Ep. #825 - Crypto Explained

00:00.00

Matt Watson

And we’re back, with another episode of the Startup Hustle. This is your host, Matt Watson and this is part of our series about Crypto and NFTs so stay tuned for that. We’re doing several different episodes about Nfts which is really exciting covering all kinds of aspects of them. Today. Our topic is going more about crypto in general and our guest today is Seth Manus Scalo he is the author of prohibited profits and the founder of the crypto wealth coach and most of you probably don’t realize this but I’m also a. Ah, big fan of cryptocurrency-related stuff so this will be a fun topic today. Um, before we get started I do want to remind everybody that today’s episode is brought to you by fullscale io helping you build software teams quickly and affordably. Seth, welcome to the show.

00:50.25

Seth Maniscalco

Glad to be here. Thank you, Matt.

00:53.35

Matt Watson

So, I’m definitely interested to learn more about your book and what you do. I guess my first question when it comes to Crypto is are we buying or selling today? Are we in a bull market or a bear market today? Do you know?

01:08.35

Seth Maniscalco

Well, that’s not a simple answer and that that really depends on who you are and what kind of an investor you are, right? I mean there’s my little disclaimer are you a short-term investo or are you a long-term investor? You think blockchain’s going to be here in 10 years. Well, I’m a buyer I don’t about you; it’s worth a half a million dollars.

01:21.67

Matt Watson

Yeah.

01:27.80

Seth Maniscalco

I’m not gonna care too much if you bought it 36 grand or 41 grand that’s nominal to me.

01:30.84

Matt Watson

So, I first brought bought bitcoin in 2013 okay and then in 2017 when it was really really crazy and went to like $20000 I thought I I like awoke like I’m like the random person that forgot I even had crypto.

01:35.92

Seth Maniscalco

Um, there you go.

01:50.57

Matt Watson

And then I think I had like I want to say I bought like $500 worth of it in 2013 and then all of a sudden it was worth like 15 grand or something like that and then I decided I’d get more interested in it and then I have since then have mostly figured out every way to lose money with cryptocurrency. So um.

01:55.78

Seth Maniscalco

Um, yeah.

02:08.41

Seth Maniscalco

There are a few of those.

02:10.20

Matt Watson

So what? what has been your journey into this?

02:12.18

Seth Maniscalco

Um, yeah, my journey’s been an interesting one. Um I believe I made the first professional recommendation for my investors somewhere around 2015

02:25.71

Matt Watson

Okay.

02:27.93

Seth Maniscalco

When bitcoin was about two hundred and twenty-five bucks, two hundred and fifteen bucks something like that I actually unloaded my 401K at that time. I paid a 35% penalty to the IRS and the federal government and you know that decision worked out pretty well for me today here and it.

02:37.17

Matt Watson

Um.

02:45.59

Seth Maniscalco

$4,2000 that’s a significant move, right? I mean I did. Okay, it was it was probably one of the best decisions I’ve ever made in my life in hindsight it’s easy to say that in hindsight. Um.

02:46.77

Matt Watson

You and all n and 2015

02:59.72

Seth Maniscalco

But that didn’t come easy to me I got to tell you it took me a very long time to figure out exactly what Bitcoin was. I probably spent a month of diving into it reading the white papers watching Youtube listening to you know, random folks on social. And really dissecting exactly what was going on here and why everybody was all excited and then finally when that light bulb clicked and went off in my head it was you know it was more of an oh my gosh moment. How can I not get behind this big?

03:28.90

Matt Watson

So what? So, for those that are listening and this is you know part of the key to our topic today is you know, kind of what is crypto. Do you know how? how would you explain to? you know my grandma what crypto is because I’ll be the first one and tell you like.

03:43.15

Seth Maniscalco

Ah, um.

03:47.13

Matt Watson

I’m all in on crypto and in a different way than you and I’ll probably tell you more about that later. But like if I talk to my mom or dad about it. They don’t understand that they don’t get it like they still don’t get it like they were just totally foreign to them.

03:56.45

Seth Maniscalco

And you know there’s challenges with that. Do right? because at the end of the day we’re talking about technology and technology continues to advance and yes, there are opportunities to make life-changing money in the cryptocurrency realm. But that’s not to say that it’s easy. The reason you can make a lot of money is that it is probably the most complex financial market on planet earth right now at the moment today I suspect that will change as technology continues to advance. But it’s not as easy as going you know down to your corner bank and opening a bank account.

04:30.64

Matt Watson

Yeah, yeah.

04:32.82

Seth Maniscalco

Um, you need to have a computer you need to have a laptop you need to you know, take certain precautions if you’re going to be responsible and sovereign in your own money that means there’s no one eight hundred bitcoin you can call if you make a bad purchase with your bitcoin debit card. You know you’re. You got a problem at that point you are responsible for your own decisions and if you’re not careful. You know the only people that have ever lost money in bitcoin have held it for less than a four-year full market cycle. Basically did something stupid either. They handed their money to somebody else and they didn’t do their homework. You know some malicious actor. They forgot the passwords to their to the keys to their kingdom and didn’t write it down and you know there’s nobody they can call for help and that’s the truth. Yeah.

05:11.95

Matt Watson

Yeah, forgot it was on their hard drive and they ah dropped it off at best buy to be recycled. Yeah.

05:20.95

Seth Maniscalco

You know, it was human error plain and simple There’s no other way around that and a lot of people you know aren’t comfortable with that There’s a certain amount. There are pros and cons to having a bank account right? You know somebody can protect your money up to a quarter of $1000000 with FDIC insurance. And if you have a problem you can call the bank president and say you know what somebody scanned me I need my thousand dollar purchase back and it may take you three days or a week to get that money back but eventually you know you’ll make your case and you’ll get that money and you’ll be protected. There are no protections with bitcoin. You know they call it trust lists. Um, but you need to have trust a whole lot of trust for me to send you a bitcoin and make a purchase from you Matt you know like you need to have trust in that situation. There is.

06:01.54

Matt Watson

Yeah, because you can’t get it back. There’s there is no reversal of it. So I guess you know so I think most people probably know what bitcoin is these days and they know it’s basically some form of magic internet money. That’s digital right? And honestly. In many ways. The Us dollar isn’t much different, right? like there’s nothing backs the Us dollar right? It’s worth a dollar because the Us government says it’s worth a dollar huh? yeah.

06:25.10

Seth Maniscalco

Other than guns and violence guns and violence and the threat of Jail Yeah, that’s that nothing else other than that.

06:33.90

Matt Watson

There’s nothing that backs the Us dollar either and you and we could largely argue. It’s digital at this point like we use credit cards and online banking and like we don’t use a lot of paper money I mean at the end of the day. It’s basically digital. Yeah.

06:44.14

Seth Maniscalco

We’ve been using digital money since the 1970 s and this is nothing new. We’ve been going to the atm your money is really just ones and zeros on an excel spreadsheet. That’s it.

06:51.82

Matt Watson

So so then my question for you and I and I have my different answers I have my own answer for this that I can share but I’d like to hear your answer then why? why bitcoin? why? Why do we need it? bitcoin.

07:03.40

Seth Maniscalco

So the exciting thing that bitcoin specifically brings to the table is that never really existed before in all of modern human history right? So so so so let me scale this back for a moment because. Modern humans are like what the last twenty thousand years you know where still basically cavemen walking around with smartphones but we’re modern humans. Um, and yeah, you know we used to trade shiny jewels we would trade shells. Um.

07:30.70

Matt Watson

And and.

07:35.20

Seth Maniscalco

If you and I wanted to have an agreement we might barter on a chicken or a cow or you know the next crop that’s gonna come out in April here in spring right? I mean we would barter then we move to precious metals we would dig gold out of the ground and.

07:37.28

Matt Watson

Um, yeah.

07:42.87

Matt Watson

Yes.

07:50.80

Seth Maniscalco

Press it in a nice coin and polish it up and put a Roman Emperor’s face on it because we trust the roman emperor who also backed their money with threats of gold and violence and all that stuff too. But we trusted them at the end of the day. The only reason we use our money is that you agree.

07:53.44

Matt Watson

Um, yeah.

08:07.36

Seth Maniscalco

That hundred-dollar bill has some sort of value in the market and I agree that $100 has value and we change hands and we go about our business. Um the problem that really comes with modern money is the fact that you know you and I in the old days would we would shake hands and we would agree and we would.

08:07.95

Matt Watson

Right.

08:26.73

Seth Maniscalco

We would barter a chicken or a cow and we’d go our separate ways and maybe you might not be happy at the end of that agreement and you might be pissed off and decide I don’t want to give this guy my chicken I’m gonna do so I’m going do business with somebody else right? Whatever happens, the deal fell apart. And, we would just go a different way now we trust third parties who are the third party. Well, that’s the bank. You give them all you give them $100000 worth of your money and they have the control over your money they can shut your bank account down if they just and I’ve been through this a few times you know having businesses with cryptocurrency in the name. Um, well in 2018 I had you know Chase Bank shut down my business account because they came out with a blanket policy. That said we don’t want to do business with crypto people. Um and eventually the world has changed and I got my way through those situations and I found other banks but at the end of the day. All my money was sitting in a bank account somewhere and they wrote me a check for two hundred and fifty thousand dollars and said we’re not doing business with you and they gave me no reasons why? Um, so that was an interesting experience. But that highlights the reality that somebody else is in control of your money. So. We go to accountants to do our taxes right? You maybe pay. You know you write a check for a couple of hundred bucks and h and r block does your accounting and they sign their name on the paper. Well you’re trusting somebody else in that situation and believe it or not there are malicious actors in this world right? just because you go to a third party.

09:52.50

Matt Watson

Yeah.

09:56.24

Seth Maniscalco

That doesn’t mean that a third party is not corrupt. I’m ah you know the banks have done business with some of the nastiest people ever to live on the planet. They have been fined billions of billions of dollars and you know they continue to. To act is not necessarily the most moral and ethical manner and they have carte blanche to continue to do it. Um, and that’s a little bit of a negative spin on things but at the end of the day. These folks have control and they have the power. So what’s the difference with Blockchain. We’ve been using digital money since the 70 s PayPal. Venmo um, you know you go hit an atm your money’s just digital numbers on their spreadsheets right? This is nothing new digital money’s existed for 50 years well blockchain and bitcoin was the first one to come out and say rather than having a central power like the bank.

10:36.90

Matt Watson

Yeah, yeah.

10:52.53

Seth Maniscalco

Or an online exchange or my accountant handle this rather than let them have the ledger and say who’s right and who’s wrong and be the final power Basically we’ve taken that ledger and we’ve spread it out against a million other computers across the globe. Now a million other computers and I’m using round numbers purely for illustration a million other computers all have to agree that I send Matt one bitcoin and he now has one bitcoin and I have minus one bitcoin on my ledger a million other computers all have to agree. Within a 10 minute period that that happened 1 person no longer has to agree that I sent money to Matt and it’s now in his account a million other people. So so what happens is the more people that participate in that network and have a bitcoin wallet. The stronger that network becomes the more trust that is built in that network. We now have a million people. There’s like you know I don’t know the number one ah hundred million bitcoin wallets it’s it’s continuing to compound and grow on an exponential level that.

11:56.92

Matt Watson

Well, and.

11:59.65

Seth Maniscalco

Right? That right there Matt is is my answer that is the real difference with what bitcoin delivers and brings to human history that has never existed before.

12:07.60

Matt Watson

To to me you know, bitcoin and and other cryptocurrencies basically are a form of currency that is not government backed right? like that. That’s one of the biggest.

12:16.74

Seth Maniscalco

not not true that’s that’s a blanket statement and it’s not true for all cryptocurrencies because there are central backed digital currencies that are backed by other government bitcoin is the exception. There is no Ceo of the bitcoin.

12:22.48

Matt Watson

Yeah, yes, but big but bitcoin and stuff is not right. It’s not a government back currency and then so you have there are a lot of countries that have a lot of issues with inflation and stuff like that and and bitcoin is.

12:37.40

Seth Maniscalco

Um, ours being one of them ours being one of them right? I mean everybody’s feeling that pain today.

12:40.93

Matt Watson

Huh Yeah, ah yeah, right now. But I mean there’s but there are some other countries around the world where there inflation is like hundreds of percent a year right? like thanfl like the price of bread is different every day because the inflation is so bad and so there are also a lot of countries and most people.

12:53.91

Seth Maniscalco

It it takes you this much paper money to go buy a loaf of bread and that’s not an exaggeration good. You know, go ollivia go to Venezuela you’re 100% on appointment.

12:58.59

Matt Watson

Yeah, yeah, yeah, and so there are also a lot of other countries and most people don’t realize this that use the Us dollar or they have their own currency that is pegged to the us dollar basically like Panama and like.

13:16.22

Seth Maniscalco

How many countries are in the world today I don’t I don’t know 22230 there’s there’s some microations but ah for just just for math and and for the audience one ah hundred and seventy nine out of countries use the Us dollar to back their money.

13:18.80

Matt Watson

Um, and some others hundred and eighty something that.

13:33.62

Seth Maniscalco

Hundred and seventy nine countries that’s reckless is what that is. That’s irresponsible and the us government has printed 60% more dollars in the last few years and that’s a house of cards on on an on ah on a beach front made of sand.

13:36.77

Matt Watson

That’s Crazy. It’s crazy. Yeah.

13:53.29

Seth Maniscalco

That’s waiting to get blown over my man. That’s you know I’m painting probably an ugly picture and I hope I’m wrong genuinely hope I am wrong. Um, all indicators.

13:53.54

Matt Watson

Yeah, so what it yeah well and that’s that’s one of the great things about bitcoin is there will only ever be 21000000 of them or whatever the number is and so you you can’t print more of them that.

14:10.96

Seth Maniscalco

So so you’re taught So what makes that’s then that’s it an incredibly important factor and one of the things we hone on for my investment principles for for my hedge fund and also you know that we talk about in the new book Prohibitive profits is what is a.

14:11.67

Matt Watson

That’s all there’s ever going to be.

14:27.56

Seth Maniscalco

A sound currency right now we’re talking about deflationary money where it has a hard cap on it versus the us government which is inflationary money and somebody just goes down in the printer and then they can make billions of dollars tomorrow there’s there’s no cap. That’s what inflationary is.

14:38.95

Matt Watson

Yeah, well and and and I always joke when people talk about the national debt I Always kind of laugh at them like we don’t have national debt. We make our own money we make as much money as we want like what difference does it make right.

14:48.75

Seth Maniscalco

Great I Who’s who who who are we paying back exactly we’ll just make more. Yeah.

14:56.25

Matt Watson

Now I I agree we should have a national or a ah ah a balanced budget like I’m all for a balanced government government budget. But at the same time like we don’t really have debt because it’s our own currency. So yeah, yeah, yeah.

15:04.66

Seth Maniscalco

Then you know then why are we collecting taxes Matt like who who are we really paying you know there. There’s a like there’s a lot that’s a deep rabbit hole right? I mean that that opens up a can of wor. But I hear you.

15:16.13

Matt Watson

But but it but it highlights the problem right is the government controls all of it and and even with the Us dollar The the Us government has a lot of influence worldwide because of what you mentioned earlierer the Us dollar is used heavily worldwide but especially in the oil industry.

15:30.87

Seth Maniscalco

Um, oh yeah.

15:32.86

Matt Watson

Where most countries have to have us dollars to buy and sell oil with which creates a high demand for us dollars. So for example at full scale um reminder this you know this podcast today is brought to you by fulls scale io helping you build software development teams quickly and affordably. In the Philippines if they want to buy oil. They’ve got to take the filipino peso and buy us dollars with it and then buy barrels of oil so that actually so but but that devalues their currency right? because they need less of their currency and more of ours.

15:58.46

Seth Maniscalco

Well, you’re you’re thinking ten years ago that was accurate. Yes.

16:10.82

Matt Watson

And so that’s what partly controls the exchange rate as well is that supply of of they have to they have to buy so many us dollars but they have to buy oil with it. So It’s like the the Us wants to control all the banking system the Swift System. You know all that stuff worldwide and part of it. Comes down to buying and selling oil.

16:31.35

Seth Maniscalco

Imagine the audacity of somebody telling you how you can spend your money that you worked for and you pay taxes for that’s ah, that’s a travesty man I’m ah I Love these conversations these these are fascinating I’m really enjoying this. Um, it’s a scary world and and.

16:40.35

Matt Watson

And so. Well.

16:49.22

Seth Maniscalco

Here’s here’s the problem with that here’s I’m I’m largely libertarian minded. So I I believe you should be able to spend your money How you want you should be able to live your life How you want and you know I believe in less government. Um, at the end of the day right? like I I want the freedom to live my life. How I want.

16:59.53

Matt Watson

Yeah, absolutely.

17:06.53

Seth Maniscalco

And as long as I am not hurting anybody else I should have the freedom to live how I want you know?? Um and the problem is from from my perspective I’m just sharing my perspective here. Um, but if you put enough pressure on people which is what the Us government and and laws do in a large way. People will find a way around you right? like I mean we can sit here and the war on drugs is a complete failure. We have spent more money fighting the war on drugs than we have done good in this world when you when you create a system of laws, at the end of the day, All you’ve done is create a black market that did not exist before.

17:42.77

Matt Watson

Um, yeah.

17:44.71

Seth Maniscalco

Because people find a way. You know that’s why criminals exist right? Like we have tens of thousands of papers on the law and criminals exist because they don’t care what you put on paper at the end of the day. So so what happens so when you force other countries to follow your rules and follow your laws.

17:54.80

Matt Watson

Yeah, yeah.

18:03.32

Seth Maniscalco

And you must use my money. That’s not backed on anything or we will come in in invade your country and kill your citizens because we don’t like how you do it eventually. They’re going to find a way around you and that is what bitcoin now solves. Now. They’re going out and and you know there there can be a conversation around moral countries and whether they should be doing this or not and I will grant you that you have the right to that opinion. Um, but you have to understand that when you put pressure on people who don’t want to live the way that you want to live they are going to find a way around you. Eventually and that is what’s happening now. Now there is a way for people to get around the us dollar. They don’t have to use your dollar. We can use bitcoin. We can go out. Buy gold. We can stake funds in other assets to get away from you and countries like China have been stockpiling gold.

18:44.76

Matt Watson

Um, yeah.

18:54.86

Seth Maniscalco

The last ten years to get away from America we’re now seeing Russia doing the same thing. You know there’s a big conversation to be had. But my point is if you put enough pressure people find a way around you and that’s what the world is doing right now.

18:59.18

Matt Watson

Well and so let’s.

19:06.42

Matt Watson

Well and let and let’s talk about that for it because obviously the war with Russia and Ukraine has dramatically changed a lot of these things and so the the value of the russian ruble has crashed right? And now you know.

19:19.70

Seth Maniscalco

Um, short.

19:23.73

Matt Watson

All the governments around the world can sanction and basically seize the assets of the russian government and if people were using the blockchain they wouldn’t be able to do that like if if if Russia owned you know one ah hundred billion dollars with a bitcoin.

19:34.32

Seth Maniscalco

From at cornet.

19:40.97

Matt Watson

And they were buying and selling you know oil and you know they’re they’re exporting oil and and receiving the money in bitcoin and doing all that they don’t need us dollars to do it and they don’t even need rubles to do it. They were doing bit using Bitcoin they would. There’s nothing. You can do about it. You can’t sanction it. You can’t see nothing.. There’s absolutely Nothing. You can do You can’t stop it and that. That’s one of the key things to crypto is nobody’s in control of it.

20:01.25

Seth Maniscalco

They they they do have control over on ramps right? So you know exchange centralized exchanges like the coinbase buyance crackn anything that has got a Ceo sitting behind a desk somewhere is a pain point that they can apply pressure to um.

20:11.94

Matt Watson

Yes, converting us dollars to crypto that on ramp is is is is what we would refer to the onramp right? How do I take money out of my bank account and come and buy bitcoin is that on ramp.

20:19.81

Seth Maniscalco

Right.

20:25.40

Seth Maniscalco

But the only reason they can do that is because you know you and I as the user have given up our power to say I want to keep my money on coinbase Now if you’re sovereign and use cold storage. You can get away from that they can make laws and they can make you a criminal on paper but you know.

20:33.60

Matt Watson

Um, right? Yeah, it doesn’t matter.

20:43.94

Seth Maniscalco

Until they throw you in Jail They can’t really stop you So that’s a different conversation. But yeah bitcoin exists outside of their laws regardless of what they think of it.

20:54.11

Matt Watson

And so I mean overall that that is that is one of the the big pros to cryptocurrency in Journal right? is it’s not a control of any government. It’s It’s basically a global universe wide digital currency that anybody can use.

21:02.59

Seth Maniscalco

Carnivversenet.

21:08.19

Seth Maniscalco

This is why bitcoin was invented right? I mean the genius of Satoshi Nakamoto whoever that pseudonym actually really is whoever the genius is behind this I don’t think so I I think he’s not the guy. No um, ah.

21:17.50

Matt Watson

Is it Craig right? You don’t think so maybe it’s you.

21:28.40

Seth Maniscalco

Ah, maybe it is um but the reason this was invented was because of the last financial crisis right? somebody said you know what? the us government is is wrong. This is not right and we need to get the government out of our money. That’s the true genius behind this that is what really is being afforded at the end of the day is it perfect? No there’s problems. It’s not perfect. Technology is going to continue advance if for some reason we have a ginormous solar flare. Biggest one and last 40000 years and the compli can you know. The um, the electromagnetic interference of the globe gets shut down and the internet is gone. Well guess what bitcoin isn’t going to work either. But we’re probably going to have a lot bigger problems going on if that really happens. You know there’s arguments that people like to make about that that that is an exception and not the norm. No, it’s not perfect it’s not a perfect system we’re humans it ain’t perfect. But by god it is probably 99.9 Percent near perfect in the financial world. For what you and I need to do to complete a transaction without the government saying how we need to go about.

22:34.71

Matt Watson

So so we’ve talked a lot about bitcoin and and some basics of crypto but I want to ah mix up for a second now and talk about the other side of crypto that’s totally outside of bitcoin right? So after bitcoin we had ethereum was. Created and the goal of ethereum right? was to be like the the computer of the world right? like so on the blockchain you could basically have code right and you could do things you have smart contracts and then that is of course dramatically changed over the last few years and now ethereum is honestly a dinosaur that has been. Far surpassed by new or better things. But it’s it’s still the big thing that gets all the attention but now because of smart contracts. There’s so much more that can be done out there and there are all kinds of businesses that exist out there that do things and and Nfts is one of them. We mentioned I mentioned Nftts briefly and we’re doing a whole series around nftts.

23:28.34

Seth Maniscalco

You My blood pumping you go get my blood pump and I love this.

23:29.13

Matt Watson

But um I use huh now you know I am all in you mentioned earlier you you know a few years ago you went all in on bitcoin I went all in on the defi side of it. So I’m I’m a defi guy which is decentralized finance and I actually took all my money. And converted to dollars but converted to dollars in on the blockchain and I can use it for lending and staking and liquidity providing and all these things and make 10 to 20% interest on my money just with us dollars and like with you know, less volatility risks and the the volatility of bitcoin makes me puke. Like the 20% up and down every month and whatever like I don’t deal with that very well so I invested all my money just in dollars and then what most people don’t realize right is there’s a whole world out there of of finance now that you can do. Option trading and margin trading leverage trading and I mean you can even buy Tesla stock on the blockchain right? like there’s all this crazy stuff that exists out there including lending and and the simplest example of all this for those aren’t familiar with it is somebody somebody like you has Blockchain I’m sorry has bitcoin you had it since 2015 and it’s probably worth a lot of money right now and you’re like I don’t want to sell it but I need a few bucks to buy a car so you might want to get a loan right? and so there are people like me that would give you the money and I would take your bitcoin as collateral. So there are basically banks on the blockchain that facilitate that and guys like me can make interest on my money by giving you. Money on your collateral right? And so there’s a whole different world of of crypto out there and besides just bitcoin that most people don’t realize exists.

25:08.10

Seth Maniscalco

Yeah that’s a solution that you know a coin like salt provides you’re talking about asset lending and Defi is huge right? I mean that that’s one piece of the pie. You’ve you’ve got liquidity pools. You’ve got staking. Um, you know there’s there’s multiple ways to go about that. Um, one of the drawbacks to defi is you’re you’re still you know you’re handing your money to somebody else in order to collect the 20% or the 200% whatever rate you have agreed to so there’s a certain amount of risk with you know, giving somebody 100% of your assets and enough bad stories to go around.

25:33.53

Matt Watson

Yeah, yeah.

25:46.48

Seth Maniscalco

It’s not a bad way to go I mean compared to you know the point zero one percent the bank is going to pay you on interest and then they’re going to turn around and you know stake that money in the stock market and make 20% on the on the point zero one percent that you pay well why am I feeding the bank that I might as well just do that for myself and do it the smart way i.

25:50.15

Matt Watson

Oh yeah.

26:05.41

Seth Maniscalco

Kudos to you, you’re you’re ahead of the the masses there Matt that’s smart, wickedly smart.

26:08.49

Matt Watson

Yeah, the only problem is is it’s ah filled with exploits and and and bugs. You know the the problem with I mean all modern banking is is digital as we talked about right like bank formerric. He’s saying it’s all computer stuff behind the scenes but the problem with smart contracts and the blockchain is it.

26:13.99

Seth Maniscalco

Um, that it is.

26:22.50

Seth Maniscalco

10%

26:28.25

Matt Watson

If a developer has a bug in you’re in their code like your money’s just gone. There’s no and there’s no way to fix it. It’s just gone and so I’ve I’ve been hit with ah a few of those exploits had 1 actually a couple days ago and so um, ah.

26:29.76

Seth Maniscalco

Um, yeah.

26:38.83

Seth Maniscalco

I had a buddy mine who was trying to get me involved in an Nft project and you know I decided not to and then like two months later he called me back and you know Seth we we raised this money we we’ve got ah a $400000 you know digital Nft project. And our blockchain developer had a back door and all this money is gone. You know it calls me in a panic and and and I mean it was a heartbreaking conversation to have um but that stuff does happen if you don’t know what you’re doing and really you know if you’re just chasing money.

27:01.91

Matt Watson

Yeah, yeah, yeah.

27:17.78

Seth Maniscalco

In this space. You’re you’re gonna you’re gonna open your ah yourself up to a lot of problems. You know.

27:20.73

Matt Watson

People that Chase super high Yields are inevitably going to run into super high risk like it. It absolutely follows So You know you’re you’re the founder of the Crypto. Wealth Coach. So for those who are listening that are thinking about investing and in crypto like what what general advice. Do you give people.

27:38.69

Seth Maniscalco

Um, yeah, there’s we have 11 principles in in our book prohibited profits. That’s thank you again for the opportunity to be on the show here. That’s kind of what I want to talk. We just released this book in November. It is my very first book. So I’m I’m new to the scene I’ve never done this and and I’m honored to be here. Thank you again? Matt but within that book we actually focus on 11 fundamental principles to help with technology investing specifically. Um, because technology investing is a pattern that is that has repeated itself. You know over the last hundred years where you can make generational wealth. Um, so bitcoin is a fascinating conversation right? I mean that if you got in a bitcoin 10 to twelve years ago you’re probably sitting on generational wealth as long as you didn’t make any stupid mistakes you’re you’re sitting in ah in a good comfortable position at this point that’s there’s probably a safe statement to make but it’s also temporary right? like I’m 45 years old. Um I grew up in the 90 s I watched my parents and my parents’ friends talk about the dot com boom. When that happened um I wasn’t quite old enough to be legal to invest in the stock market. But I I remember those conversations you know and thirty years ago there’s conversations where have you heard of the internet Matt are you online? Do you got a computer. Do. You do you have an Interweb link. Imagine having that conversation to do today if I got on this podcast and Matt do you have an internet link you, you’d laugh at me. That’s a ridiculous question to ask if you are not on the internet. My my friend you are completely irrelevant in 2022? Um, you know that.

29:10.25

Matt Watson

Um, yeah.

29:17.38

Matt Watson

Or you just live in a third world country. Yeah we we we also all forget like so my wife’s parents or my wife’s from the Philippines and like you know she grew like.

29:23.85

Seth Maniscalco

Okay, you’re not irrelevant, but you’re you’re you know there, you’re you’ve certainly got some challenges ahead of.

29:35.26

Matt Watson

Two years ago I mean her family didn’t have ah didn’t have a sink didn’t have an air conditioner didn’t have a stove didn’t our for sure. All didn’t have the internet or a cell phone and so there are still people that live this way in the world. You know.

29:43.63

Seth Maniscalco

You know and now and now they probably got high speed anymore there people. That’s that’s a fascinating conversation with technology because what you’re talking about is exponential growth and when you have exponential growth on on the you know as a possibility. When you start compounding that you have the ability to also leapfrog certain technologies and we are seeing that in the world and you know very much so with bitcoin right? like the internet has brought us exponential advancements to the fact we’re you know tribes in the Philippines and and Africa and I’m making general statements here. Please. Don’t let any viewers get upset at me because I’m I’m glancing over um, but we are now seeing you know tribes that never had dial up internet now they’re walking around with you know, $2000 smartphones in their pocket and they’re on and they’re on high speed internet chasing you know trading stocks from from their their grass hut. Okay, so that’s with the.

30:34.57

Matt Watson

Um, yeah.

30:39.51

Seth Maniscalco

The the benefit of exponential technology advancements gives us and while it’s taken 30 years to get the internet up and going now. Everybody’s going to smartphones and we’re getting digital money and who knows what the next technology advancement is going to bring us I have no idea. Yeah, if you’re buying bitcoin right now.

30:52.37

Matt Watson

Well and and and to your point.

30:58.00

Seth Maniscalco

My friend you have missed the boat bitcoin was the opportunity ten years ago if you if you’re buying it now because your your barber’s talking about it. You’re coming at this from from ah you know a different mindset that I would recommend you come at it from.

31:04.83

Matt Watson

Yeah, yeah.

31:13.73

Seth Maniscalco

Um, and that’s where the book really focuses on the fundamentals of sound principle money deflationary money versus inflationary money. Why are we buying this technology are you looking for bitcoin 2.0 well I don’t give to rats tales about bitcoin 2.0 bitcoin already works. It’s a trillion dollar economy if you want to invest in technology. You need to invest in disruptive markets that are going to shake up the world and solve a problem. Those are the investments that are going to 10 x and 100 x you know I I don’t care about 20% investments in the stock market. I want to make a thousand percent are better on every investment that I make and so that’s the angle we come at it. You know most investors would tell you if you can double your money jump on it. I don’t even I don’t even get excited unless I can triple my money I’m looking for 10 x or better. And we come at it from a technology investment standpoint. Um, and that’s what we really focus on in the book. That’s a long answer to get to your answer. That’s what we.

32:10.69

Matt Watson

Well and so that that highlights what I mentioned earlier where you know I’ve I’ve been one of those people that have figured out every way to lose money in crypto and and because what happens and endly is people don’t think about buying in until everybody starts talking about it but nobody starts talking about it until you hit like.

32:25.94

Seth Maniscalco

Um, yeah.

32:29.92

Matt Watson

The pinnacle of it right? like the pinnacle the price and everything like so in.

32:32.33

Seth Maniscalco

If you’re doing what everybody else does you will continue to get the results that everybody else has.

32:37.35

Matt Watson

Until like 2017 2018 or whatever when bitcoin went to about 20 grand. That’s like everybody gets excited. They buy it. They buy it at the top right? and then they then ah you know it dumps later and they sell it and they lose money and also what really blows me away is I recently saw a couple of my family members and I you know like. I talked him randomly about stuff with crypto or defi and whatever and and they’re like oh yeah I bought some crypto I bought some ah with Robin Hood I bought some of that doge coin and I’m like oh my god and of course they all lost a bunch of money at it and I’m like of all the things you could have possibly done.

33:04.54

Seth Maniscalco

Yeah, which which isn’t even crypto.

33:14.56

Seth Maniscalco

You went up 10000% and you decided to buy more. Yeah, you didn’t you didn’t really think that through did you like you know market markets are like rubber bands man they they bounce back and forth. They’re elastic.

33:16.36

Matt Watson

You Bought Doge coin. Yeah, and then they buy and then it crashes it’s and and that’s that’s the big thing that I’ve learned is that the time to buy is. You know when nobody’s talking about it right? It’s it’s it’s not at the top of the wave when everybody’s talking about it and it gets all the press. It’s it’s.

33:38.80

Seth Maniscalco

You should be buying right now after a sixty fifty percent dip nobody wants to talk about bitcoin anymore because they’re all have lost money. That’s why nobody wants to talk about it. They bought it 65 grand now they’re down 60% and they’re embarrassed. Okay, that’s really what’s going on.

33:49.18

Matt Watson

But now’s a good time to buy. Yeah.

33:57.53

Seth Maniscalco

Um, but the truth of the matter is now is when you should be plowing in and finding the next opportunities that are going to wickedly outperform bitcoin you know bitcoin going from 40 grand to 200 grand is significant you you should be head over heels if you find performance like that in the stock market. But other technologies that are bringing new advancements to the table that bitcoin doesn’t and won’t um, like harmony and Vesper and terraluna which takes seconds for their blockchains to close and and complete. Um, you know they’re they’re disruptors in the market. These things are going to outperform bitcoin by leaps and bounds. Um, and that’s where I want to be. That’s what I’m looking for. You know it’s it’s like the penny stock market. You know a lot of folks will like $10 or less as penny stock. Well we look at penny cryptos over here.

34:36.20

Matt Watson

Um, yeah, so for those.

34:46.90

Matt Watson

That’s a good analogy. Yeah yup yeah I was also going to say for those that are somewhat familiar. That’s what we refer to as altcoins. So it’ soon you have bitcoin and then like everything else is like the alt coins and you’re right? It’s like when bitcoin may go up 10%

34:50.62

Seth Maniscalco

Um, is kind of our bigger concept.

34:55.62

Seth Maniscalco

Right.

35:03.57

Matt Watson

A lot of times all these other alt coins may go up 20% when the other goes up 10% or they always go up more but they also go down more usually but definitely in big cycles if if bitcoin’s going to go up 5 x in value odds are the alt coins will do more than 5 x and and if you find the right project could be 100 x right and it’s.

35:08.94

Seth Maniscalco

Um, true.

35:20.70

Seth Maniscalco

Easily easily.

35:23.20

Matt Watson

Yeah, it’s It’s just really hard to find those and it’s it’s a lot of speculation and gambling. Really.

35:29.25

Seth Maniscalco

It’s not um, actually I would I would argue that because we’ve done it consistently for our investors for last six years based on the fundamentals that we hone on in this book. Um, you know I mean a bitcoin obviously right now we’re like over 40000% um 1 mistake I did I did make a mistake with Terraluna I’ll I’ll openly admit, we had terraluna when it was pennies. Um, and you know now we bumped over a hundred dollars and I was all excited like my group of investors we returned 1800 %

35:55.67

Matt Watson

Now. Yeah.

36:04.26

Seth Maniscalco

And I told my guys hey man this is a quadruple winner. We. You know we we we got the golden egg it’s time to sell and we sold we we cashed in 1800% we are happy. We rinsed and repeat. We put this money somewhere else and terra luna continued to run and perform it about 13000%. Well damn I made a mistake at 1 didn’t i.

36:22.50

Matt Watson

Yeah, so that so what’s what’s funny is is Luna and and tarra you at the ust crypto kind of go right back to our talking about earlier with ah with currency because it is. It’s basically a backing of of. The ust currency token right? which is like a dollar and it’s backed by the luna crypto but that’s it’s an interesting experiment right? Like it’s actually. Sort of like a giant ponzi scheme or like everybody believes the us t coin is worth a dollar and like the luna backs it or whatever. But anytime there’s like billions of dollars in this ust coin that could come crumbling down if everybody decides that it’s not worth a dollar anymore. So it’s it’s like really interesting.

37:11.51

Seth Maniscalco

I don’t think I don’t think crypto has a ah high point mainly because the dollar has no low point like you know the the purchase value of your dollar has eroded something like 96% in the last hundred years.

37:13.40

Matt Watson

Market dynamics.

37:23.77

Matt Watson

Oh yeah, yep.

37:28.76

Seth Maniscalco

And and oh yeah, they just printed 60% more of it. Yeah, you know there is no bottom to the dollar and that’s why if they continue to keep printing more and more of it and more and more of that money that didn’t exist yesterday flows into an asset that you can’t make more of man put me in front of that title wave.

37:45.90

Matt Watson

So what else? what else can you tell us about your book Again, you’re you’re the author of prohibited profits and talk about investing in technology cycles which is it makes a lot of sense.

37:56.35

Seth Maniscalco

Here’s here’s the thing like you don’t need to be the smartest man on the block. That’s one thing I have learned and I have had to humble myself I don’t need to be the smartest man I don’t need to know everything I don’t need to understand how blockchain programmers work. You know some guy sitting in ah in his in his. Home office plugging away on his keyboard for 8 hours a day I respect that but I have no idea what he does and and I’ll openly admit you to that I am not a software programmer. Um, but what I have gotten really good at is identifying patterns that happen again and again in the market and that is what the book prohibited profits is about and.

38:17.78

Matt Watson

Yeah.

38:33.23

Seth Maniscalco

And obviously I own crypto wealth coach and I can make your eyes roll in the back of your head with the best of them. You wouldn’t have a conversation about blockchain for in a few hours brother I will show up and I will do that with you but blockchain is temporary Blockchain is just here and now you know that’s the dotcom conversation we were having thirty years ago

38:49.41

Matt Watson

Um, yeah.

38:51.57

Seth Maniscalco

The bitcoin conversation was twelve years ago the terraluna conversation and the defi conversation is today the metaverse might be 10 years from now and you know if the big threat to bitcoin is quantum computers. Well that technology is coming to my friend those things exist and 20 years from now. We’re going to be talking about quantum-proof resistant blockchain that solves a problem that bitcoin can’t compete with you know? Um, so whether it’s cannabis alcohol gold prohibition. Oh yeah, now we’re talking about psilocybin magic mushrooms.

39:12.49

Matt Watson

Um, yeah.

39:26.99

Seth Maniscalco

Oregon and Colorado have legalized magic mushrooms and given the the federal government the one finger salutes. Well, that’s another trend that I want to get behind and be a part of because those states have already won and are collecting billions of dollars in in cannabis tax revenue.

39:33.96

Matt Watson

Um, yeah.

39:41.76

Matt Watson

Well and and what’s interesting about all these things and 1 you didn’t mention I don’t think you mentioned was Nfts which is blockchain related. They are their own craze over the last two years and it’s an example of a craze that I don’t understand I think it’s totally crazy and stupid. But. If you played the card cards right? You ride the wave whether or not you like really agree with it or not you just play the game and you make money and you just get out before the whole thing falls apart later I guess but um, nfts are another crazy wave right now.

40:12.72

Seth Maniscalco

I come in it from a different perspective I I don’t get into a market unless I have a 10 year time horizon or longer. Um and and and and I say that honestly with with the disclaimer that I am a technology investor and again with the patterns.

40:18.83

Matt Watson

There you go.

40:31.80

Seth Maniscalco

Technology tends to go through wicked corrections like this. We saw it with Amazon we saw Microsoft Tesla all of these companies have actually done 85% corrections in their price points and come back and later recovered. Because a lot of people would dip and run and take their money and think well this is over and they don’t ride out that technology wave and make generational wealth on the flip side of it. Um, so I only get into a market with like honestly if I’m not going to sit in something for for longer than 4 years I probably won’t bother. So the 85% corrections everybody who’s running away from nfts right now doesn’t scare me I’m I’m stacking my satoshis and I’m adding more because I see nfts as far more you know they’re more than digital apes right? We’re talking about membership. We’re talking about smart contracts when you go buy a plane ticket.

41:17.95

Matt Watson

Yes.

41:25.17

Seth Maniscalco

And you scan your your smartphone and you go check on the plane at the airport. That’s an Nft. You know it’s a very simple nf but that technology is going to continue in advance. You’re Goingnna get memberships with your nfts you’re gonna get exclusive rights to you know whenever you go join. I don’t know an entrepreneur group and you want to better yourself that’s going to come with t-ships membership access. This is what nfts is going to continue to compound and grow and that’s what I think a lot of people just aren’t seeing yet right like thirty years ago people couldn’t see that we were going to be making purchases online and having podcasts.

41:55.79

Matt Watson

Yep.

42:01.17

Seth Maniscalco

There there weren’t a whole lot of people envisioning that. But but here we are today 30 years from now Nfs. No one’s going to be saying do you own nfs that’s going to be a ridiculous question 30 years from now that’s going to be the standard. We’re gonna be doing everything with digital money. So you know that’s just how my mind thinks. Um, you’re not wrong to take your profits and get out and run. You’re not wrong at all I just come at it from a longer term horizon. You know you’re not right I’m yet wrong. We’re both right? Matt we are.

42:23.89

Matt Watson

Well and well and and you’re right because that’s the reason that I never made any money with bitcoin right? is like if I would have just kept the bitcoin I had in 2013 I would be way up right? I would be up like thousands of percentage or whatever right? But nope I sold it and then you know. Buy and sell along the way and let’s lose so you’re right? It’s you gotta take a long you gotta be very patient and stop trying to day trade the shit. It’s the people that try and day trade it and stuff that just get killed.

42:52.60

Seth Maniscalco

I want to give you a gold star because that that little nugget right there for for the audience was priceless. You’re a hundred percent correct and that that is that is what it’s all about that was profound. Thank you Matt and keep.

43:04.70

Matt Watson

Yeah, you’re and you’re right? It’s ah take the long term horizon of it of just like I’m gonna buy this thing and just forget about it for a long time and come back. You’ll be in good shape. Well.

43:14.19

Seth Maniscalco

When we can admit our mistakes and learn from the lessons. Whatever whatever the loss was doesn’t matter right now you learn the lesson. You got the real value out of it as long as we learn and move forward and don’t make the same mistake Next time we’re winning it is what is.

43:26.85

Matt Watson

That that tuition’s expensive though. But yeah you, That’s how you learn man how you learn.

43:33.60

Seth Maniscalco

But ah, it’s the first attempt in learning right? Fail FAIL first attempt in learning first you learn then you earn.

43:37.99

Matt Watson

All right? Well once to gate once again, today’s episode of startup hustle was sponsored by full scale helping you build software development teams quickly and affordably um, also check out, check us out on Facebook for the startup hu chat group. We also have a Youtube channel. And we’re doing a whole series on Nfts we talked about nftts a little bit today. Hopefully you catch some other episodes about Nftts we’re going a lot deeper into what they’re for and different use cases and talking to some cool people that ah that do things with Nftts in the industry so they’re they’re they’re pretty cool.

44:12.19

Seth Maniscalco

You fs theres something else manam because 1 thing we didn’t talk about was asset backed nfs if you want to get into Nfts right? There’s that conversation around deflationary money inflationary money. What’s backing your Nft. Well.

44:13.76

Matt Watson

Um, hopefully everybody.

44:29.30

Seth Maniscalco

We can actually back our Nfts with assets. There are diamond backed Nfts which are precious jewels right? You can also back your Nft with wine check out ravencoin for any of the audience ovr over the reality and bondly or some of my most more favorite Nfts. These are exciting projects that I predict will probably perform at over four thousand percent in the next twenty four months I may be wrong I might I may be right? but check them out. They are they are definitely worth your time. So go with a little.

45:00.30

Matt Watson

So for those that are listing. Obviously they can pick up your book prohibited profits I’m a guest. It’s on Amazon and all the other places you would buy books.

45:08.47

Seth Maniscalco

Amazon Kendo Barnes and noble and and of course my own website http://prohibitiveprofits.com

45:14.57

Matt Watson

And so for those that are interested in what you do they want to go to crypto crypto wealthcoach Dot C o.

45:23.60

Seth Maniscalco

You can and you know one one thing I’m obviously biased. You can buy the book on Amazon. It’s fifteen bucks but if if you buy it through our website. We will also give you a free thirty days to crypto wealth coach if that’s something you’re interested in. Try us out. And we’ll blow your mind in the group crypto is an opportunity that’s here and now and and this mission is bigger than you know than than what I can do with my own finances. This is about impacting others and the biggest gap that I see in the world today is a lack of financial education. And that is my mission I want to help folks I have made I’ve done very well in the investment world I’ve been able to escape the 9 to 5 work scene six years ago I work for myself now and it’s been the biggest impact on my life with both family and mental health in many aspects. And that’s my goal. That’s when I want to bring to the table whether you’re interested in crypto or any of the other markets. That’s my mission is to hear to help people figure out these patterns and get in front of them so that they can be profitable on their own.

46:28.42

Matt Watson

Well thank you so much for having you thanks so much for being on the show today and I’m sure you and I could go grab a year and talk about crypto for days on end. But ah, we’ll have to end it here for everybody.

46:42.37

Seth Maniscalco

Motions of Gratitude Matt I’m very grateful for the opportunity. Thank you again.

46:44.67

Matt Watson

All right? Thanks everybody and be sure to check out our other nft related episodes see ya.