THE Cambridge Connection - Episode 37

Yeah, Crypto 101, right? Terms. Yes. Terms. You got to know the terms.

If you’re going to get involved, it’s important to know some of the pieces that are involved in investing in cryptocurrency. And have a backup plan. And a backup plan. Exactly. So 5% or less is kind of the recommendation as you’re learning.

I want to go over a couple of terms that I think are important, because everybody talks, says Bitcoin, Bitcoin, Bitcoin. It’s actually a cryptocurrency. It’s a form. Correct. Gotcha.

And it was the biggest and the only thing for a little while, it seemed, it kind of got coined. Most popular. Right, the term. So there’s Altcoin. And Altcoin is any coin that’s not Bitcoin.

We’ll keep it as easy as that, because there are a bunch of those and they’re all kind of different ways of buying these types of currencies. So Bitcoin, I’ll give you that one. That’s the first and most valuable cryptocurrency that was launched in January of 2009. And that’s exactly what we were just saying, the most popular verbiage when it comes to cryptocurrency. Be interesting to hear from Dan about Bitcoin, because the problem with Bitcoin is like everything else, that’s the one that got people to become millionaires, if not billionaires, because of the value it started at.

And if you stayed with it, you probably are very wealthy today. It paid off. So now you’ve got hundreds and hundreds and hundreds of these opportunities, and it’s no different than the stock market trying to figure out which one’s going to be that next one that people will make a lot of money on. And now that we’re in uncertain times, it’ll be interesting. It’s a gamble.

It is. Just like investing is, right? You’ve got to do your research, though. That’s the important part. So cold wallet or cold storage is a way of securing your cryptocurrency offline, which is important because we talk about scams in the previous cryptocurrency segments we’ve done.

And being disconnected from the internet gives you great security of having people steal your coins or your tokens or your codes. So that’s important that you have a cold wallet off of the internet. Decentralization. The principle of distributing power away from a central point. Blockchains are traditionally decentralized because they require majority approval from all users to operate and make changes rather than central authority.

And the interesting point that they make that I’ve read up on is that banks, it takes several days for transactions to go through, where with technology, these can go through instantaneously. In seconds. With no middle person. That’s why they’re trying to get the power away from the banking industry with this type of investment. Yeah.

No three business day rule. No. Just, again, it could be immediate. And in most instances, that’s what they’re trying to make happen. Sure.

HODL, which is H-O-D-L, was a alleged mistake for hold. But what it means is hold on for dear life. So when you look on Twitter, there’s a lot of back and forth. HODL. Yeah, HODL, HODL.

Because right now, everybody needs to either HODL or get out or I guess they’re going to decide what to do because things have been all over the place. But that’s an important term. Hot wallet. That’s yours? Hot wallet.

A soft-based cryptocurrency wallet connected to the internet. So while more convenient for quickly accessing your crypto, these wallets, they’re a bit more susceptible to hacking, cybersecurity attacks, and offline wallets. So just as files you store in a cloud may be easily hacked, then those locked safe in your home pretty much. Absolutely. And the hot ones are the ones you can do the quicker transactions with.

The cold ones, there’s a few more steps that you have to do in order to exchange them. But we understand this industry is evolving right in front of our eyes. So it’s important to get experts like Dan on to help us get basic on it, figure out how to get started and what to kind of steer clear from. Education. That’s right.

Industrial education. The last one I’ll do is NFTs, which is a non-fungible token. And those basically are units of value used to represent the ownership of a unique digital item like art or collectibles. Now I’ve seen some of these and the value of what they go for, it blows my mind. And I think a lot of this, the cryptocurrency era has come from people that are gamers, it seems.

So they’re all into this digital representation of everything. And for me, I had a hard time looking at Picasso’s art and saying, that’s worth something. And now we’ve got these digital ones that look like a 1985 Space Invader. Right. To our eyes, they’re nothing.

No, and they’re worth millions of dollars in some cases. So that’s interesting. But I think what we’re going to do now is take a quick break. We got Dan held on the other side so that we can have this conversation. This is Gordon Oliver with The Cambridge Connection.

Guest introduction and Bitcoin origins

We’ll be right back. Spring is here and it’s a great time to clean up your debts with a debt management plan from Cambridge Credit Counseling. Reduce your credit card interest rates and lower your monthly payments. Call Cambridge Credit Counseling today. 1-800-CAMBRIDGE.

Welcome back, everyone. This is The Cambridge Connection. I’m your host, Gordon Oliver, here with my co-pilot, Tina Marie. And it is an honor to introduce our special guest. We have Dan Held, who’s the director of growth marketing at Kraken, which is one of the largest crypto exchanges.

Dan, welcome to The Cambridge Connection. Thanks for having me, y’all. I’m excited. And we’re excited to have you. And before we kind of get into some of the things in the crypto world of things, can you please give our listeners a little background on you and your bio?

Yeah. So my short background, you know, I’ve been in the crypto space almost 10 years. I used to live in San Francisco for most of that time. So crypto I would more broadly refer to as fintech or tech. So I’ve been in crypto almost 10 years, built some of the earliest companies in the space, have sold two startups.

I currently work at Kraken as director of growth marketing. That’s user acquisition. So what does that mean? I acquire. New customers for the platform.

And Kraken is an exchange where you can buy and sell different cryptocurrencies. You can trade futures. You can also trade on margin. So, yeah, that’s what I do in the crypto space. And in parallel, I also write a lot of content about Bitcoin.

Bitcoin specifically because I think Bitcoin has our greatest chance for creating a new monetary system and a new free financial system. So, I write extensively about Bitcoin and that’s how most of the people know me in the spaces, due to me talking about Bitcoin. Yeah. So, the Bitcoin piece of things, right? And again, I guess for our listeners, the decentralized part of this, getting the money away from the bank system.

Can you kind of talk about that a little bit? Yeah. So, I think some background that’s useful here is if we start with why Bitcoin? Because I think a lot of times people describe Bitcoin and they don’t cover why it existed or why Satoshi created it. So, Bitcoin was created by a pseudonymous founder called Satoshi.

Satoshi is someone we don’t know. This person has never been identified, but they created Bitcoin because they had saw the egregious breaches of trust by the government and by banks during the 2008 financial crisis. And while they had been building Bitcoin before then, planted Bitcoin or started Bitcoin right at the peak moment of despair on October 31st, 2008. And that’s a couple of weeks after Lehman collapsed, I believe. Or a couple of weeks before, I forget.

Right. And so, people need to remember that that’s why Bitcoin was created. Bitcoin wasn’t created to be a new PayPal or new Venmo. Bitcoin was created to replace the financial system. And that’s, I think, a really important note here.

0. And that’s important to note because it gives us an idea of, okay, well, why is this valuable for me? Well, Bitcoin is valuable to people for three reasons. One, it’s the monetary policy is fixed and set in stone. And there’s only 21 million Bitcoin that will ever be created.

That’s very much in stark contrast to existing fiat monetary policies, where, as we saw during 2020, money printer Gober was the meme, where governments printed a lot more money. And that’s why we’re feeling inflation now, inflation in asset prices, inflation in gas. A lot of people probably went to go fill up the tank and felt that pain. Well, that’s due to the government printing a lot of money, and that doesn’t happen in Bitcoin. Bitcoin also has two other fantastic properties, one being it’s unseizable.

Now, you might have heard about Bitcoin being seized in a bust or two, like if the FBI raided someone. However, if you store your Bitcoin properly, it is unseizable. It would take every computer on Earth 10,000 years to crack your password. So, these criminals, what they did is they left their password out on the kitchen table for, you know, so when they got raided, it was very easy to seize. But Bitcoin, for all intents and purposes, is unseizable.

And then finally, Bitcoin is immutable. And what does that mean? It can’t be censored. So, I can pay anyone in the world, of any type of person, I can pay them if they’re left-wing, right-wing, whatever wing they may be. And those three properties are what gives Bitcoin its value and what makes Bitcoin compelling for most people.

Getting started with Bitcoin investing

So, all of that said, and that is truly incredible information, I think a lot of the problem comes just like with the stock market. You know, that has been around for so long with a history, and you’ve got financial advisors out there that do a great job, and you’ve got some financial advisors out there that don’t necessarily do a great job. And because this is still relatively new, what advice do you have for a beginner that is just going to start to, let’s say they want to start investing 5% of their income into cryptocurrency in the industry, where does someone start? Because that’s a lot of information you just gave, and it is a lot to know and understand. Yeah, and I totally get it, right?

Like, if you’re hearing this right now, you might be like, okay, Dan, that sounded compelling, that sounded interesting, but I’m still really confused. Like, what is money? And I don’t even understand how the existing monetary policy, you know, like how the current financial system works. Well, you’re not alone. As John Oliver puts it, the really well-known comedian, he says Bitcoin is everything you don’t understand about money with everything you don’t understand about computers.

Yeah, it’s a double whammy, right. So you’re not alone for feeling confused. So this journey of fully understanding Bitcoin versus the existing system will take some time. If you do feel compelled to buy some and then learn, which is actually a really cool way of learning, in fact, I do that with traditional equities, is I’ll buy it just so I start to pay attention to it. And so that’s, I think, a good way to understand Bitcoin is buy a little bit of it.

com. com, the company I work for. S. and the number one biggest exchange in Europe. So we’ve been around 10 years, have a great reputation, and also pretty cheap on fees.

So you log in or you go to the App Store and type in Kraken, and we’re the first result. You install the app or sign up online on your computer, and then you go fund your account. So you’d send in money like $1,000 or $100 via ECH or Wire, and then you go buy Bitcoin. So we guide you through that process once you sign up. Once you have some Bitcoin in your account, I think that’s a good way for you to start checking the price every day and reading news about Bitcoin or understanding why it’s important.

The ultimate goal that you want from this or where you should end up over time, and everyone’s journey is unique and I don’t want to pressure people too much, is eventually you want to withdraw your Bitcoin from Kraken and hold it yourself. It’s really cool that Bitcoin has this property. It’s kind of like gold where you can hold gold in a vault that someone else controls for you, or you can have the same quality vault and store it at home. That way you don’t have to trust Kraken. You don’t have to trust these other exchanges.

All you have to do is just trust yourself. Kind of like the old put-your-money-under-the-mattress type deal? A little bit, yeah. I think you’re directionally right there. Imagine putting your money under the mattress, but under your mattress is Fort Knox.

Yeah, right. Kind of a better way of putting it, but yeah, you’re right. And so that’s a really powerful quality of Bitcoin, but it does take a little bit of technical expertise, and I want to make sure people don’t feel pressured to do that right away. They should learn more about Bitcoin. They should understand it more.

But yeah, I think when you look at portfolio allocation perspective-wise, after you dip your toes into the water just to start to pay attention to it, then I would say portfolio allocation-wise, and I’m not a financial advisor you should talk to a professional about this, but what’s the harm in losing 1% of your portfolio? If you put in 1% and it’s lost, I’m pretty sure you’re not going to lose any sleep over it. If it 10Xs, which means it multiplies by 10 essentially, Bitcoin moves in very volatile ways. So Bitcoin in this last cycle went from $3,800 to $68,000. So in those moments, Bitcoin could move from 1% of your portfolio to 10% or 20%.

I think that would be very meaningful and very exciting for people. If it goes to zero, which I don’t think it will, but let’s say it does, you only lose 1% of your portfolio. Like I said, I don’t think most people will lose sleep over that. If I’m not mistaken, when you become a customer of Kraken, there are also educational resources available on the site as well, aren’t there? Absolutely.

The Cracken Learn Center is a great place to go if you want to learn about a wide variety of cryptocurrencies. com. On there, I would start with the series, Planting Bitcoin, why was Bitcoin created, what is money. It covers a lot of the basics because I think a lot of people jump in, and I remember when I first started in the crypto space, in 2012, there weren’t any YouTube videos, there weren’t any great articles about it, and so people would send you very technical documentation on how Bitcoin worked, and I was like, well, I don’t care how the technicals work. I’m not an engineer.

Tell me why it’s important. Tell me how it was created, and tell me what money is and the basics of that. So Planting Bitcoin, I think, is a great place to start. Yeah, Cracken has great resources if you want to learn all about the different crypto assets, but definitely recommend you understand and really respect Bitcoin first. Not that Bitcoin is just a first mover or something like that, but Bitcoin makes certain design trade-offs that if you understand why those were made, you’ll understand why other cryptocurrencies have made different trade-offs, and I think that’s very critically important to understand the space.

Awesome. Yeah, so this is a great conversation, great information. What we’re going to do right now is take a quick break, and then when we get back, I think it would be great to talk about the future of Bitcoin based on all the knowledge that you’ve had over time, and then we’ll go over some quotes, because there’s a lot of news out there that kind of, there are advocates, there are people that just don’t believe in Bitcoin or cryptocurrency at all. So we’ll get into that, and then you’ll let us know where we can find you, and this has, again, been a great conversation, so important for our listeners. So we’re going to take a short break.

Show announcements and podcast reminders

This is Gordon Oliver with The Cambridge Connection. We’ll be right back. Well, Tina Marie, here we are, already in our mid-30s. Have you checked your license lately? You’re a far cry from being in your mid-30s.

No, no, not me. Our show, The Cambridge Connection. We’re already more than halfway through our first year of great guests and need-to-know topics. Oh, I thought you were talking about your age. Well, that would take a lot longer than we have in this message, but what only takes a moment to share is that if you miss any of our shows on Saturdays on WHMP, don’t worry.

com, click on Podcasts, and all of our shows are listed there. Plus, listeners can find us on all the podcast sites where they listen to their favorite podcast. Well, when I get home, I’m going to listen to my favorite episode. And what’s that? You know, the one with me in it.

Following multiple perspectives and future outlook

Welcome back, everyone. This is The Cambridge Connection. I’m your host, Gordon Oliver, here with co-pilot, Tina Marie, and our friend, Dan Held, who is the Director of Growth Marketing at Kraken, which is one of the largest crypto exchanges. Dan has an incredible newsletter as well that we’ll obviously repeat. But more importantly for our listeners, Dan on Twitter has about 569,000 followers that actually watch his advice and commenting.

And again, Dan made it clear, we’re not giving financial advice and neither does he. It’s information based on the history of knowledge that, Dan, that you’ve built up over time. So that’s a pretty incredible portfolio of people that are following you and the information that you’re giving. And congratulations on that success. And he’s verified.

And verified. Yes. That’s huge. Yeah. I mean, Jack Dorsey follows me on Twitter.

That’s awesome. Yeah. That’s awesome. Impressive. Look, it’s been a wild journey.

And I think there’s a lot of brilliant voices in the space. So there’s a lot of people that I’d recommend, if you start to dip your toes onto Twitter or LinkedIn, follow a bunch of us so you get different perspectives. I’ve got my own and 690-ish thousand people or 590-ish thousand people like that perspective, but some don’t. So I definitely recommend you get a multitude of opinions before you go all the way down the rabbit hole of mine. Yeah.

I mean, the way I think about it is that people need to hear about Bitcoin everywhere. And so my background is in marketing. And when I started to talk about Bitcoin, I applied the same principles I use in a professional setting to help get my articles that I wrote and my thoughts about Bitcoin out there. And so when you look at my audience, most of them are on Twitter, but I also have 60,000 LinkedIn followers. I have 30,000 newsletter subscribers and I’ve got 33,000 YouTube subscribers.

So by the message of Bitcoin, I’m trying to get to as many people as possible across different social channels. Yeah. And I’d like to give a special thanks to Ben Noble, the NFTs, who was on our show for a couple of segments and he basically introduced us to you and your great wealth of knowledge in this. So a special thanks to him as well. And this is your point, right?

Try to follow some more people to get all perspectives while you’re building your own knowledge base. Exactly. I’ve got my own opinion, but others have different ones. And so you should definitely take all of ours into consideration when coming up with your own. To have the history of information that you have, you know a lot of people rely on the news for some reason.

They rely on the news to kind of get their information and there are many naysayers about Bitcoin and about cryptocurrency. And what would you say to them about the future of the cryptocurrency and Bitcoin industry? What would you say about it? Yeah. We’re still very new.

There’s a phrase in tech called TAM, total addressable market. So like, what’s the market size for Bitcoin? What’s the market size for Twitter? What’s the market size for Apple? And when we look at Bitcoin, I mean, Bitcoin is worth less than like Apple and some of these big tech corporations.

Well, let’s look at how much other types of money are worth because Bitcoin is money. You know, if we look at gold, there’s $13 trillion worth of gold in the world. If we look at fiat currency, there’s $60 trillion. If we look at other assets, you know, this is a little bit of an extrapolation, but most people consider their home their largest store of value asset. The home doesn’t purely just function as a home, it functions as an investment.

And that’s a $250 trillion market. So when we look at Bitcoin’s TAM, Bitcoin’s TAM is definitely in the trillions, right? And Bitcoin right now, its market capitalization or its total valuation is only around $500 billion. So based on that, I think Bitcoin is very undervalued relative to gold, relative to fiat money and relative to a wide swath of other store of value assets. You know, if you think about like your home, for example, you don’t really own your home.

Your government owns your home and gives you the right to live in it and own it. But they could take that away in a snap of a finger. Absolutely. Or, yeah, same with like stocks and bonds and everything else. With Bitcoin, you don’t have to rely on a government enforcing your property rights.

And that’s what’s so valuable about it, is that Bitcoin gives you the best property rights that only gold, I think, is paralleled with what other property rights are granted upon you if you hold that asset yourself. So yeah, I think Bitcoin has a lot of potential left. 0 and it’s starting to become that. But it has not become that yet. So for me, I’m still hodling.

Have you guys heard of the term hodl? Yes. Yes. Well, well pronounced, Dan. Right.

We pronounced it a little incorrectly earlier. We would do definitions earlier. Yes. And I thank you for clearing that up for us. Absolutely.

Well, I think it’s a little bit potato, potato. Right. Pretty much. Hoddle, hoddle. Either way, we’re holding on for dear life.

Right, Dan? Either way. Either way. And that’s where the term comes from, because Bitcoin going from zero dollars to becoming a digital gold wasn’t going to be a nice smooth sailing ride. It’s definitely a rocky ride, and so that term exists because, yeah, we’ve got a lot of volatility ahead of us, and that’s where if you want to hold Bitcoin, I think start with a little bit, start to understand it, and once you understand it, I think it’ll sink in that this is a great long-term investment.

Reacting to cryptocurrency skeptics quotes

Managing a massive system. Want to read a couple quotes to you and get your reaction. Sounds good. I know you’ll love this one. It’s a fraud and worse than tulip bulbs, referencing cryptocurrency Jamie Dimon, CEO of JP Morgan.

Yeah, well, he said that, I think, about five years ago, and then now his company is allowing trading of crypto. So I couldn’t imagine anything more hypocritical. Yeah, it was 2017, actually, when he said that. Yeah, and again, it’s great to look back on history, especially when you’ve been involved in that ride, right? Absolutely.

Tina, what do you got? Okay, I’ve got one from the legendary Warren Buffett. Stay away from it. It’s a mirage, basically. In case of cryptocurrencies generally, I can say almost with certainty that they will come to a bad ending.

What do you think of that one? Yeah, well, I do find it funny how she pushes diabetes via McDonald’s and Coca-Cola. Actually, I should be crying, not laughing, but yes. That he’s suddenly worried about someone in the free market wanting to store value in a digital currency, which is a free market activity that no one forced him to do, I find very, very strange. And then also, for the listeners who are here, to let you know, Warren Buffett actually missed out on almost all of tech growth.

He did invest in Apple, but very late stage. Warren Buffett would be multitudes more wealthy if he hadn’t invested in tech, and instead he ignored the entire sector for most of its existence. So Warren Buffett doesn’t really understand how to turn on a cell phone, much less understand tech. So I don’t really fault him. He’s pretty ancient.

I mean, again, he can barely turn on a cell phone, right? Shots fired. Yeah, I love it. It’s starting to remind me of the old dog, new tricks phrase, right? Oh.

Hey, I didn’t fire the first shot. He came at us. You got it. And you should. Again, you’re representing an industry at this point, so it’s important to get all perspectives.

Closing remarks and where to find guest

So listen, Dan, before we let you go, can you please, one more time, tell our listeners where they can find you, where they can find the newsletter, etc.? Yeah. com. That’s where you can go read a different blog post and kind of learn a little bit more about me. There’s subscribe links there for my newsletter.

And then follow me on social. , you’ll go find my accounts. And if you like to hang out there, then you’ll be able to read more. And that’s where I post content most frequently. I cannot thank you enough, Tina Marie.

Amazing conversation today for our listeners. This is an important place for people to start educating themselves and start paying attention. And we completely value your time today and are so thankful that you joined us. So thanks so much for joining The Cambridge Connection. Thank you, Dan.

Thank you. Appreciate you all having me. I had a blast. And hopefully the listeners, hopefully this was, you know, if you haven’t heard about Bitcoin before, this was a good first intro. And yeah, thanks again for having me.

Cheers. Cheers to you, man. Have a great day. Tina Marie, Tina Marie, these shows go by so fast. I know.

I had so many more questions, but it’s very enlightening with Dan today. We’ll get more. We’ll get more on this show to enlighten our listeners. So I’m going to close the show with a quote, as always, an investment in knowledge pays the best interest. Benjamin Franklin, got to listen to our founders every once in a while, right?

Perfect for this show, too. Right. Huge thank you to our producers, Leah and Lisa. As you can see, have great experts on this show and on the horizon. m.

com, click on podcasts or find us where you listen to your favorite podcast shows. Once again, we want you to be part of the conversation. org or feel free to call 1-800-CAMBRIDGE.