Latest / Money Grows on Trees / #259 - Can Bitcoin Really Survive The Recession?

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#259 - Can Bitcoin Really Survive The Recession? · Money Grows on Trees

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So if Bitcoin was adopted as a currency and coffee was being
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sold and you have these massive swings in the price of Bitcoin, then
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one day your coffee is 0.001 sats and the next day it's like quadruple
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that. You're like, what? I've got to put a Ford or a future contract on my tomorrow
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coffee. And that's where it fails as a currency. If you have a choice between
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buying an egg that goes up in value over time or the choice is
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to buy a goose that lays bitcoins, which
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one would you prefer? The egg or the goose? History shows us
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that businesses are the best way to generate long-term wealth. I'm
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certainly more inclined to buy a property, way more inclined to buy
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a property than I am to ever, ever, ever buy bitcoin because it's very difficult
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to see how productive it's going to be in the future. It's not going to be productive at all. And I'm all for
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it. Wait. I'm Lloyd James Ross, seven-figure investor
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and entrepreneur, and I've helped thousands of business owners and professionals turn
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financial stress into success. If you're stuck in old money
0:52
habits, overwhelmed by investing, or unsure where to start, this
0:56
is for you. I'll give you the mindset and strategies to take control,
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grow your wealth, and achieve financial freedom. It's time to
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make your money work for you. Should you turn to Bitcoin during
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uncertainty? Well, that's exactly what people are doing because the price of Bitcoin is
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going through the roof. The price of Bitcoin, not the value of Bitcoin. The
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price of Bitcoin is going through the roof. Price is what you pay,
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value is what you get. And so someone's asked me, or many people
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asked me in the comments over the last few weeks, what about Bitcoin? Give
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us your take on Bitcoin. If you've been following me for long enough, I really don't have
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one because it's not an area that I I spend any
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money on, I don't spend much time on it but because I'm in the financial education space,
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I owe it to people that follow me to give a position on it because
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I think it's important because it is drawing a lot of people in for various
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reasons, good, bad or indifferent and I know a lot of people that are
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effectively Lost money doing it, lost fiat doing
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it. They're wanting to know is it stable, what they do.
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And so I just thought I'd give a bit of a pros and a cons approach to BTC. And
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before you tell me to go do my research, I've read the Bitcoin
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standard in summary, and it absolutely,
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it aligned with exactly what I already thought. So
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it hasn't changed my position. And so please don't
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tell me to go do my research. I've done enough that
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I know that, I didn't need to do too much,
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because I already know it's being priced off the dollar, the very thing it's going to replace. And
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it's a volatile asset, so it can't be used as a currency. But I
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also know that the reason why it's been so popular is because of the fall
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of fiat currency. And so there's a bit of a cross-pollination of stories happening. But
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also, it's very similar to gold, and gold is a non-productive asset
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as well. It doesn't produce anything more. So it could be a store of
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value. Without a doubt, it could be. It's proven to be a
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store of value. Certainly better than putting your money under the mattress.
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But again, you have to deal with the volatility. And there's some other cons that
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we'll talk about. Certainly some pros to it compared to fiat. But how
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it will change how I build wealth, it won't. It really won't. I
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mean, I find it fascinating and interesting, and somewhat amusing for
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that matter, that some of my friends who go on all about it,
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like, ah, Bitcoin, you've got to get into it. I ask them, how did you make your money?
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Oh, business? Right. So it's
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the same as how a lot of people got wealthy with property. They didn't buy a property and get wealthy. They
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tended to build a business around property and then buy the property with the cash
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they made from their business. So just be careful when people say Bitcoin. Ask
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them how they made their millions first, right? And
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so I don't look at it as a place to put my
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funds because I invest in businesses, be it
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private small businesses, build my own businesses, or I buy shares, or
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an index fund which is a group of businesses. Because history shows
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us that businesses are the best way to generate long-term
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wealth, certainly in the markets. In Australia, we tend to have a
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religion around property, also a fine asset at the right time, does
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the same thing, grows in value, produces income, it's a productive asset. So I'm
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certainly more inclined to buy a property, way more inclined
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to buy a property than I am to ever, ever, ever buy Bitcoin or
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gold for that matter. It's because it's very difficult to see
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how productive it's going to be in the future. It's not going to be productive at all. And to see where
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it's going to go. Like, yes, it's had a 44% rise, but where will it
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go in the future? And it seems to be boiling down
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to fiat currency inflation.
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So let's go through the pros and the cons. And we'll start with the
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pros. why people are drawn to it. So let's
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look at it to start with. Firstly, there's limited supply.
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So with fiat currency, you can print it into infinite, which is terrible.
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Fiat currencies are terrible. Fiat currencies are terrible. I
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repeat, they are terrible, especially when they're not attached to like
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a gold standard. They're not attached to anything. You can print them, infinitesimally. It's
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not good. So I'm not a fan of fiat currency. I
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don't believe in fiat either. I hate it. I hate all
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currencies, seemingly. And so that's why I
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don't invest in currency. I don't invest in fiat currency.
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I invest in businesses. And at the worst case, I'd
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buy real estate because they are productive assets. They
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produce income and grow in value. But what's the
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pro with Bitcoin? Why are people drawn to Bitcoin? is
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a limited supply. If you have a limited supply, you
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can't just print it into oblivion, right?
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So there's 21 million Bitcoin caps, right? And
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this protects against things like inflation, right? So with inflation, the
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currency inflates or the price of things goes up, whereas with
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something like if If, and I don't mind if it is
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adopted, I care. I don't care if we have seashells, toilet paper, gold.
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I don't care if we use Bitcoin. I couldn't care less what the currency is. I
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don't care. What would be great about it if it was adopted as
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a currency is the fact that it doesn't inflate itself. In
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fact, it would cause deflation in prices because the economy
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would become more efficient, things would get cheaper, right? So it's the opposite of
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inflation effectively. It's a bit of deflation. Totally fine. And that
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happens because it in itself is capped. And
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so you've seen that happen in gold. Like in 1965, one ounce of
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gold was $20 an ounce in 1965. So what's that? 40, 60 years ago,
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$20 an ounce. Now it's $3,330 an ounce for gold. And
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so you see that in 60 years, gold hasn't
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done anything. It's the fiat currency it's measured against that
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has devalued. And people are betting their
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house, just about, on the devaluation of the currency.
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I think it's better to have a house than bet a house on something else, like a currency or
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gold, to fight inflation. I really do. But
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if you look at, since 1965, I did this thing the other day on my stories. Berkshire
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Hathaway A-class share in 1965 was $15. Gold was $20. Wind
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the clock forward to now, 60 years later, gold is $3,330 an
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ounce, and a Berkshire Hathaway A-class share is $717,000 per share. So what would
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you rather, $20 into $3,500 or $15 into $717,000? This
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is what I'm talking about. Businesses perform better. I know that the
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Berkshire Hathaway returns have been 5.5 million percent astronomical.
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But even the S&P 500 has produced
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far superior returns than gold. And so you can't
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just rely on the devaluing of a currency to produce Effective
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gains in the future because at some point like inflation if it really
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is two three four five percent It's just still not enough right so I think there's speculative
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moves in the space of crypto Well beyond
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inflation so you can't just rest your laurels on the fact that the currency going to do value so
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the first pro for Bitcoin would be its limited supply.
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So one Bitcoin is 100 million satoshis, a
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sat, a sat. So for example, 100 million sats.
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So if we go and take one Bitcoin and it was adopted as a currency, we
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have 100 million sats per Bitcoin. And if you're gonna go and buy a cup of coffee, if
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you looked at the fiat currency value of coffee today and the
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value of Bitcoin today, we've got a coffee at 0.001 sats.
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Now the challenge with that is, You only know
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the value of that coffee today because it's priced in fiat More on that later.
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So one limited supply two is decentralized supposedly
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Looks to me like the United States is trying to centralize it as much as they can But
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it's not controlled by any government or central bank, which is why it's attractive
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to certain countries like El Salvador where they've
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adopted that as their core currency because it is not controlled
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by any specific central bank and it can be adopted by countries all over the world. And a lot of
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people are finding it easier to deal in that particular thing than their current currency.
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If you look at something like Zimbabwe that's inflated their currency way, Bitcoin's
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a far better alternative than that, for sure. And I
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think it does work well as a currency in those circumstances. And
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by all accounts, too, I think it would work fine as a currency.
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The only issue with it is the volatility part. And that
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kind of destroys its chances of probably ever being adopted as a
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currency. So it's just a fun paradox you see between people that
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own crypto. They want it to pump in price and go
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up by 100%. But at the same time, they want it to be adopted as a currency. You
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can't have them in both. It's either a speculative store of value asset, like
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gold, or it's a full-blown currency, in which case it
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can't oscillate that much in value. The goods around it may shift,
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like what commodities do. For example, commodity prices
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can change, like coffee, wheat, wool, cotton, etc. They
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can all change in price based on supply, supply
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and demand at least. When that happens, you have
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to create forward and futures contracts with
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the suppliers of it to lock in a price because they oscillate so
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much. So if Bitcoin was adopted as a currency and coffee
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was being sold and you have these massive swings in the value or
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price of Bitcoin, then one day your
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coffee is 0.001 sats and the next day it's
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like, Quadruple that you're like what I've
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got to put a Ford or a future contract on my tomorrow coffee And
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that's where it fails as a currency, right? So whilst it's decentralized and
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has adopted well into those Countries that have very high
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inflation rates. I think it works fairly well there as a currency but
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I certainly if it is a currency then it can't be a speculative store value asset
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for you and just Pump as they say, right? That's where it's good. It's good to
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be tricky. So Second pro, global and borderless, so you
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can access it from anywhere, right? You can literally access it from
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anywhere. And so I think it's been super effective for
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people who are wanting to access money in
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multiple countries, wanting to buy certain
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things that can't be tracked, certainly, or tracked less effectively by
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governments. And so yeah, it's borderless and global which
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obviously is as many reasons why that's a good thing, right? Price
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history. There is now some form of price history like
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gold has a better For a hedging inflation. I
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think gold is superior because it's got thousands of years as
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Thousands of years of price history So it gives you a lot more confidence thinking,
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well, it's been around for the last 3,000 years, probably going to be around for the next 3,000 years.
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So there's a lot of that price history that's available. Bitcoin
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has a far less, you know, its history is probably really
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in the mainstream, probably been since 2000. Well, we call it
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2010 anyway, so 10, 20, 15 years. It's not that long, so
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it doesn't have the longest price history. Had massive growth
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in that time, too, so it's also very volatile. So I think the price history could
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also be not just a pro, but also a con, because it's not
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that long compared to gold, and it's also very
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volatile. So I'd say that's a pro and a con, right, the price
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history of that. Now, the other one, as
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a pro, seems to be a better store of value
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than putting your money under the mattress. And I
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would agree with that wholeheartedly, that 5% and 10% inflation
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rate on our fair currency is so stupid, and you wouldn't put
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your money under the mattress. By all accounts, as a store of value, it
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seems to be more effective. But again, because of
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the volatility, it can't be a store of value in a currency. It
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seems to be exclusively really
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good at one and exclusively really good at the other, but
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not mutually exclusively, like together, it looks terrible. And
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that's the problem with it, I think. And if you're reading through
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the Bitcoin standard, the objective is to adopt Bitcoin
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as the standard currency. And it doesn't
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seem to want to do that if it's a store of value. So whilst I say it's
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a pro, digital gold feels like a store of value, fights
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inflation, definitely a pro. The con is it
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it's unlikely to be adopted as a currency if it's still volatile. And
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you're probably hearing me say this again and again in this episode, like, Lloyd, you've said that,
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but I'm just wanting to, it's difficult to wrestle with because
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it wants to be one thing and it wants to be the other, and it
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seemingly can't be either. Because, one, it's priced
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off a fiat currency it's supposed to replace. So if all of a sudden, as an
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example, fiat currency disappeared, how much is your Bitcoin
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worth? And someone will say, $117,000. I'm like, well, how do
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you know that? Because fiat currency's gone. They say, well, it's worth one
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house. I'm like, okay, sure, that's fine. In which
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case, it's worth X amount of Satoshis. Great, that all works. That's
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a currency then. And that seems to work effectively. But
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once it forms into a currency, it doesn't pump
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beyond probably the price and efficiency growth
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of businesses, the real value accretion return of businesses, and
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real estate. So that's where the issue lies. You're just not going to
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have these massive pumps like you see now. So as it moves to one or the other,
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it starts to lose a piece of its former self with what people want
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it for, which is, in my eyes, it seems to be people
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want it for creating massive fiat wealth. Interestingly, right
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great paradox. Okay. They're the pros I know I gave him a bit of a con pro for
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the pros, but there's best I can do for the pros because I still think it's so Difficult
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to prove without a shadow of a doubt that the pros are there for a long term,
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but we'll see Now the cons getting
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back into that massive volatility There was a time in
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God, when was it? 2021 it might have been off the top of my head Was
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it 2023? It dropped from like 69,000 to 70,000. It
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dropped 75% in a year. So if
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you have this massive 75% fall in the value of the
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currency, your coffee is going to be 75% more
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expensive or less expensive throughout the year. Now, when you're
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in business and you have to buy goods, Let's say I'm in
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the business of I sell big pens, and
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I'm going to buy all these big pens and then resell them to Woolworths and wholesale. Well,
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if I buy the big pens for a dollar, well, not even a dollar, one Satoshi, and
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the pens Let's
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go back. If it's adopted as a store of value, see how
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confusing it is, and Bitcoin is
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bought in Bitcoins, and then the following year it's shifted, I've got to
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then sell my pens that I bought at X price for
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X minus 75% of the value price. and my business goes broke
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overnight. There is no price. Again, this
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happens in commodity markets and how they get around that is they
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sign futures and they sign forward
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contracts with the suppliers to make sure
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that when they sell it at that price, it's locked in for the delivery.
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They don't lose money when they're in the
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sales process to the end user. And
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there's a whole futures market on that, so you can buy and sell
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and swap futures and forward contracts in the commodities market. So that's how they've got around it.
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Now, having to do that with every single thing you buy in
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your business, every month or every year, you'd
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have to have futures and forward contracts on everything. Paper cups
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in your coffee shop, the machine, the
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staff, it'd be a nightmare. You get one staff coming and go, Well, you're
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going to pay me this much in crypto this week, and then next week it's 75% less.
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It's like, what? How can staff even get paid in oscillations of
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75%? But they'd go insane. So you see that the volatility that's
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getting the excitement is the very thing that kills it as a currency. Does
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that make sense? Just quickly, if you're ready to take control of your finances but feel
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16:59
you. Now back to the episode. No yield, no cash flow. So
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obviously I've said this before, it doesn't produce any cash flow. And I've often thought
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this akin to if you have a choice between buying an
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egg that goes up in value over time or even stores value for
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that matter, like gold, one ounce is still one ounce, right? But
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the price has gone up because of the fiat decline. Your choice is
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to buy a block of gold or a golden egg or a Bitcoin, or
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the choice is to buy a goose that lays Bitcoins
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or lays gold Which one would you prefer? The
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egg or the goose? So
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here's an example for you. We have a laundromat business and
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without the foreign exchange part included, we
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bought that for 2.65 Bitcoin, okay? We
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didn't use Bitcoin but that's the current price of Bitcoin versus what would cost
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in Bitcoin. It cost us 2.6 Bitcoin. and
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it produces one Bitcoin a year. Now,
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I could have taken that money out and instead of buying the laundromat,
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we could have bought 2.16 Bitcoin. But
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in a space of a year, we've created a whole another Bitcoin. Okay, and
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what's interesting about that is that even if the price of Bitcoin, we're still
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producing them. Boom, boom, boom, boom, right? So if the currency was
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adopted that we do BTCs or Satoshis, SATs, and
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we bought the laundromat for XY SATs, it'd still produce SATs and grow in SATs.
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And it's just so much better to have a
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goose that lays eggs and rises in value than just having the
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egg. Does that make sense? No yield, no cash
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flow means you can only get one return format. It's just the supply and
18:41
demand or the demand for it that's rising in price and it's just not enough. You
18:45
have to have cash flow if you want any financial independence because
18:49
the cash flow ultimately replaces your wage. Whereas
18:53
if you're just depending on the capital growth of the egg, You
18:57
don't know, you have to sell a piece of the egg to
19:00
realize any cash flow to have any financial independence outside your job. So it's
19:03
not a good vehicle for financial
19:07
independence. The next one is regulatory risks.
19:11
So when Bitcoin first
19:14
came out, it was like, no capital gains tax, which is cool, right? I
19:17
mean, that'd be so much more popular as no capital gains tax. Now all of a sudden, capital gains
19:21
tax. And there's now
19:24
tracking of Bitcoin. They can get into wallets and
19:28
they can track it. It
19:31
has less freedom now because the government's onto it, right? So regulatory
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risks is a con because once the government
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gets their hands on something, it wrecks it, right? So regulation, I
19:42
think, is just going to get more and more and more the more it's widely adopted. And of
19:45
course, if it becomes a reserve currency, like the Bitcoin standard suggests, then
19:48
there will be a ton of regulation around it. And
19:52
although they shouldn't be able to do too much because it is
19:56
decentralized for that matter, no one controls it, but
19:59
you know, with governments, they're very clever at, if they lose a level of
20:02
control, they're very clever at exerting laws over things to disappear things.
20:06
So there's always that risk. If
20:10
you trust governments, then you haven't lived
20:13
long enough. All right. Emotional trading and FOMO hype.
20:16
So the challenge that people face if it's a store of
20:20
value Then you're going to get seduced into
20:23
big pumps, and you're going to buy at the top of the market. It's going to dump down. You're
20:26
going to freak out. You're going to sell at the bottom, and you're going to lose fair currency. And that's mainly what's
20:30
been happening to these poor people that are trying. And by all accounts, too,
20:33
I don't blame people for kind of trying to moonshot crypto, because at
20:36
the end of the day, what are governments giving anyone hope for? Because they've inflated the currency. They've
20:40
made housing impossibly difficult for young people. They've
20:44
really, oh, and I'd even hate to
20:47
say it, There's a generation that's done that
20:51
because of the absolute greed that's happened in
20:55
the housing market even. I don't blame young people for trying to moonshot their
20:58
way around getting in the market either. It makes
21:02
sense. It's a very tricky field to be in, to
21:05
be trading. When you buy something and you watch it
21:09
fall 50, 60, 70 percent, The same can happen in stocks, which
21:12
is why investing in individual stocks especially is
21:15
not for the faint of heart, because you have to understand the difference between price and value. Whereas
21:21
with businesses, for example, in the stock market, if a
21:24
business is like, let's say for example, we're
21:27
looking at Google as a business. Well, I know that
21:31
if Google produces X amount of cash flow or revenue or income, then
21:35
I know if I'm buying that for about 20 times annual income, it's
21:38
fairly reasonably priced because I know that I'm going to buy it for this and 20-year
21:42
payback period. I'd like a 10-year payback period but Google
21:45
is a really good company, I'll do a 20-year payback period. But when
21:49
you don't have any earnings or income to price it off, You
21:53
don't know when you're getting your money back. So if I buy a Bitcoin today and I'm
21:56
like, wait, it's $117,000 US dollars for one Bitcoin. Cool.
22:00
When will I get my $117 back in my pocket? No
22:05
one knows. So you can't with any level
22:10
of science or
22:14
any metric for that matter, figure out how much it's actually worth.
22:18
Because to value cash flows, you take all the cash flows that
22:21
are going to come into the future and you discount them back by
22:25
an interest rate that you're prepared to have and it tells you the current value of
22:28
a business today, right? It's like if you want to buy a coffee shop, I
22:32
say to people, hey, is that coffee shop over there? How much do you reckon it's worth?
22:35
They go, well, it depends on how much it's making. And you
22:38
ask this question of any person who's not financially like even that literate and
22:41
like, hey, how much to buy that coffee shop for? Instantly, they'll go, it depends on how
22:45
much it makes. Because if it made
22:49
$4 a year, they would probably pay $20 for it,
22:54
right? So I'll use more reasonable figures. If
22:57
that coffee shop produced $100,000 a year in income for them, I
23:01
say to them, how much would you buy it for? And they say, $300,000. I'm like,
23:06
cool, how did you arrive at that number? They say, well, if
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I'm laying out $300,000, I know that in the next few years, I'll at least get my
23:12
investment back. I was like, correct. And they say,
23:16
and it might grow in value a bit. So yeah, that's right. Now I said to them, what would happen
23:19
if it was producing $100,000 a year and I had it for sale for
23:22
a billion dollars? I said, what? I would never buy
23:26
that. I said, why? They go, because it would take
23:29
me so many years, decades and decades to get back my
23:32
initial investment in the cash flow. I said, yes. So I say, what
23:36
you're saying is when you buy a business, you're buying the propensity and certainty
23:39
and expectation of your investment being paid back to you from the income
23:42
from the customer, yes? Yes, it's a great that's how you assess whether
23:46
you're buying getting a good deal buying a business or a shit deal buying
23:49
a business And that is how you also buy stocks in companies.
23:52
It's no difference because they're big just big businesses effectively And
23:56
so you can't do the same thing with gold and you can't do the same with Bitcoin because
24:00
there are no cash flows So you don't know if you buy it for a hundred seventeen thousand
24:03
dollars. You don't know if you're getting a deal. I Oh, it's worth this.
24:07
How do you know? Well, there's this many coins and this is
24:10
how much fiat. How do you know? This is so uncertain. It goes
24:13
in the too hard basket. And when you come across
24:16
someone who is really all pro Bitcoin, my
24:20
question to them with their Conviction
24:24
is, do you have your entire net worth in it? The answer is no way.
24:28
And so if you can't put your entire net worth in it, is it worthwhile playing
24:31
in that space? And some people have put a little bit of their net worth in it to
24:35
have one foot in one camp, one foot in the other, because they don't want to miss out, because it seems like
24:38
a FOMO is driving this. We're still on number four, by the way. FOMO drives
24:42
this behavior. They can't stand to miss out, so they need a little bit. And
24:45
I even had a guy reach out to me on Instagram and say, hey, man, now it's up to
24:49
$117,000 per Bitcoin. Have your position changed? I'm like, no. The
24:53
price of something is irrelevant. Everybody knows
24:56
the price of everything and the value of nothing. It has
24:59
no value to me. Does that make sense? It
25:03
has no value to me. None. Again,
25:06
and I'm all for it, wait, being fully adopted
25:10
as a currency. All for it. Hope it happens. Would
25:14
love to make satoshis out of my laundromat. Would
25:18
love to create Satoshis out of my education. Would love to create Satoshis out
25:22
of, I don't care. Whatever one you want to adopt, I'll take
25:25
it. As long as everyone else is using it and I can buy more businesses
25:28
with my Satoshis, I'm all for it. Okay, but
25:31
it's one or the other, right? You can't have both. You can't have your cake and eat it too. And
25:36
people say, oh, but the deflationary, but. If you deflated everything,
25:39
that means there'd be no value in starting businesses, which means businesses wouldn't exist, which
25:43
means no businesses, no economy. All right, five,
25:46
extreme dependency on infrastructure. That's true. You do need internet, you
25:49
need a stable device, you need a private access key, you need security, you
25:54
need power and energy to facilitate the mining.
25:58
It is highly dependent on infrastructure. infrastructure,
26:04
whereas gold as a store of value is not dependent on infrastructure. And
26:08
it's quite interesting, too, because if you look at what the reserve currencies
26:12
or the store of value is, the global world reserve currency, whilst
26:16
people say it's the United States dollar, the USD is a global trade
26:20
currency. So 60% of world trade is done in USD.
26:25
So it's the leading global transaction currency.
26:30
But the global world reserve currency seems to be gold,
26:34
because China is buying up endless amounts
26:37
of gold. And even gold. So I would say that
26:41
if there's a world reserve currency, it would be gold. And
26:44
if there's a world reserve trading or commercial
26:49
trading currency, it would be the USD. Where
26:54
does BTC fit in there? It would largely
26:58
probably either be the store of value, online store of
27:01
value, so all the infrastructure behind it, or it's fully adopted and
27:04
implemented into the world, and it forms the
27:07
currency. So it's either this one or it's that one, all right? But
27:11
it seems to be the behavior of the world is suggesting that
27:14
gold is a world reserve currency and that fiat currency
27:18
is just transactional for now. But of course, again, I'm all for BTC
27:21
becoming transactional currency. Couldn't care less, because I will still buy the goose. I'll
27:25
still buy businesses. I'll still buy a public company. I would still, by and
27:28
large, buy if the right price, the right reasons, I
27:32
would also buy real estate. Because if I buy a piece of real estate, and
27:36
I can lease it out to someone, they can pay me satoshis. I
27:40
can take my satoshis and go buy shit. The
27:44
vehicle and the asset is just so much better when you're getting income and
27:48
value accretion. It just doesn't work when you're buying the egg. It's
27:51
just so lame. The example I used earlier about the
27:55
Berkshire Hathaway egg class share versus gold would just be a
27:58
great example of why. It's not really decentralized. Number
28:01
six, not really decentralized because government's got their hands all over it. Let's hope they don't
28:04
wreck things when they touch things they tend to. Number
28:08
seven is not proven economic collapse. And what I mean by that is we
28:11
haven't really had, well, we haven't had a economic
28:14
panic while Bitcoin's been around. So it hasn't ever experienced
28:18
a true economic collapse. which would be very fascinating
28:22
to see how it reacted and what would happen. Because Michael Saylor says,
28:26
whatever you do, if you need to sell your kidney, sell
28:29
your kidney, but just don't sell the Bitcoin. And so when
28:32
there's a panic and people need to put their hands on money to go to the grocery, like if I
28:35
went to the grocery store right now to buy groceries, I
28:40
and I should do a little skit on this actually and I said hey cool. I've got
28:44
these groceries I'd like to eat. Do you take Bitcoin? No, sorry.
28:48
Oh shivers. Okay To my property manager.
28:51
Hey, I'm gonna pay the rent this this week in Bitcoin. Is that alright? No
28:56
So in a panic when people need the trade currency of
28:59
the day Australian dollars or US dollars They
29:03
would sell their Bitcoin to eat,
29:07
to pay rent, to get to the needs, the shelter, rent, and water
29:11
is not necessarily that needed because you can go to the park and drink, but food
29:15
and shelter, they will definitely sell their Bitcoin to
29:19
interfere, to trade into those commodities. They will. So
29:23
if you look at the panic, we haven't experienced that
29:26
yet. So let's see what happens. It could go the other way. I'm not sure because I
29:29
haven't seen it through, but it hasn't experienced it yet. So you've got to watch. Would
29:32
you want to buy assets that haven't really proven every season, right? So
29:36
does that make sense? Again,
29:40
I'm just trying to look at both sides of
29:43
it so you don't think I'm just here to slam it. But having understood what
29:47
the objective of the Bitcoin standard is, what it's being used for
29:50
now, what it could possibly be adopted to for currency in the future, clearly
29:54
shows me that it would not change how I approach wealth building,
29:58
which is to buy and build productive businesses and
30:01
buy with cash, whatever it
30:04
might be of the day, seashells, toilet paper, buy productive assets
30:08
like the goose. It just would not change. It just wouldn't.
30:12
And I don't think the people that have money right now would also
30:16
change how they got their money and take all their money and bought
30:19
it all into Bitcoin. I think the only people that have really kind of done that were the Winklevoss twins,
30:22
but I think that they had enough fear to risk everything on there without compromising their
30:26
life. But all the people I know who got wealthy and continue to
30:29
build wealth, they're business people. They're building and buying businesses.
30:33
And some buying real estate assets, depending on the marketplace. And
30:37
again, I'm not too sure about the long-term prospects of certain markets on that
30:40
one. And Japan's a good example of what can go wrong there. But
30:43
certainly, I do
30:48
hope Bitcoin is adopted as a currency. I think it's far better
30:52
than fiat. And if
30:55
it happens to stay as a store of value, fine. But
30:58
if it's very volatile, very difficult to play, it's outside the
31:02
circle of competence for me. If it's outside it for me, it's probably outside it for you. And
31:05
it's just better to say no and stay away. You don't have to play
31:09
every game. Just find a game you're good at, you got a
31:12
competitive advantage in, you're good at, and play the game. And by all accounts, there
31:15
happens to be some people that do that with the trading of crypto. So, whatever
31:19
game yours is, play the game that's
31:23
most certain to give you your money back because investing at the end of the day is laying
31:26
out money today to get money tomorrow. It's a bit like putting your
31:30
hand – a bird in the hand is worth two in the bush. It's
31:33
figuring out in investing, if I invest my money, how
31:36
many birds are in the bush and what's the chance of me getting them out. And
31:40
if you approach it like that, you'll realize that the chances and
31:44
the odds of putting in to get out is so uncertain that
31:47
you can't bet big on it. You can't build a life around it. It's
31:50
just too uncertain. And that's why I
31:53
think it fails the test of investment for me. If
32:00
it's widely adopted as a currency, it may meet a better currency test,
32:03
maybe, than fiat because
32:07
of inflation. And so, if I had to choose which path Bitcoin
32:11
went down, I would choose it to be adopted as
32:14
the currency. Then to oscillate and play around as
32:17
a as a random speculative asset because I think that does a lot of damage to people
32:21
Whereas it was fully loaded as a currency. It probably couldn't do any more In fact, it'd
32:24
be better for the world if it was because then people wouldn't have governments
32:28
inflating the currency way on them It's a pernicious tax on people that
32:31
would go away So I think if I had to choose definitely would
32:34
prefer to be adopted as a currency and I hope it does but
32:38
without a doubt I'll still be over here buying businesses and Bind
32:41
the goose and hope you are too. I hope that makes sense. If you've enjoyed this episode,
32:45
please go and hammer me in the comments. If you want to come and smash me
32:49
in the comments, go for it. I'll come and fight back. I like the savage ones.
32:52
Be as savage as you can. It doesn't bother me. This is my position. In
32:56
life, if you say nothing, do nothing, then you'll be
33:00
nothing. Have a position in your life. and tell people what you feel
33:03
and what you think. I think it's better for the world if you do those things so you
33:06
really impart your wisdom when you walk your own talk. This
33:11
is why I think about this because I've walked this path. Come
33:14
and play with me in the comments. If you also support this position
33:18
or you like it, come and ask a question or pop a comment below. Again,
33:21
I'll come and reply to you because I like to jump into the comments. on our YouTube
33:25
channel. Of course, I do the same thing on our Spotify on our podcast too. So
33:28
come and play in the comments and I'll see you down there. And
33:31
of course, hit the subscribe button and share this with a friend and I'll see you in the next episode, the
33:35
Money Grows on Trees podcast. Thanks for listening to Money Grows on Trees. If
33:38
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