Explaining Bitcoin to a Curious Friend

Josh Friedeman: 00:00:04

Welcome to the Business Bitcoinization show, the show dedicated to helping you enrich your life and grow your business with bitcoin, the hardest money on planet Earth.

Josh Friedeman: 00:00:15

I'm your host, Josh Friedeman and today I'm sitting down with my friend Anaya, who is actually not a bitcoiner.

Josh Friedeman: 00:00:22

I did this interview for an organization that I'm on the board of called Bitcoin is Better, whose focus is to educate middle class families about bitcoin.

Josh Friedeman: 00:00:32

I'll be sure to include the bitcoin is better YouTube channel in the show notes.

Josh Friedeman: 00:00:35

Luke Broyles and others have done similar videos on the YouTube channel and I think you might enjoy listening to some of them.

Josh Friedeman: 00:00:41

The entire focus of this series is to sit down with people who are not yet bitcoiners and answer the questions that they have about bitcoin.

Josh Friedeman: 00:00:48

I'd love to get your feedback about this interview on Fountain, so feel free to leave a comment there about what you think was interesting or what I could have explained differently or better.

Josh Friedeman: 00:00:57

We're going to get to our interview with Anaya right after this.

Josh Friedeman: 00:01:18

Anaya, welcome.

Josh Friedeman: 00:01:19

This is going to be one of a few interviews with bitcoin.

Josh Friedeman: 00:01:23

Is better of talking with people who do not yet own bitcoin just about bitcoin.

Josh Friedeman: 00:01:29

Any questions they might have.

Josh Friedeman: 00:01:31

We've already had some of these on the YouTube channel and looking forward to hearing from you today.

Josh Friedeman: 00:01:37

I don't want to steal too much of your thunder, I might add some additional things, but would you mind sharing a little bit about who you are so listeners know who, who they're hearing from?

Anaya: 00:01:45

Yeah.

Anaya: 00:01:46

So my name is Anaya.

Anaya: 00:01:47

Like Josh said, I'm a fitness specialist, personal trainer, just graduated college, looking for some.

Anaya: 00:01:55

Been thinking a lot about finance, of course.

Anaya: 00:01:58

So yeah, just looking forward to this interview and see what more I can.

Josh Friedeman: 00:02:03

Learn about it for sure.

Josh Friedeman: 00:02:05

And for listeners, context, you and I have had conversations two or three times probably about financial stuff, including bitcoin, but to my knowledge, you haven't pulled the trigger yet on bitcoin.

Josh Friedeman: 00:02:17

Right.

Josh Friedeman: 00:02:17

So we'll probably talk about that a little bit today.

Josh Friedeman: 00:02:20

You have brought some questions to the table, so I'm going to kick it over to you to share whatever the first question is you want to start with.

Anaya: 00:02:27

Yeah, so the first one's pretty simple, like what is bitcoin?

Anaya: 00:02:31

How does it work?

Anaya: 00:02:32

Explain it to me like I'm five year old.

Josh Friedeman: 00:02:36

Okay.

Josh Friedeman: 00:02:39

So I guess the simplest explanation and there's always ways you can go kind of further into this, but bitcoin is a type of money or maybe a system of value that no government or nation or corporation created.

Josh Friedeman: 00:03:00

And most of our money today is something that a nation created.

Josh Friedeman: 00:03:07

So this money is not only not created by any country, nation, or corporation, but it can't be controlled by anyone either.

Josh Friedeman: 00:03:16

And so it's basically a money that anyone can transact with to anyone else in the world.

Josh Friedeman: 00:03:23

It's free, open, and there are some things that you have to learn about it, but once you do learn them, it's pretty easy to use as well.

Josh Friedeman: 00:03:32

So I don't know if that answers that question sufficiently, but hopefully a five year old would at least have gotten a good bit of that.

Josh Friedeman: 00:03:40

Are there other things, like, more specific things about bitcoin that would be helpful to know kind of in that same thread?

Anaya: 00:03:49

Okay, so if it wasn't, who was it created by?

Anaya: 00:03:56

If it wasn't created.

Anaya: 00:03:57

Okay, who was it created by?

Anaya: 00:03:59

Let's start there.

Josh Friedeman: 00:03:59

Yeah.

Josh Friedeman: 00:04:00

So you may have heard the name before, but Satoshi nakamoto is the name of the person behind bitcoin.

Josh Friedeman: 00:04:08

We don't know who that person is, and some people think it was a group of people, but satoshi let people know that bitcoin was launching before it launched, and then at a certain point in time, he started bitcoin.

Josh Friedeman: 00:04:29

And basically what bitcoin is is a bunch of different nodes that communicate with each other and check up on each other to make sure that everything on the network is as it is supposed to be.

Josh Friedeman: 00:04:44

So at first it was him and like two or three other people, but over time, it's grown to where now there are a lot of nodes on the network which has made it much more secure.

Josh Friedeman: 00:04:55

But that's been a long process across the last almost 16 years.

Josh Friedeman: 00:04:59

launched at the beginning of: 2009

Josh Friedeman: 00:05:06

So we don't know who satoshi Nakamoto actually is.

Josh Friedeman: 00:05:09

Some people have theorized, some people have claimed to be satoshi Nakamoto.

Josh Friedeman: 00:05:14

And basically, if anyone hints at the fact that they might be or they might know who, a lot of people in the bitcoin community don't really want to hear much about it.

Josh Friedeman: 00:05:24

And part of that's because a lot of scammers have tried to kind of ride on the coattails of satoshi.

Josh Friedeman: 00:05:30

But also today, it doesn't really matter who satoshi Nakamoto is, because bitcoin is what it is, and even satoshi couldn't control that today.

Josh Friedeman: 00:05:43

So it's kind of taken on a life of its own and if there are any changes to bitcoin in order for those changes to be implemented, the majority of the network, which is just individuals all around the world, have to agree that that is the best thing.

Josh Friedeman: 00:06:01

So basically nothing is going to happen to bitcoin if the majority doesn't want it to happen.

Josh Friedeman: 00:06:11

So it's is that, that's why it's like it's not really feasible.

Josh Friedeman: 00:06:17

It's technically possible, but it's very unlikely that anyone could ever take bitcoin over.

Josh Friedeman: 00:06:23

And the more security there is, the more people on the network, the less and less likely it becomes.

Josh Friedeman: 00:06:27

So like even if the United States teamed up with a bunch of other countries, it would just be so expensive to try to even take over the network, get the majority of the network for even like 10 or 20, 30 minutes.

Josh Friedeman: 00:06:43

So that kind of goes down like maybe a more technical conversation than is worth talking about now.

Josh Friedeman: 00:06:52

But that's a little bit about who Satoshi is and also why it doesn't matter all that much who Satoshi is.

Anaya: 00:06:59

Yeah, yeah, I just was like, like computer based, like technology based money.

Anaya: 00:07:09

Would you say it like that?

Josh Friedeman: 00:07:11

Yeah, yeah.

Josh Friedeman: 00:07:12

So I'm trying to think of the best way to say this, but essentially it's a bunch of.

Josh Friedeman: 00:07:21

It's, it's the largest computing network in the world and all of these computers are making sure that everyone's playing by the rules and they are confirming that the network is operating as it's supposed to operate.

Josh Friedeman: 00:07:44

So then that's where it comes into.

Josh Friedeman: 00:07:46

And I don't know if you have a question about this or not, but bitcoin mining, basically what mining is.

Josh Friedeman: 00:07:53

Yeah, there are a couple things about bitcoin mining.

Josh Friedeman: 00:07:56

First of all, there is the block reward, which is how new bitcoin are issued.

Josh Friedeman: 00:08:04

You may have heard that there will only ever be 21 million Bitcoin.

Josh Friedeman: 00:08:08

all the way out into the year: 2140

Josh Friedeman: 00:08:19

And right now the block reward is 3.125 bitcoin.

Josh Friedeman: 00:08:28

So it's, you know, every 10 minutes a new block is mined.

Josh Friedeman: 00:08:32

And so whoever, whatever computer mines that block gets the 3.125 bitcoin.

Josh Friedeman: 00:08:41

And frequently these days a miner will be a part of a larger pool because let's just say you have like a, a single bitcoin miner operating in your home, which some people do.

Josh Friedeman: 00:08:53

They the best use case for like a single miner by itself.

Josh Friedeman: 00:08:58

Is honestly just like it's, it's, it's a high powered computer that specializes in this particular bitcoin mining algorithm and it produces a lot of heat.

Josh Friedeman: 00:09:09

So I have interviewed people before who are finding ways to use the heat from bitcoin miners to, you know, heat homes or to heat greenhouses, different things like that.

Josh Friedeman: 00:09:22

But like a single miner would be such a small amount of the total mining power on the network that you're not likely to actually mine a block with your miner.

Josh Friedeman: 00:09:33

So usually what people do is they'll join a mining pool.

Josh Friedeman: 00:09:37

And so whenever a miner from that mining pool wins the opportunity to finalize this next minute batch of transactions, they get the 3.125 bitcoin, the block reward, and they'll split it among everyone in the pool.

Josh Friedeman: 00:09:54

So the more people you have in the pool, the more likely you are to win a block.

Josh Friedeman: 00:09:57

And so it kind of all evens out over time.

Josh Friedeman: 00:10:00

But the block itself is a batch of transactions.

Josh Friedeman: 00:10:05

And like I said, on average every 10 minutes a new block is completed.

Josh Friedeman: 00:10:13

And it's, you know, whatever transactions were in the queue to be kind of next in line based off of the fees they're willing to pay, they will be finalized.

Josh Friedeman: 00:10:24

And then there's, you can go to a, a website called Mempool Space.

Josh Friedeman: 00:10:29

For anyone listening right now, Mempool Space will show all of the blocks or all of the transactions that are waiting to be finalized in a block.

Josh Friedeman: 00:10:40

And if you want to pay more money, a little bit more fees, then you can get your transaction finalized more quickly.

Josh Friedeman: 00:10:47

And if you're a little more cost conscious, a little more cost conscious, then you can pay less fees and it might take a little bit more time for your transaction to actually finalize.

Josh Friedeman: 00:10:58

So that's what, that's what bitcoin mining is.

Josh Friedeman: 00:11:02

And I don't know if you have any questions about that or if you want to go to the next one.

Anaya: 00:11:07

Yeah, so it's like a block worth a certain amount of money or is just like.

Josh Friedeman: 00:11:14

That's a good point.

Josh Friedeman: 00:11:15

The block reward is kind of like the main chunk that a computer would get or a miner.

Josh Friedeman: 00:11:22

There's a person behind every computer.

Josh Friedeman: 00:11:26

So right now, since bitcoin is just past 100,000, that would be over $300,000 that the miner would get.

Josh Friedeman: 00:11:38

Also though I'd mentioned fees earlier and every, every set of transactions has fees associated with it and there have been times even in the last, like in the last probably six, seven, eight months where the fees from the transaction have actually been higher.

Josh Friedeman: 00:12:00

Than the block reward itself.

Josh Friedeman: 00:12:02

So like, I guess the reason I bring this up is because every four years there's something called the bitcoin having, which is kind of a programs time where the block reward gets cut in half because originally it was 50 bitcoin for every 10 minutes, which is crazy.

Josh Friedeman: 00:12:21

when I was in College and in: 2009

Josh Friedeman: 00:12:42

But I had no idea about it back then.

Josh Friedeman: 00:12:43

And now there's so much more computing power on the network that it doesn't even make sense for a computer, just like a regular Mac or a PC, to try to mine bitcoin on the bitcoin network because the hash page should be so uncompetitive.

Josh Friedeman: 00:12:58

That's why you have to have these specialized miners called asics.

Josh Friedeman: 00:13:02

So you do have the block reward, but then you also have the fees attached to it.

Josh Friedeman: 00:13:08

And really the fees are based on supply and demand.

Josh Friedeman: 00:13:11

I mean, it's a total free market 24 7, 365.

Josh Friedeman: 00:13:16

The Bitcoin network is always going, if you want to send money to someone over bitcoin, then, you know, in the form of bitcoin, then you can do that.

Josh Friedeman: 00:13:27

You'll have to pay a fee.

Josh Friedeman: 00:13:28

And sometimes the fees are really high if everyone's trying to transact on the network at the same time.

Josh Friedeman: 00:13:33

But sometimes the fees are very low.

Josh Friedeman: 00:13:35

So it sort of, you know, depends on the supply and demand as to how high the fees are.

Josh Friedeman: 00:13:41

But in the future, people expect for the fees to actually be greater than the block reward as like just the norm.

Josh Friedeman: 00:13:49

And so I don't.

Josh Friedeman: 00:13:51

I think that should probably answer your question pretty well.

Josh Friedeman: 00:13:53

itcoins are mined in the year: 2140

Josh Friedeman: 00:14:06

Will it still be secure?

Josh Friedeman: 00:14:07

Will there still be people that are wanting to mine?

Josh Friedeman: 00:14:11

And what really, what mining becomes at that point is not receiving new bitcoins, but it is processing transactions and earning fees for that.

Josh Friedeman: 00:14:21

And by that point in time, the block reward will be so small and the fees will be so much greater than the block reward that even after the last bitcoin is mined, the network will still continue and people will just continue earning fees as they want to.

Josh Friedeman: 00:14:35

So I think that probably Answers your question.

Josh Friedeman: 00:14:38

I don't know if there's any follow ups you have or if you want to go to the next one.

Anaya: 00:16:48

So what makes Bitcoin like, trustworthy?

Josh Friedeman: 00:16:54

Well, so a couple things.

Josh Friedeman: 00:16:57

First of all, like I said, it's the largest and strongest computing network in the world and all of the nodes and all of the miners are paying attention to make sure that all the other nodes are operating by the rules.

Josh Friedeman: 00:17:18

And if someone's not playing by the rules, they're, they can't participate.

Josh Friedeman: 00:17:24

So that's one positive thing that, that makes it very secure.

Josh Friedeman: 00:17:30

Another thing is that Bitcoin is open source, so anyone can join, anyone can see the code.

Josh Friedeman: 00:17:39

Technically you could get the code and copy it and change it to your liking.

Josh Friedeman: 00:17:44

That gets into a different conversation.

Josh Friedeman: 00:17:46

But you know, you could create your own version of Bitcoin and people have done that in the past, but no one has an incentive necessarily to use your version of Bitcoin.

Josh Friedeman: 00:17:55

They'd rather use the version of Bitcoin that everyone else is using because they can transact with anyone who's using it.

Josh Friedeman: 00:18:03

So you'd want to use the, the most used and most secure network.

Josh Friedeman: 00:18:09

So those would probably be some of the main things that I would say is just it's already extremely large and secure computing network and you can verify the rules for yourself, you can look at the code.

Josh Friedeman: 00:18:22

I mean, you and I are probably in a similar boat where we're not particularly techy and if we looked at the code we probably wouldn't be able to see too much.

Josh Friedeman: 00:18:31

Yeah, but you can verify everything for yourself and you can also run your own node and basically that means you can enforce the rules you care to enforce.

Josh Friedeman: 00:18:40

So if someone else did try to create some, some different rules or play by different rules in the network, you could reject anything they were doing because they're not playing by the consensus rules, which is the rules you're playing by.

Josh Friedeman: 00:18:55

So I think that's probably the best explanations for why Bitcoin is trustworthy and secure.

Josh Friedeman: 00:19:06

Some people are concerned by the digital aspect.

Josh Friedeman: 00:19:11

What I would say is that across the last few years, we've probably seen that humans are far more likely to err when it comes to excessive money printing and things like that.

Josh Friedeman: 00:19:28

Like our, we don't need to necessarily get into this, but there have been so many new dollars created across the last four or five years, and anytime someone has the ability to print more money, they're going to.

Josh Friedeman: 00:19:43

Well, the rules of Bitcoin are baked in.

Josh Friedeman: 00:19:47

It's following its code and there will never be more than 21 million Bitcoin.

Josh Friedeman: 00:19:53

And so at least when it comes to the limited aspect of bitcoin, you can have confidence that it will be limited, because you can see in the code that it will be limited.

Josh Friedeman: 00:20:06

Whereas when it comes to the Federal Reserve or any number of politicians, they might say one thing to get elected, but once they get into office or to get appointed, but once they get into office, they.

Josh Friedeman: 00:20:19

They can kind of do whatever they want.

Josh Friedeman: 00:20:21

So I would say that the current code that is enforced by nodes on the network is much more likely to remain true and as it is today, than people getting into office and kind of just doing whatever they want when they have power.

Anaya: 00:20:42

Gotcha.

Anaya: 00:20:43

So you talked a little bit about mining.

Anaya: 00:20:47

What is.

Anaya: 00:20:48

Like, what does that look like?

Anaya: 00:20:49

Like one bitcoin.

Anaya: 00:20:51

Like, how do you.

Anaya: 00:20:52

What is that worth?

Josh Friedeman: 00:20:55

Yeah.

Josh Friedeman: 00:20:55

So right now, first of all, bitcoin is very volatile.

Josh Friedeman: 00:20:59

It's been volatile to the upside over the long term, but the volatility does give some people pause.

Josh Friedeman: 00:21:08

That said, bitcoin has just recently passed over $100,000 per coin.

Josh Friedeman: 00:21:15

And right after it did that, that was actually two nights ago, as of this recording.

Josh Friedeman: 00:21:21

And then the next day, it fell back below $100,000, and now it's back up over $100,000 again.

Josh Friedeman: 00:21:27

So that's what it's worth.

Josh Friedeman: 00:21:31

Right now.

Josh Friedeman: 00:21:32

The question that a lot of people are asking is what will it be worth in the long run?

Josh Friedeman: 00:21:37

And that's the big question.

Josh Friedeman: 00:21:38

Yeah, I don't know if you want to go into that or not, but right now, one bitcoin is worth about $100,000.

Josh Friedeman: 00:21:48

What Bitcoin will be worth is a question for much debate.

Josh Friedeman: 00:21:54

Some people think that it will be worth nothing in the future.

Josh Friedeman: 00:21:59

A lot of those people haven't taken a lot of time to understand bitcoin.

Josh Friedeman: 00:22:04

One of the critiques that I've heard in the past is just that the United States will shut it down because it might become a threat to the dollar.

Josh Friedeman: 00:22:14

With the new administration coming into office in January, it seems like currently that's not much of a concern, even if it were feasibly possible.

Josh Friedeman: 00:22:26

But like I was saying earlier, governments didn't create bitcoin and they can't control it, as crazy as that sounds, because we're used to governments being able to shut down whatever they want.

Josh Friedeman: 00:22:35

But the reason they can do that is because so many things in our world are centralized.

Josh Friedeman: 00:22:40

And so whoever can call up whoever else and say, hey, do what we want you to do.

Josh Friedeman: 00:22:48

Or there are going to be some negative ramifications for you.

Josh Friedeman: 00:22:52

But with bitcoin, that's not really the case because there are all these nodes running around the world.

Josh Friedeman: 00:22:59

No one country can shut them all down.

Josh Friedeman: 00:23:02

And we even saw back in: 2021

Josh Friedeman: 00:23:08

, yeah, I think: 2021

Josh Friedeman: 00:23:18

And quickly they started opening up other places around the world because you can just kind of go wherever you're welcomed.

Josh Friedeman: 00:23:25

So I'm not too concerned about the government shutting bitcoin down, any government.

Josh Friedeman: 00:23:32

But then it's like, what is the value of a network that's open to anyone, that anyone can trade on, anyone can transfer value around the world?

Josh Friedeman: 00:23:48

What is something like that worth?

Josh Friedeman: 00:23:51

No government can shut it down.

Josh Friedeman: 00:23:55

And that's.

Josh Friedeman: 00:23:57

I mean.

Josh Friedeman: 00:23:58

I mean, I think there's a ton of value there.

Josh Friedeman: 00:24:01

Actual numbers.

Josh Friedeman: 00:24:02

A lot of people believe that bitcoin could get to 200,000 or more across the next year.

Josh Friedeman: 00:24:14

This is traditionally the year after, about 18 months after the having, which just happened in April, is the.

Josh Friedeman: 00:24:24

The most significant time for bitcoin's price increase.

Josh Friedeman: 00:24:27

And then following that, the year after, there has tended to be a significant correction where bitcoin will fall 60, 70, sometimes 80%.

Josh Friedeman: 00:24:40

There's some question as to whether or not that will happen this time.

Josh Friedeman: 00:24:43

And, you know, it's anyone's guess, but we're looking at potentially 200,000 to well above that if the United States adopts it as a strategic reserve asset.

Josh Friedeman: 00:24:57

And then other countries fall in line.

Josh Friedeman: 00:25:00

If the United States wants to buy a million bitcoin, like some Republicans in the Senate have suggested, and others as well, then a lot of other countries are going to want to buy hundreds of Thousands.

Josh Friedeman: 00:25:15

There's only 21 million.

Josh Friedeman: 00:25:17

And so, like, what does it look like when nation states start clamoring to get a piece of the pie?

Josh Friedeman: 00:25:24

There's no more can be created.

Josh Friedeman: 00:25:26

So it's like, that's one of the most interesting things to me about bitcoin, which is it's so scarce that, like, no matter what, you can't create more.

Josh Friedeman: 00:25:36

Even with something like gold, if there's enough financial incentive, you can go out and find more gold.

Josh Friedeman: 00:25:43

A lot of times people know what the gold is.

Josh Friedeman: 00:25:45

The gold price is just not high enough to warrant going down into the earth and getting it.

Josh Friedeman: 00:25:51

So I think that we could see some significant price appreciation in the next year or so.

Josh Friedeman: 00:25:59

Now, it's also possible that something terrible happens.

Josh Friedeman: 00:26:03

I don't think World War 3 is going to happen, but that's been tossed around.

Josh Friedeman: 00:26:07

And so if we go into some significant war or significant recession or something like that, everything's going to be hit.

Josh Friedeman: 00:26:15

And you know, bitcoin might significantly be hit if that happens.

Josh Friedeman: 00:26:20

But there are a lot of people that would say that in the next 10 years, maybe even less than that, bitcoin is likely to hit a million dollars per coin, which would be 10 times growth from where it is right now.

Josh Friedeman: 00:26:35

And I would tend to be in that camp.

Josh Friedeman: 00:26:38

How and when exactly, it's hard to say.

Josh Friedeman: 00:26:42

But that's sort of the, the, the metric I'm operating under now also.

Josh Friedeman: 00:26:51

And some other people have tried to value it by saying, what percentage of the total assets in the world is bitcoin right now?

Josh Friedeman: 00:27:00

And then what, you know, where might it capture value from?

Josh Friedeman: 00:27:05

So, for instance, would you rather hold something in this digital and is significantly increasing in value every four years, or would you rather hold real estate, which increases in value but also has taxes that you have to pay, property taxes, upkeep you have to worry about, tenants.

Josh Friedeman: 00:27:28

Potentially has a lot of other headaches with it.

Josh Friedeman: 00:27:30

Would you rather hold digital, a digital asset like bitcoin or real estate that has a bunch of headaches.

Josh Friedeman: 00:27:38

And so a lot of people think that some value will be, will be taken from real estate, some from bonds.

Josh Friedeman: 00:27:45

Some people might say instead of Tesla or Nvidia or Apple, Amazon, I'm actually going to put a little bit of this money into bitcoin.

Josh Friedeman: 00:27:53

So take money from equities like all these different places.

Josh Friedeman: 00:27:57

If bitcoin siphons a little bit, a few percentage points from each one, it's going to grow significantly.

Josh Friedeman: 00:28:04

That's not even talking about nation state adoption and things like that.

Josh Friedeman: 00:28:08

And so there's a lot of upside, potentially infinite upside.

Josh Friedeman: 00:28:14

One of the memes that circles around in the bitcoin world is infinity divided by 21 million, which is that bitcoin can hold the value of everything.

Josh Friedeman: 00:28:29

Like, there's no reason that a bitcoin couldn't have some crazy high astronomical number.

Josh Friedeman: 00:28:36

There's going to be 21 million and it'll be worth whatever people think it's worth.

Josh Friedeman: 00:28:41

But if nations start piling in, corporations, individuals, everyone wants to get a piece of the pie.

Josh Friedeman: 00:28:48

There's only so much to go around.

Josh Friedeman: 00:28:50

So I guess the last thing I'll say here before I pause is that I think the number was there's only enough bitcoin for every millionaire in the world to have about 0, 28.

Josh Friedeman: 00:29:07

So you know, some, somewhere between a quarter and a third of a bitcoin and that's just every millionaire.

Josh Friedeman: 00:29:13

And so like if the average person out there, and you know bitcoin is better, is focused on bitcoin education for middle class families, if the average family out there could get 0.1 or 0.2 Bitcoin, which is like it's starting to be a lot of money for a lot of people.

Josh Friedeman: 00:29:34

You know, 0.1 Bitcoin right now is $10,000.

Josh Friedeman: 00:29:38

But if you can start getting a piece of the pie right now and keep it in long term savings, then over the next 10, 15, 20 years, it'll probably be a whole lot more than it is today.

Anaya: 00:29:58

So how do you have access to that money?

Anaya: 00:30:01

Like how would you be able to use it?

Anaya: 00:30:07

You know, we have like debit cards, credit cards, like how do you get that money?

Josh Friedeman: 00:30:10

Money out There are a lot of great ways to do this these days.

Josh Friedeman: 00:30:17

Most people listening to this probably have cash app.

Josh Friedeman: 00:30:21

If you have cash app, that's a place where you can go and just buy bitcoin.

Josh Friedeman: 00:30:27

And then right now, you know, there are three main categories that people place money in as a money develops.

Josh Friedeman: 00:30:37

First of all, it is a store of value, which basically is just savings.

Josh Friedeman: 00:30:42

Right.

Josh Friedeman: 00:30:43

You're putting your time, your effort into something and the question is, do you want to put it into something like bitcoin?

Josh Friedeman: 00:30:50

That may be volatile, but you know that if you have 0.1 Bitcoin, you're always going to have 0.1 Bitcoin out of the 21 million available or across the years, do you want to save in dollars?

Josh Friedeman: 00:31:04

You know, in dollars.

Josh Friedeman: 00:31:06

When I was born in the early 90s, a dollar was worth twice what it is today.

Josh Friedeman: 00:31:14

So probably more than that.

Josh Friedeman: 00:31:17

And so like across 30 plus years, my dollars have become half of what they used to be.

Josh Friedeman: 00:31:26

And if inflation continues to increase or remain higher than is kind of like optimal in people's eyes, which is like the 2% target is what people, I guess I'd say people the Federal Reserve likes.

Josh Friedeman: 00:31:41

If it stays higher than that on average across the next 10 years, then the value of your dollars will decrease even more quickly.

Josh Friedeman: 00:31:50

Yeah, so a great thing to do is just buy a little bit when you can.

Josh Friedeman: 00:31:55

Some people dollar cost average, which is every day, week, month, whatever, maybe it's every time you get a paycheck you can turn some of that into bitcoin.

Josh Friedeman: 00:32:05

So also there are a couple other resources that I've either used or would recommend that are kind of connected to how can you use it on a day to day basis or like more practical ways?

Josh Friedeman: 00:32:20

Just as of the recording of what we're doing today.

Josh Friedeman: 00:32:24

I don't know when this will be released, but a guy named Jack Mahlers who is the CEO of Strike, he just released this feature for his app, which is a way that you can buy and sell bitcoin.

Josh Friedeman: 00:32:38

You can turn it into dollars.

Josh Friedeman: 00:32:41

He basically lives, he has zero dollars, he just lives off of bitcoin and he has enough bitcoin to where he can stomach the volatility.

Josh Friedeman: 00:32:50

But over time, you know, his net worth increases significantly.

Josh Friedeman: 00:32:56

But he just released this feature on Strike where you could pay your bills so you can save.

Josh Friedeman: 00:33:03

And also Strike has this feature which I've not used, but has this feature where you can receive your paycheck into Strike and have some or all of it turned into bitcoin like instantaneously.

Josh Friedeman: 00:33:18

And so, you know, just there was a time a couple of years ago when bitcoin hit the cycle low down at 20,000, I think actually like 16 something.

Josh Friedeman: 00:33:33

But it was, it was in that, that, that time period where I had, you know, well, well less than $100 on strike.

Josh Friedeman: 00:33:43

And I was just like, where do I have some extra money where I can buy bitcoin?

Josh Friedeman: 00:33:47

I bought bitcoin and it's more than 5x from there just because I held it there.

Josh Friedeman: 00:33:54

And so, you know, you think about it, you put 100 bucks at, you know, $16,000.

Josh Friedeman: 00:34:01

When, when Bitcoin is worth $16,000 now it's worth 100,000.

Josh Friedeman: 00:34:06

That $100 is more than 500 now.

Josh Friedeman: 00:34:10

And so that's crazy.

Josh Friedeman: 00:34:11

Like over the long term, if you have long term savings, that's the value of bitcoin.

Josh Friedeman: 00:34:16

But you can pay your bills with Strike.

Josh Friedeman: 00:34:19

Just with the bitcoin in the account, you can pay your bills with Strike.

Josh Friedeman: 00:34:21

Another great one is Fold.

Josh Friedeman: 00:34:23

And Fold has a debit card attached to it and it has some very similar features.

Josh Friedeman: 00:34:31

But you can save in bitcoin and you can push that bitcoin to your card in the form of dollars and then you can spend that like you would a normal debit card.

Josh Friedeman: 00:34:43

So those are a couple possibilities that like how you can kind of interface with it in the real world and benefit from it and kind of easily transfer between dollars and bitcoin when it's most advantageous for you.

Josh Friedeman: 00:34:56

Another one, you know, listeners to this may not know, but I host a podcast called Business Bitcoinization where I'M interviewing business owners about how they're using Bitcoin.

Josh Friedeman: 00:35:06

And frequently it's, you know, they're keeping it on their balance sheet or they might be accepting it.

Josh Friedeman: 00:35:11

There are some other things that people do that are a little more clever that may not be worth talking about right now, but you can accept bitcoin in your business.

Josh Friedeman: 00:35:20

Or like, you know, if I were to sell you something, or you were to sell me something, if we wanted to, we can make that transaction in bitcoin.

Josh Friedeman: 00:35:29

And so there are practical ways that people can use it.

Josh Friedeman: 00:35:32

And that, that's where it kind of gets that second form of money, the second, I guess, level of money, which is a medium of exchange that's like cash today.

Josh Friedeman: 00:35:44

Like, everyone pays for things with dollars.

Josh Friedeman: 00:35:48

Dollars are our medium of exchange.

Josh Friedeman: 00:35:51

And that is the future, I believe, for bitcoin.

Josh Friedeman: 00:35:56

There are some things that make this easier.

Josh Friedeman: 00:35:58

You know, the base layer, a new set of transactions, finalizes every 10 minutes.

Josh Friedeman: 00:36:03

And so you're not going to pay for coffee on the bitcoin network.

Josh Friedeman: 00:36:08

Maybe the fees are really high.

Josh Friedeman: 00:36:09

So it's like, you know, costs a dollar or $2 to buy your $5 coffee.

Josh Friedeman: 00:36:15

You have to wait for 10 minutes before the transaction clears.

Josh Friedeman: 00:36:17

Like, that's, that's not practical.

Josh Friedeman: 00:36:19

No one's doing that.

Josh Friedeman: 00:36:19

It used.

Josh Friedeman: 00:36:21

The network was fast enough and cheap enough to where I say fast enough.

Josh Friedeman: 00:36:27

There was not as much competition, so the fees were lower, and it was a little more feasible to spend money on the main chain, kind of the base layer of bitcoin.

Josh Friedeman: 00:36:38

But now there are what you call layer 2s that are continuing to be developed, like the lightning network.

Josh Friedeman: 00:36:44

The lightning network is a way for people to send money back and forth, basically at the speed of the Internet.

Josh Friedeman: 00:36:49

So it's a lot easier, it's a lot faster, and there are, like, hardly any fees involved.

Josh Friedeman: 00:36:56

That's how a lot of the medium of exchange will take place.

Josh Friedeman: 00:37:00

With bitcoin, there's some other layer twos and even layer threes that are being developed right now.

Josh Friedeman: 00:37:05

And then the final one is a unit of account.

Josh Friedeman: 00:37:08

And the unit of account is kind of how you measure things.

Josh Friedeman: 00:37:12

You know, when someone says, how much is the coffee?

Josh Friedeman: 00:37:16

And they say it's the latte, you know, it's like $5.

Josh Friedeman: 00:37:19

They don't say it's, you know, 5,000 SATs, they say $5.

Josh Friedeman: 00:37:26

But when you get to the level where people are valuing things in bitcoin, then that's a significant level, like, of adoption, because people are thinking in sats.

Josh Friedeman: 00:37:37

They're not thinking in cents, they're thinking in sats, which sats are just little tiny amounts of bitcoin.

Josh Friedeman: 00:37:43

Every bitcoin can be broken down into 100 million satoshis or sats.

Josh Friedeman: 00:37:49

And so, like, you don't have to buy a whole bitcoin.

Josh Friedeman: 00:37:52

I don't know if.

Josh Friedeman: 00:37:52

I think you probably know that by now, but you could get.

Josh Friedeman: 00:37:56

I think It's a thousand sats for $10 right now, so.

Josh Friedeman: 00:38:01

Or a thousand sats for a dollar.

Josh Friedeman: 00:38:03

So 10,000 sats for $10.

Josh Friedeman: 00:38:04

Yeah.

Josh Friedeman: 00:38:05

So the math is a little bit easier when it's The Bitcoin's at $100,000.

Josh Friedeman: 00:38:11

But you, you know, you could buy pennies worth of bitcoin as opposed to having to pay $100,000, which is for most people just, you know, impossible.

Josh Friedeman: 00:38:23

So that's a long tangent, but that's.

Josh Friedeman: 00:38:26

Some of those are some of the ways you can use bitcoin.

Josh Friedeman: 00:38:28

And I would highly recommend an app like Strike or like Fold if, if you wanted to kind of be interfacing with it a bit more in an easier way.

Josh Friedeman: 00:38:40

One other thing about Fold is you can buy like, gift cards and get a percentage back in bitcoin as rewards.

Josh Friedeman: 00:38:48

So those are some potential things that you or other people could use if they were interested.

Josh Friedeman: 00:38:53

I have both apps.

Josh Friedeman: 00:38:54

I use both to some degree, but I will probably be using both of them more in the future.

Josh Friedeman: 00:39:03

So.

Josh Friedeman: 00:39:03

Any other questions or maybe follow ups to what I've just said?

Anaya: 00:39:10

Oh, I know you mentioned fees and people like.

Anaya: 00:39:14

Or trading their bill or selling it or anything like that.

Anaya: 00:39:17

Like, why would, why would you want to, though?

Anaya: 00:39:19

Isn't it better for you to keep it so to build up.

Josh Friedeman: 00:39:25

That's the crazy thing about markets in general is that, you know, everyone has different reasons for doing what they're doing.

Josh Friedeman: 00:39:33

Some people are not nearly as bullish about bitcoin.

Josh Friedeman: 00:39:37

So you get to the psychological level of $100,000 and you want to sell because you're like, I've been holding since it was $400, and whenever it gets to a hundred thousand or 98,000, it's like, close enough you're going to go and take some profits.

Josh Friedeman: 00:39:53

But I agree that, like, with the money that you can save for the long term, keeping it in bitcoin for as long as possible will very likely be incredibly valuable for you.

Josh Friedeman: 00:40:07

So there are, yeah, there are people that like to, you know, take these leveraged positions against bitcoin and like, if it goes down, they make a whole bunch of money and then there are people that are never selling.

Josh Friedeman: 00:40:22

But the more people that learn about bitcoin and see the value and the potential in bitcoin, the more people that become like that.

Josh Friedeman: 00:40:30

And each, you know, each cycle, each time bitcoin goes super high.

Josh Friedeman: 00:40:34

There's this whole new group of people that come in and say, like, okay, I discounted this when I first heard about it, you know, last time, or two times ago, or 10 years ago, whenever it was.

Josh Friedeman: 00:40:45

But now it's clear to me that bitcoin is probably here to stay, so I should start taking it more seriously.

Josh Friedeman: 00:40:51

And every time that happens, those people buy bitcoin and they buy bitcoin with the intent of never selling or not selling for 10, 20, 30 years or passing it to their kids.

Josh Friedeman: 00:41:05

And when that happens, the bitcoin that's available on the market decreases.

Josh Friedeman: 00:41:11

You know, like, so let's say that, you know, 15 million bitcoin end up getting purchased.

Josh Friedeman: 00:41:19

And they're like, people say, we're never selling this.

Josh Friedeman: 00:41:22

It might be more than that today, but if that's the case, that means there's only 6 million out there.

Josh Friedeman: 00:41:28

Well, there's also a bunch of bitcoin that are lost or otherwise not available.

Josh Friedeman: 00:41:34

Like, Satoshi has about a million bitcoin in his wallet, and those have not moved since he kind of fell off the face of the earth.

Josh Friedeman: 00:41:43

And so those probably won't move.

Josh Friedeman: 00:41:45

And so, like, There are about 4 million bitcoin out there that probably won't move because they're lost or for whatever other reason.

Josh Friedeman: 00:41:54

And so you're getting to this point where the amount of bitcoin available to be traded or bought and sold on a given day is tiny.

Josh Friedeman: 00:42:03

And that's the bitcoin people are going to be fighting over.

Josh Friedeman: 00:42:06

That's the bitcoin they're going to be offering their money for.

Josh Friedeman: 00:42:10

And at a certain point in time, people are just gonna say, I have this bitcoin and I don't want to get rid of it.

Josh Friedeman: 00:42:16

And that's when the price could really skyrocket, when there's this crazy crunch because everyone wants it, and people realize there's not enough to go around right now.

Josh Friedeman: 00:42:27

say you got in back in early: 2017

Josh Friedeman: 00:42:39

Well, those five are probably locked up.

Josh Friedeman: 00:42:42

You're saying, I went from a thousand to a hundred thousand.

Josh Friedeman: 00:42:45

There's no way I'm going to sell this stuff now because I think it's going to go so much higher.

Josh Friedeman: 00:42:52

So.

Josh Friedeman: 00:42:53

Yeah.

Josh Friedeman: 00:42:54

Why do people buy and sell?

Josh Friedeman: 00:42:55

Who knows?

Josh Friedeman: 00:42:56

Everyone has a reason, but at the end of the day the best thing to do is to buy it, to hold it and to reap the benefits in the long term.

Anaya: 00:43:05

Yeah.

Josh Friedeman: 00:43:08

So I don't know if we've addressed all of your questions.

Josh Friedeman: 00:43:11

Do you have some additional ones that are worth chatting through or some additional things that have come up during the course of this conversation?

Anaya: 00:43:19

No, I think you, you pretty much hit everything.

Anaya: 00:43:22

Even the questions I didn't ask you went into.

Anaya: 00:43:24

So it's starting to, I think it's starting to actually make sense now.

Anaya: 00:43:30

Yeah, I think I'm starting to get it a little bit.

Josh Friedeman: 00:43:34

Well, any, you already know this, but any guest that comes on and shares, who's not yet A Bitcoiner gets $50 of Bitcoin.

Josh Friedeman: 00:43:43

So you are going to get your first bitcoin given to you after this recording.

Josh Friedeman: 00:43:49

And it's a good step in the, hopefully what you would consider the right direction.

Josh Friedeman: 00:43:54

But I would just would like to reiterate to anyone listening that if you have money that you can save for the long term, bitcoin is a great way to do this.

Josh Friedeman: 00:44:07

Even now, you know, $100,000, people say, can't go any higher, but they've said that, you know, at 60,000, they set it at 10,000, they've set it at a thousand.

Josh Friedeman: 00:44:17

People were selling at 400 because they bought it at 100 and it went up to 400.

Josh Friedeman: 00:44:22

You know, I'm just sort of making these numbers up.

Josh Friedeman: 00:44:24

But people, people have sold early and they've realized the error of their ways across the long term.

Josh Friedeman: 00:44:33

So anyone who does, especially middle class families that don't have a lot of extra money, if you can't put some of that longer term savings account or whatever else, then it's worth considering what bitcoin could do for your family or you as an individual in the long term.

Josh Friedeman: 00:44:51

So, and I, I'm going to kick it back over to you for any final thoughts you may have before we finish up.

Anaya: 00:44:58

No, this was good.

Anaya: 00:45:01

I'm probably, definitely gonna have.

Anaya: 00:45:02

I can't think of any more questions right now, but once I get into it and actually start like investing in it, I think I'll definitely have more questions for sure.

Anaya: 00:45:14

But that'll be offline, of course.

Anaya: 00:45:16

But this is great.

Anaya: 00:45:17

Yeah, I learned a whole lot more.

Josh Friedeman: 00:45:20

Well, now you can hopefully share it with other people because there are going to be more and more people talking about bitcoin across the next year as the price very likely continues to increase.

Josh Friedeman: 00:45:29

And now you probably know more than 99% of people out there.

Josh Friedeman: 00:45:35

Maybe that's a little generous, but you know a good bit more because you've actually taken just 45 minutes here and a couple previous conversations to learn at least a little bit about it.

Josh Friedeman: 00:45:46

And I think it's a little less, hopefully a little less cryptic now.

Josh Friedeman: 00:45:49

Hope my answers have been clear enough.

Anaya: 00:45:52

Yeah.

Josh Friedeman: 00:45:53

Great.

Josh Friedeman: 00:45:54

Well, Anaya, thank you so much for your time today.

Josh Friedeman: 00:45:56

It's been a pleasure.

Anaya: 00:45:57

Yeah, thanks for having me.

Josh Friedeman: 00:45:59

Well, friends, it's a wrap.

Josh Friedeman: 00:46:00

Thanks so much for listening to this episode of the business bitcoinization show.

Josh Friedeman: 00:46:04

Remember to check out the bitcoin is better YouTube channel and leave feedback about how you felt this interview went.

Josh Friedeman: 00:46:10

I'd love to hear what you have to say.

Josh Friedeman: 00:46:11

As always, keep building, keep growing and until next time, keep living and leading.

Josh Friedeman: 00:46:17

Well.