered official currency. So today cryptocurrency
is more like digital property than digital money. It's an
asset you trade, not something you live on until it's stable,

(32:10):
trusted and widely accepted. It's just not a real currency.
It's an experiment. Now, it's an experiment that might make
you a bunch of money because again you're in the
early days of something that's going to go up and
down wildly. So you know, if you again got enough
risk tolerance or you like that kind of investor speculation,

(32:35):
I'm not gonna call it investing investor speculation, and you've
got you bending your room writ money fantastic, or you
got a coach like I mentioned to you Carrie Lynn
and others who are proper teachers in this area. I
believe that Earn your Leisure has been doing some education
in this regard that I don't think ash Cash is
a guy you can trust who geerly speaking, this good

(32:57):
educator in these as a financial literacy. Just make sure
you're financially literal before you go on these areas. So
over the past years, again you've had twenty to twenty
five thousand cryptocurrencies launched and most of them failed. Eight
to ten thousand of them are still listed or tracked

(33:19):
on major sites. But they they're you know, they don't
do much, they're just inactive. Eighty percent plus either failed completely, abandoned, delisted,
became zombie coins still technically exist but or notativity or value,
or they just turned out to be scams or exit schemes.

(33:39):
The peak time for all this cutivity was twenty seventeen
to twenty eighteen. Thousands launched of these cryptocurrencies launched during
the crypto bubble twenty twenty to twenty twenty two. That
was the DeFi and the NFT Boom, another huge surge.
Here's the reasons for failures no real use for the
coin or no real use case for the coin, poor

(34:02):
management or development of the coin by its promoters, regulatory
shutdowns because folks were scamming, market crashes, rug pools, developer scams.
Starting to get the just what I'm saying here, So
you read this however you want. I mean, I'm just

(34:22):
giving you the facts of the matter that this is
just not for the faint of heart. I'm not telling
you not to do it. I'm telling you it's not
for the faint of heart. Now, let's let's deal with
something that it's just not obvious. What's the difference between
digital So, John, do you like digital currency? Do you

(34:43):
like digital money? Sorry? Yes, I love digital money. I
love it. It's like, with no exceptions. I love digital money.
But that's different from cryptocurrency. Okay, so let me explain.
Let me explain the difference, because this is a good
sort of place for you to plant your flag and

(35:04):
start your educational process just by knowing what cryptocurrency is
and what it isn't and how these things different. Uh So,
digital money are digital currency, right, refers to any form
of money that exists only in electronic form. It's not

(35:25):
a it's not physical like coins or bills. You can't
it's not even in this example, writing a check, the
old joke girming it up, you can't be broke. I
can't be broke, mom, I still have checks left. But
so it's not a physical anything. But it still can
be used to buy goods and services. Okay, which meet

(35:46):
the criteria I said to you earlier of what a
real currency means. So here's an example of digital digital money.
Your bank account Okay, your bank account balance you view
primarily online. Okay, that's right. Tell me if you agree
with that. Uh So, a credit or debit card transaction

(36:07):
as example, or credit or debit card. A credit card
or debit card is an example of digital money okay
moving around ze Venmo, PayPal, Apple pay digital money. UH.
Central bank digital currencies c B d C, such as

(36:28):
China's digital yuan, which is in development globally. That's digital money.
These are the key features here. Are is issued by
centralized u by centralized authorities are usually banks or governments. Uh.
Pay to national fiat currencies like the US dollar. Uh

(36:50):
do you know what fiat currency was before this session?
By the way, this podcast just curious. Transactions are processed
through traditional banking or payment systems. Right, you know what's
the purpose? Increase payment speed? So checks were better than
checks were more reliable checks were you know, it was

(37:12):
more reliable. System moved faster. Check checks made the system
move fast. You could write you know, do you know
you can write a check on the back of your
T shirt? By the way, technically you write to pay
to the order of Joe Blow, write his routing number
and account number, all this stuff. Sign it and you
could take somebody's T shirt to the bank and you
get into a nice argument with the teller and the
manager about whether they have a right and responsibility to

(37:35):
cash your T shirt. Right. I don't suggest you do it.
I'm just saying that a check is not just a
piece of paper. But we moved from from cash and coins, right,
having to carry all that around and load down your
pockets and all this stuff, and all you might get
robbed actually writing a check, and those checks people would float.

(37:56):
I used to float checks back in the day. You'd
write a check and sit it in you know, a
to a to a vendor. Then they got to pass,
they got to they have to deposit in their bank. Bank,
the bank would process that. It would float for three,
four or five days. Meanwhile you're running around try to
figure out how to cash how to cover that check.

(38:16):
Remember that. Don't act like you don't know what I'm
talking about. By the way, but digital, the digitization of
money solved all that. The transactions happened right instantly. So
increase payment speed, reduce cash dependency, make transactions traceable and
manageable in a modern economy. So as a step towards

(38:36):
are similar to blockchain. Right, and now, now, what's cryptocurrency? Okay,
I'm allowed to give you a compliment, now, crypto promoters,
Cryptocurrency is a new asset class. So I just called
it something other than a scam proper, legal, Proper Cryptocurrencies

(38:58):
that follower rules, have rules of engagement, are trackable, traceable,
and you know, fit the criteria I said earlier of
legitimacy right are a legitimate new asset class right and
need to be taken seriously. Cryptocurrency is a form of
digital currency that uses cryptography and decentralized technology blockchain to

(39:21):
secure transactions and control the creation of new units. So
example Bitcoin BTC, the first and foremost well known cryptocurrency
ethereum et H enables smart contracts and decentralized apps Solana, Cardano,
Ripple you get them, Get get the gist. Key features decentralized,

(39:44):
no central bank or government controlling it, limited supply usually
bitcoins for example. Supposedly it's capped a twenty one million
coins store of stored on a blockchain public ledger that
verifies and records transactions. It can be anonymous, no trans
you can transact without trying tying it to your real identity,

(40:05):
which by the way, isn't a plus animus. A lot
of criminals love this because, for obvious reasons, doesn't attract
to a person. Scamsters love this people, you might hear
folks sending you a note saying I'm going to do
something bad to you and embarrass you or whatever, and
I got this information on you. You need to pay me.
In cryptocurrency. They want that because it does not have

(40:27):
an identity attached to it, and technically you can't once
they transfer that money out and turn it into cash
by the way, that you can't find them. So the
key differences between digital money and crypto cryptocurrency is, you know,
you've got you know, an issue or of digital money

(40:48):
that's a central bank of government or institution. And with
cryptocurrency is typically decentralized and no central issue. Right. With
digital money, there's a lot of control centralized with courts.
Cryptocurrencies decentralized digital money, Uh, you use traditional banking and
payment payment rails and technology that's proven. Uh. And with

(41:13):
and and cryptal currencies built on blockchain uh technology. You know,
with digital money you have an identity tied to a
user's verified identity, right and uh. And the course cryptocurrency
is pseudonyms and anonymous uh identities anonymous folks, well, anonymous

(41:34):
something right, you don't know what you have no idea
what was on this side with cryptocurrency, Uh, so you
you know digital digital money is you're really you're looking
at stability backed by FIA currency, a major US or
other government currency. Uh. Cryptal currency is somewhat volatile, driven
by supply and demand. I would often say, you know,

(41:56):
I gotta like this at all when I was more
smarty pain it's about this, I say, cryptocurrency. It's like
a fancy gym membership, like when you're using that, when
you're excited about that gym membership, you get it you
and you go there and everybody's excited about it, and
everybody's going to the gym, and the equipment's off shiny
and new, and you're meeting girls, guys or whatever and
whatever reasonally going to the gym. It has a lot

(42:18):
of value. The minute that that the lure falls away
and you don't want to go to the gym anymore
and you found another place that's cool, and whether the
gym just loses value overnight, like it's it's it is
based on hype. It's based on emotions, based on whether
it's popular. A lot of cryptocurrencies are like that. It's

(42:38):
based on hype and not based on and your feelings
and your emotions, not based you know, on anything that's
underneath it and that has real storage value. Anyway, I
think I've talked enough about that. Digital money modernizes our
current system. Modernized our our current system. It's like cash
and credit going digital right where cryptocurrency challenges the system.

(43:03):
In total, it's a new system altogether, built by and
for the digital age. So digital money is the evolution
of the old system. Cryptocurrency is a rebellion that created
a new one. But every revolution needs rules or it
burns out. That's why financial literacy it's so important. That's

(43:25):
why I think financial literacy is a civil rights issue,
as I keep saying over and over again of this generation,
when you know better, you do better. Now we're at
forty three minutes here, so I can probably suggest that
you sort of got the memo so to speak on

(43:47):
this and why it's so important to get this right,
and why I have You probably understand now why I
have been concerned about people going into this thinking that
it's some kind of a sure bet. If something is

(44:08):
too good to be true, it's probably a lie. Only
in the dictionary does the words success come before the
word work, Because it's alphabetical. There's only work, right, and
I want you to do the work. I want you
to do the research of understanding what's what in this
particular case, what is a cryptocurrency? What is back It

(44:33):
typically nothing, there's typically no asset. Okay, let me give
you another example. So people say US currency is nothing,
it's back it's fiat currency. It's it is fiat currency.
It's not backed by gold anymore. Correct, that was a
Breton Wards agreement way back when. So it's not back
by gold anymore. Correct, it's just it's a flimsy currency

(44:57):
back by supposedly back by the US government. Correct, it's
US currency is fully backed by the full faith and
credit of the United States government, which happens to be
the biggest economy, the most stable legal system, the sole
superpower in the world. And it is a flight to quality.
For everybody in Russia who say they don't like America,

(45:19):
they're putting their money in, putting money in America while
they're complaining and criticizing the country on TV. All these billionaires,
and I would argue government officials in Russia are putting
their money legitimate Anteio Godden gains. They're hiding in America
because it's safe China. A lot of the Chinese billionaires

(45:40):
and Chinese officials, they're putting their money in the US
or buying US real estate or stocks, etc. Because America
is what I call what investors call a flight to quality.
It's the best, most stable system in the world. And
China owns a lot of our US treasury bills, right,
a lot of our debt because they believe while criticizing US,

(46:02):
they realize there's no deal better than uh, than than
the US dollar in the US financial system. So capitalism
in democracy your horrible systems, except for every other system

(46:24):
in the world. Right and UH, even communist countries like
China and Russia have adopted capitalism. One of the on
one of these podcasts, I'm going to break down the
different systems communism, socialism, and capitalism. I'm going to do that.
Tell me in the comments, and I'll spend a show
talking about that. But I want to get the fundamentals
of all these things out of the way, so you

(46:44):
have you can actually operate in this world fiction effectively
and smartly. So UH. It is a fiat currency. Uh.
The US is based on a FIA currency, but that
currency is fully backed by the US. The full faith
and credit of the US government. Occurrencies are not backed
by assets. Bitcoin has the benefit of it being mined

(47:06):
and having again supply limited supply and and and all that,
and so it it it has more inherent value, okay,
because it's a it's a closed loop system. And I
have some confidence in bitcoin and my my wife owns some,
but most cryptocurrencies, it's just it's just somebody who issued something.

(47:28):
Think about in the early days of the United States.
Anybody could issue a currency. A grocery store could issue
one and did m A labor a lumber store could
issue currency, and it did. A bank in this town,
a bank in that town issue their own currency. A
town could issue a currency, and so of course inflation
was rampant, and the coins, the coins, and the currencies

(47:51):
died as almost as quickly as they were created. And
you had no assurance that your money was worth anything.
So in America, the country reg you laidd this and
may create a central bank, hello, the Federal Reserve, a
US Treasury department also within the government right and put
rules in place and created a national currency that survives

(48:14):
to this day and is the envy of the world. Essentially,
that's what's happening now. In a smaller way with cryptocurrency,
you have all these folks running around starting this, starting that,
and calling it a currency. People who are not financially
literate believe the hype because there's a celebrity or whoever

(48:35):
are politicians. They buy these things. There's a rug pull.
Often the celebrity or whoever or whoever's backing that celebrity,
who's a real financier, they get them. They pump, they
pump a dump, they pump the price up, they pull
their money out, the price drops, and those who are
in the middle get slaughtered. I don't want you in
the middle, and I don't want you to en up

(48:55):
at the bottom. Did you get that? Did you understand that?
So I'm not jamming up crypto currencies. I'm telling you
that I don't want you betting once again your rent money.
I feel like I could talk about this all night,
but that's probably like you never want to be the
old guy in the club. So before you kick me
out of this conversation, I'm going to leave. I may
I'm kicking myself out of the conversation. I want to

(49:17):
just make sure before I end up talking myself into
coma and just making sure I've covered all of the
ground on this and that you don't walk away from
this sort of scratching your head, that you understand that
there are risk and rewards. There are clear opportunities if
you get up the right currency at the right time
and you ride the price up right. But what is

(49:38):
somebody trying to do upon what's trying to They're trying
they're trying to build a an economic system where you're
you're training, you're buying things with the cryptocurrency, and you're
training it and your you're you know, you're, you're it
has a stable price, And no, that's not what's happening
right now. What's happening is if people are bidding up
the price with US dollars, they're saying, again, bitcoin's worth

(50:02):
X dollars, And then at some point folks are trying
so you're if you're a millionaire, you're a millionaire on paper,
and you can wake up tomorrow and that work is
worth zero by the way, or you lose your key
or something, but that has no value until you convert that,
until you sell it and get what US currency. I

(50:24):
dare somebody to correct me on that The whole purpose
of this currencies, most of these cryptocurrencies, is not to
create UH. This is is not some effort to create
this community of merchants and those who are buying and
selling and using this. That's not the primary purpose. A

(50:46):
primary purpose is to uh to use it as an
asset that increases in value. But this asset doesn't have
any assets. It has height and hope tied to it,
my middle name. If you're buying stock, vying in real estate,
it's secured by real property. You can go tomorrow. The
property is going to be there. You need a key,

(51:07):
you lose your key, You get somebody come make you
another key. It opens the door to your real property.
There's a property ledger, it's called it's called a title.
It's ted, and it's insured by title insurance. And you
come up tomorrow. You leave for five hundred years, years
for five years, come back and your property is still there.
No one's gonna pill your property, steal it and take

(51:29):
your property someplace else. Whatever to my property. Somebody used
toole my property. Anybody's seen one five five O two
is out of freely my home address when I when
I the home I grew up when the house my
mother bought when I was very young, me and my
brother and my sister. No, the house address is still there.
A stock you know, a Ford Motor company, or whatever

(51:51):
company you you wal Walmart at whatever company that you love,
that company is there. It has employees, it has customers,
its cash flows, it has buildings, it owns, it has
real estate, it has trucks it owns, It has a reputation,
a brand. It has a stock price based on price
on earnings. It's called a price a pe racial price

(52:14):
to earnings ratio. There's some rationale of why that price
is going up or why that price is going down
is not totally rational. There is sentiment and there is
a motion in the stock market. But if that company
goes bust, goes bankrupt, as I said earlier in this podcast,
then there will be a trustee that comes along and
sales the assets or tries or sort it out. There's

(52:34):
a chance to get some, if not all, of your
money back. So an example of a stock market, unless
it's a complete fraud, you'd get some of or all
your money goes back if the company goes bust. In
the case of a franchise investment, you make same thing.
There's a building, there's a franchise, there's a business plan

(52:55):
as customers, as you know, there's a franchise license, you're
going to get something out of that. In most cases,
insurance company goes bus, same thing and all LIKELIHOD, you're
going to get your money back or some of your
money back. Real estate have already covered that. Nobody's stealing
the real estate. The stuff is but in US currencies

(53:17):
already covered that. Treasury bills, the tanza. The US government
goes out of business. The whole world's toast anyway, So
don't worry about it. That'll be nothing to worry about
because we're all done. But with cryptocurrencies in rare in
the other than the rare instances of the ones that
I've already mentioned, and stable coins which use the US

(53:37):
dollar as a foundational credibility piece the way, you know,
they get stable coins tied to US currency, But even
those are not asset based, I don't think in total,
So in many of these currencies, these cryptocurrencies are just
hoping and praying that they hit and they create a

(53:57):
buzz and sustainability, and and then when they do, you
do incredibly well, like bitcoin, folks who went in early
on bitcoin, like my wife and others, just absolutely killed it.
They're still trying to cast that for cash when they're
trying to get out. By the way, although some people
have traded bitcoin for cars and real estate, they find

(54:21):
the people who love bitcoin and are willing to trade it. Okay,
I hope I have in fifty four minutes demystify this
for you, and now you feel more empowered. Financial literacy
is a civil rights issue of this generation. I want
you to know better so you can do better. I
know this is going to call This is gonna be
a hot episode. People gonna be hot that I did it.

(54:41):
The promoters of bitcoin, who is they have bitcoin, not bitcoin, sorry, cryptocurrencies.
They have a tattoo on their shoulder for cryptocurrencies, and
they don't want anybody criticizing, and they're talking bad about it.
I'm not talking bad about it. I'm talking I said
things that are positive. I've said things that are not
so positive that called life. Get over it, right. I

(55:03):
love members of my family. Other people my family drive
me nuts. Right, it's called the bum factor. Twenty percent
of everybody are bums, and twenty percent of cryptocurrency are
more because it's new and innovative. Are just bums? Just
acknowledge that their bums are everywhere? And you don't want
bums in your family. And I don't want bums in
my family, and I want to do business with bums.
I don't want to be I don't have friends that
are bums. But there are bums everywhere. And I'm just saying,

(55:26):
you don't want to make a bum investment? What's wrong
with that? If you're a crypto promoter, you should love
what I just said. You should take this podcast and
share it with everybody and say do what John Brian says.
Be careful, be thoughtful. Know what you're investing in, who
you're investing in, what the company is, what the credibility is,
and then be thoughtful about it because why wouldn't you

(55:48):
want that? Right? You should have complete transparency and if
you do that, people can trust you too because you
don't have anything to hide. So there you go. This
is John O'Brien. This is money and wealth on the
Block Effect Network talking about cryptocurrency and digital currencies all
that come with it. If you love this space, go
into it with both eyes open and go in with

(56:10):
both feet and and and do very well with it,
have a long term perspective, and I wish you. I
hope to see you the finish line, telling me John Bryant,
I did it, and I made and I made a
fortune there. There's only about my numbers are correct, about
a one percent of billionaires who made their billions billionaires

(56:32):
and millionaires. By the way, about a one percent who
made that. They're tens of millions and billions in cryptocurrency. Okay,
just so you're clear, that's then there was the source
of their wealth is cryptocurrency only about one percent. It
doesn't mean it, It's not possible. I'm just telling you
this is separating the hype from the reality. I want

(56:53):
you to go to Operation Hope, get your financial coaching
scholarship so that you can go deeper in these areas
and they can give you some good advice on what
things to do and what you should be looking out
for as you become an investor, which I encourage you
to do. Have a full portfolio, including something you can
have a risk tolerance, a risk you're part of your portfolio,
in which case you might decide you want to go
all in on cryptocurrency and after you heard this and

(57:15):
got everything all your knowledge, go do it great, that's
what you want to do, but balance it out with
other things which you know well. It's a balanced approach.
So one thousand dollars free coaching scholarship. You got that
from me. Tell my people at Operation Shope I sent
you. You can download the Hope and Hand app and sign
up for coaching online on your Android or Apple phone.

(57:37):
You can go to our one eight hundred number. You
can go to our website at Operation shop dot org.
Just tell them about John Bryan sent you. I'm the founder, chairman,
and CEO. We're the biggest in the country for financial
literacy coaching, fifteen hundred offices in forty two states and growing,
the only nonprofit allowed to operate inside of a bank
branch in US history. By four and a half billion
dollars invested in you, raising credit scores, lowering debt, increasing saving.

(57:59):
So change your life and make you bankable? Can I
get an ape? Man? Getting? My book Financial Literacy for
All is number one for fourteen months now bestseller in
a hardcover copy and the new paper book paperback version
are out. It's a bestseller on Amazon and Walmart. And
you also get your local black bookstores which is cool

(58:20):
to support them, and of course tell your friends to
follow this podcast where I go deep in my ministry
of finance once a week on some topic. This week
was cryptocurrency digital currency. John O'Brien, I'm out. This is
a silver rights movement. From civil rights to silver rights.

(58:40):
Let's go change the world. Peace, Money and Wealth with
John O'Brien is a production of the Black Effect Podcast Network.

(59:02):
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