CTC Podcast S01E08 - Crypto V1-4.mp3
Rishi: [00:00:00] Yes. Taking profits is important. Pre-established some targets. You hit the target, you take some profits and make sure that you don't get into this narrative where it's like, Oh, man, I made a bad decision. I should have waited. No, no, no, no, no. You made a good decision because you came up with a plan and you stuck to your plan. And I'm proud of you for that. And that's the type of game that you need to make sure that you understand with all the emotions that go into trading Bitcoin and cryptocurrencies. And it's important to talk about this because a lot of people throw money at crypto and they don't even have an emergency fund and that's a big mistake. So if you're going to treat crypto as an investment, then treat it as an investment and have some sound investment mentality.
Gareth: [00:00:43] The topics that we discuss inside this week's conversation are of a financial nature, and neither she nor myself nor anybody else that he starts inside this podcast is or should be taken as financial advice and before making any investment decisions, speak to somebody that you trust and gather the information that you need to feel safe to make the financial decisions that best support you and your specific needs. Hello and welcome to the show where we have conversations with subject matter experts to support you to become a more courageous father, leader, lover and brother. In today's show is Bitcoin The Future of Money? I'm going to be chatting to Rishi Bond. When Matt and I went through the evolution of the Livermore Perfect Days brand into fathers, sons, brothers, we created something called the Founders Circle.
Gareth: [00:02:24] This was a four week digital men's retreat where each week we took eight brothers through a series of themes. And one of the themes that we unpacked was money. In that week, Rishi showed up and we went backwards and forwards through a series of voice notes inside our digital mental retreat. As Rishi unpacked his journey of understanding cryptocurrencies and how he sees it as a potential future currency to be able to support what seems to be a failing traditional money system. So without further ado, sit back, relax and enjoy this conversation with Rishi Bond. What's up, everybody? And welcome to the Fathers, Sons, Brothers, Main Stage. The theme for this week, Inside Fathers, Sons, Brothers is going to be around money. Your self enquiry questions are going to be related to your journey with money and it made sense for us to have our level of partner be somebody talking about the future of money. While we're not 100% sure about much in our future at the moment, I think it's pretty safe to assume that the current way that the world does money is broken. A financial system that takes our deposits, pays us minimal interest rates, lends those out at nine or ten times the value of the deposit received and making exorbitant interest rates while loaning out our own money through the traditional banking system is clearly a model that's not working.
Gareth: [00:03:57] The United States at the moment is driving themselves into a huge market collapse through just continually printing US dollars to try and prop up a failing economy. I believe that it's part of our sovereign responsibility to make sure that when the inevitable financial crash happens, that we're not left with our pants down, so to speak, or not prepared for what's coming. So while I don't know what is coming, I can share a little bit about my journey with cryptocurrencies. It's been an amazingly beneficial and supportive part of my life over the last few years. I invested in Bitcoin. Having met a guy on a train in Thailand, probably 2015. I went all in because I had some money saved in South Africa that wasn't doing much, and the more time I spent researching Bitcoin and other cryptocurrencies, the more I saw them as the potential future of money without at that stage knowing just how important it would be. And so, yeah, it's been a beautiful blessing of abundance into my life and as a result, I've managed to connect with other cryptocurrency enthusiasts along my journey over the last few years. And it gives me great honor today to introduce a dear brother and friend whose name is Rishi. Rishi Bond was born in Guatemala. He started his cryptocurrency journey as an Ethereum miner in 2017, completely convinced that cryptocurrencies would change the future of money.
Gareth: [00:05:31] He went all in and at the end of the year, only to lose most of it by 2018 to 2020. In the bear market through pure conviction, Rishi continued to stack satoshis during the bear market, and he became an expert on both the economic and technical side of Bitcoin and is now recently retired at 37 Traveling Europe and living the life he's always wanted. His focus now is on an NGO called Bitcoin Lake, which will bring Bitcoin funded social programs to Lake Atitlan in Guatemala. Over the next few days, we are going to be doing a back and forth conversation with Rishi on this main stage. Feel free to engage in the group chat which is attached to this and as well as ask any questions around cryptocurrencies, bitcoin and any of the topics that Rishi unpacks directly in the group chat. And we will allocate those back to Rishi and he can tackle those individually. So Rishi, welcome to Father Sons, Brothers, welcome. It feels like an honor to have a dear friend and brother on the main stage. The first person we are interviewing on the main stage and perhaps you just want to unpack a little bit more about your journey of where you've got to and why are you so excited about Bitcoin? How do you see Bitcoin as an important component of the new financial system that we're going into?
Rishi: [00:07:00] Wow. Thank you so much for that wonderful introduction, Gareth. I really appreciate it and trust me that the respect and admiration is definitely mutual. Honored to consider you a brother and honor to be here. Thank you so much for the invitation. We are in different time zones as he was saying. I am in Europe at the moment, so I'll be responding probably when most of you are going to be sleeping. My name is Rishi Bond and I'm happy to tell you guys a little bit about my journey and what I've learned in these five years of really going. In not only financially but theoretically and technically into Bitcoin and cryptocurrencies. I'm going to be happy to share my tips and tricks and any questions that you guys might have about its current state, future state as well. So I'll be answering through different voice messages. I don't really do well with the with answering or doing one big long messages, so I'll probably do multiple smaller ones. So like Gareth was saying, I am Guatemalan, born and raised in 1983. I'm 37 years old. I actually grew up in a strange but very privileged, English speaking Guatemalan bubble. My my dad is from Philly, and I spoke English at home and at school. And so even though I lived in a third world country, I was very privileged to be surrounded by a lot of English speaking friends.
Rishi: [00:08:44] And I went to college in the United States, came back here in Guatemala, and I'm an industrial engineer. Just a quick little resumé plug there. Just so you guys know, at least my technical and academic background. I'm an industrial engineer, post graduate degree and quality assurance master's in business administration and Master's of Management from Tulane University. And I, I was doing the corporate thing. You know, that's what you do with the masters, right? You I was doing the corporate thing for for a really long time. I was fed that this was the idea of success. This was the path that I needed to take. And I really bought into it and I was good at it. You know, I'm very structured. I'm very left brain numeric, quality assurance, process oriented, maximization of finances, minimization of expenses. And I did the corporate thing for what seems to be about 15 years and I'm now retired thanks to crypto, thanks to Bitcoin, I was able to completely unplug and really chase my dream. So I kind of want to get into directly answer the question on my next voice note. Like Garrett's ass, which is, you know, why is this important? Why is cryptocurrency Bitcoin specifically? Why is it so important? What is the game changer here? So I want to I want to dive into that a little bit more on the question of why Bitcoin. Also, if any of you are wondering about my username on Telegram Taxation is theft by Bitcoin.
Rishi: [00:10:30] That's me. I, I became a libertarian probably about five years ago. Maybe a little, maybe a little bit more, maybe around six years ago. I'm very passionate about freedom. I'm very passionate about sovereignty. And so in case any of you were wondering what that meant, now, you know. All right, so let's dive in. So Gareth's question was two pronged. Two, the first one is an introduction as to cryptocurrencies, how I got into them. And then the second one is why I think this is important. And just quick little parentheses I'm walking around here, it's kind of hard to find a space where I can be alone and get some silence. So apologies for any background noise. And also if at any time I throw out a term that some of you are not familiar with, please leave a question in the comments. Drop me a note and I'm happy to answer anything that you guys need clarification on. So the first part is, how did I get into crypto? I kind of learned about cryptocurrencies, bitcoin specifically probably around 2012, 2013. I've always been really in the tech space trying to be very, very aware of any technological advancements being corporate, working as a project manager. Quality control was always very into digital transformation and I heard about Bitcoin and probably similar to most of you.
Rishi: [00:11:57] The first thing that I that came to mind was This isn't going to work. How is it that, you know, this magic Internet money that mostly resembles Chucky cheese tokens is actually going to work, it's actually going to have some value? This makes absolutely no sense. It's not physical money. So you know what? Not for me, but the universe just kind of presented it to me over and over again. And it's like six months later there was another article and then it just got worse and worse. Four months later, three months later. And then I'd be just getting so much news about Bitcoin and how much money people were making in cryptocurrencies, which I think is probably the reason why 95% of people get into Bitcoin in the first place, which there's nothing wrong with. There's nothing wrong with making money, there's nothing wrong with making money off crypto. But it's a great hook. You know, it's most of us are in this space because we were promised to be rich. You know, we heard these stories about, oh, yeah, I invested in this coin and now I'm retired, now I'm a billionaire and I'm a millionaire. And it was all very sexy. It was all very enticing. And so in 2017, it was just very difficult to ignore in my world. And I, I finally decided to take the plunge, but I did some research.
Rishi: [00:13:21] And living in Guatemala, there was no one who had ever heard about crypto, no one who had heard about Bitcoin. I asked my friends, I asked on Facebook, no one knew what I was talking about. And back then there were two major ways to get crypto. One of them is buying them through an exchange and then the other is mining it. So I said, okay, if I don't have access to buying crypto because I can't get on Coinbase because I didn't know that there were some exchanges that received wire transfers. And to me, the idea of sending some wire transfer over to Japan, to someone who I have no idea who it was, was just weird. So I said, All right, then the option is let's mine cryptocurrencies. And I started doing some research on mining Bitcoin specifically, and I realized that I needed some very specific hardware card, a six for it to actually be profitable, and I needed a lot more investment. So instead I started researching on how to mine Ethereum. And with Ethereum you can you can use or you can mine Ethereum using graphics cards. And so after doing some research, I was 100% convinced and I said, All right, this is the way to go. So I went to the States, I went to Miami and I took the plunge. You know, I took some money out. I think at that point I think it was like 6000, 7000.
Rishi: [00:14:49] And I bought six graphics cards, six GTX 1070s, and I brought them down with everything the motherboard, the hard drive, the processor, the RAM, everything. I brought it down to Guatemala and I set up my mining rig. So that was my introduction to cryptocurrencies. I was I was a miner before I could even buy it, I had to mine it. And that's when it became real for me, because when I started seeing that it actually worked. I just left this machine on which I had to configure from scratch to learn how to do that. I've always been kind of a hardware guy, and I started seeing Ethereum going into my wallet. I said, Holy crap, this shit is real. This, this actually works. So I was blown away. And at that point, once I actually started seeing that it worked, I started believing in it. And that's when I really started to get into the fundamentals of why cryptocurrencies are so important. Part two of the question in the Next Voice Note. So the second question or the second part of the question was, why is this important? And it took me several years into my journey to really understand, and it really culminated probably about six months ago, no, even less like around three months ago when I went to Bitcoin Beach over in El Salvador.
Rishi: [00:16:13] So like I mentioned, you know, my intro was as an Ethereum miner and I started getting Ethereum into my wallet and then came like the next stage into my cryptocurrency journey, which is like, let's turn this magic Internet money into physical dollars. How do we do that? And the moment that I was able to do that, that I was mining this magic Internet money, I sold it somewhere and then I got get sales, which is the national currency of Guatemala. I said, Holy crap, this works. Okay, beautiful. And I kept doing that. And then I started making more money with gains. You know, the price of Ethereum started appreciating and I said, Wow, I'm making money. Let's cash some out and turn it into Gonzalez. And it worked. And then I said, Okay, what else can I buy? And I started diversifying my portfolio. I started getting into that, I started getting into trading, and I bought a little bit of altcoins or more altcoins. I bought some more Bitcoin. I started seeing how I was making money and then I sold it and put it into my bank account and I said, Wow, this is this is really, really real. And I really think that this is part of the cryptocurrency journey of everybody. You need to go through these steps to really believe that it works. So for me, it was mining it, getting in my wallet and cashing it out several times.
Rishi: [00:17:37] And it was also about making a ton of transactions. I don't know about you guys if you guys have ever made a Bitcoin or a cryptocurrency transaction and you're copying that address, which is a funky number, about 20 characters long, that if you get wrong, like if any one of those characters is wrong, you're sending it to the wrong place. I don't know about you guys, but about probably the first 20 or 30 times that I sent the transaction and I clicked on the send button and it would disappear. I always had the doubt that it would just not work. So there's like this repetition that needs to occur for the conviction to actually happen. And so after all of this, after this trial and error and after seeing succeed time and time again, then it became real to me. And that's when I started researching about Bitcoin as an actual form of money, not as a way of making money. And I started reading these stories about what was happening in Venezuela with hyperinflation and people working their lives as a private business just for the government to be making bad decisions on the national currency that you've earned and seeing it devalue it at that speed was heartbreaking to me. Like I can imagine being an entrepreneur, spending ten years of my life establishing my cafe, having some savings, putting it in the CD or whatever it may be, and just having everything plunge in a period of months.
Rishi: [00:19:11] And what they were doing to hedge. Against the risk of even more hyperinflation was that they were buying Bitcoin. And because in Venezuela, electricity is subsidized. Same as China. They started mining Bitcoin as well, and that was the only way that they could survive. That was the only way that they could get this wealth or the amount of savings that they had and be able to protect themselves against the central government that was making bad decisions on their money and living in a third world country. But yet being so Americanized has been a blessing in disguise because I've been able to see firsthand the impacts of living in a third world country where corruption is so prominent. So when I started seeing the stories about Venezuela and then started hearing about and reading about the stories in Argentina and now Nigeria, where, by the way, small parentheses, Nigeria has the biggest adoption of cryptocurrencies, where 30% of the population already has crypto. That's when I started realizing that this is the freest money in existence, and I started seeing how the power of decentralized networks actually has and can have in the world. So that's why for me, it's no longer a question of if Bitcoin is going to be a global currency. It's just a matter of when.
Gareth: [00:20:45] Thanks, Rishi. Great introduction there, brother. It's not much there. I want to underline a couple of things. One of them is your username Taxation is Theft by Bitcoin. It's a bit of a rabbit hole and it's not something that we're going to go into now. But I would like to just point out that I think. As we start to see our traditional establishments, large corporates, governments failing us, and it becomes more and more obvious. Things like taxation is really the fuel that continues to keep these existing systems going and. The other thing that I would like to underline was what you said around the idea of not knowing whether Bitcoin could work. The idea that Bitcoin may not even be a thing, that it could just be what you call a check your cheese tokens. The interesting thing about any money is it's really just a collective agreement. It's just an agreement that all of us have decided that this particular token has some value and the system works as long as everybody buys in and believes it. The more people that buy in, the more valuable it becomes, the more stable it becomes until it doesn't. And what you then said, which was really powerful, was that repetition creates conviction. And as we start to understand that these stories, whether it's a collective story about money or the stories that we tell about our relationship with money or the story that we tell about. The world or the story that we hold about our bodies. The more we tell those stories, that repetition creates conviction. So I just want to underline that that was a really, really powerful intro. And what I'd like you to tackle next is perhaps a short. And. Opinion piece. Just really unpack how you see Bitcoin being different to traditional money. Like what's what's different here. And perhaps you want to talk about some of the concerns that you have, which you alluded to around. People using Bitcoin only for the idea of cryptocurrency, only for the idea of gains. Like where do you see that as a potential problem?
Rishi: [00:23:14] Awesome follow up questions, Gareth. Fantastic. So I'm going to start with the first one, which is what is money? And I actually never asked myself this question until I really got into cryptocurrencies. Sure. You know, I went through some economics classes, but they never really tackled this because it's just such an underlying part of all of our culture that we don't even really ask how it works. It just works, right? It just works, you know? And at least in my experience, you know, when I was small, my first interaction was with money was when my parents would give me some money. And, you know, living in Guatemala, you got to get some tortillas every once in a while. If you're a kid, you're the one who go gets the tortillas, right? So they would give me some money and it's like, all right, you know, here's five Qs, here's a piece of paper, you know, go get some tortillas. I would give them this paper. They would give me the tortillas and some change. And it was like, okay, this is the agreement. It was so easy to learn. It was so straightforward. You know, you have a piece of paper with a number on it. You give it to someone, it has value. The thing that you're going to purchase has a nominal value and you might get some change. So growing up, you know, it just works. It's such an underlying part of our culture that it just works. But it's not until I got into cryptocurrency when I really started to question like, What is this? And just like you mentioned, at the end of the day, it's still paper, and the only reason why it has any value is because enough people agreed it to be so, you know.
Rishi: [00:24:53] And back when these. The first silver coins started being emitted. They all came from some sort of central. Institution, whether it be a monarch or some other type of hi, hi, some other type of authority figure that would admit these coins that would admit this money. So why does bitcoin have value in one aspect? It's because enough people agree it to be so. But one of the things that I recently really embodied and understood was that the reason why Bitcoin's value is so high, speculation aside, is because of the network effect that it has. The fact that this is a global currency that cannot be censored, that cannot be shut down by any government or institution or authority figure, is one of the reasons why it's worth so much. Can you imagine, for example, being on a platform on the Internet that can simply not be censored ever? That would have a lot of value in bitcoin is the same thing. Bitcoin cannot be censored. Bitcoin cannot be shut down. And this is one of the reasons why Bitcoin is worth so much. And I really understood that network effect until recently, which leads me into the second question. So how is Bitcoin different than normal Fiat? If we take a look at the underlying technology that supports Bitcoin called blockchain, it has some characteristics which are very important.
Rishi: [00:26:40] Number one is that it's completely transparent. It's public. This is a public ledger that can be audited and it's completely transparent to absolutely anyone. Number two, it's immutable, which means that it cannot be changed unless there's a 51% attack, which I'm not going to get into too much. But basically what it means is that if enough part of the network, which would be 50%, 51% of the network is run by one person with malicious intentions who wants to change the blockchain. He could. That's highly unlikely to happen because of the way that Bitcoin is set up if anyone were to gain that much. The network power. It would be easily identified and quick action would be taken. But going back to what I was saying, it's immutable, it can't be changed. And another characteristics of Bitcoin is that it is extremely flexible. It has no intermediaries, which means that with Bitcoin you're not only holding money, you don't have a bank account, you are a bank with Bitcoin. When you have Bitcoin, you can send any amount of money in Bitcoin to anywhere in the world instantaneously or close to instantaneously with little fees. Anywhere around the world without intermediaries. And that's another characteristics that super important. So this kind of talk about some practical use cases here because we're talking about how bitcoin is so wonderful, right? It's so wonderful.
Rishi: [00:28:34] You can send money anywhere in the world, just like an email. Okay. How is this useful? Well, there's barely any red tape, you know, which means that if you want to send Bitcoin to any developer around the world, you can. You know, as an entrepreneur, for example, if you want to hire a developer, you probably have to go through a lot of red tape. You know, if he's not in the country where you are, it's just a hassle, right? If he is, let's say, for example, in India, you know, how are you going to send him payment? You know, maybe you could use PayPal. But again, they take a big chunk in fees to be able to do that. Paypal, for example, in Guatemala, you can't cash it out. It has to stay in PayPal as a PayPal balance. It's not connected to banks. So that's a problem. It fees again or okay, let's send them a wire transfer. But that's also expensive. You know, swift a swift transaction can go anywhere from 25 to $50, depending on amount, depending on country destination. And the person that you're going to send it to needs to give you that information. So it's like a big hassle with Bitcoin. All you got to do is like, send me your Bitcoin address. He sends you the Bitcoin address, you send them Bitcoin. It's done so you can pay anybody around the world that can accept Bitcoin without any intermediaries, which is a big chunk and a big part of the blockchain community is that no intermediaries and Bitcoin is here to eliminate all the intermediaries, including banks, especially banks.
Rishi: [00:30:07] And that's why banks really hate Bitcoin. And I think that they're coming to a point where they realize, wow, we can't shut this down. We tried really, really hard, like JPMorgan was, you know, bashing on Bitcoin for the longest time. And now they've basically conceded and say, shit, you know, we can't shut this down. So I guess we might as well roll with it. And you're seeing big banks starting to invest in Bitcoin ETFs, you know, and other type of derivatives. So you can't shut this down and people are already realizing this. And, you know, one of the things that at a very high level in theoretical, when we talk about the Bitcoin network, what we're really talking about is a system of trust. It's a system of trust where the participants in the network don't trust each other because that's what a bank does, right? A bank is a form of trust. A bank is an institution that guarantees that whoever it is that has that plastic card, the money that they have is good for it. You know, the check that they write, they're good for it, you know, and you have a bank, you have an institution that gives you that trust. So and they charge a hefty fee for it. So with Bitcoin, it's a network of trust, because with Bitcoin, since you have miners who are the people that are actually validating the transactions, they don't care who you are.
Rishi: [00:31:44] You know, they they don't know where you live. They don't know what you're spending your Bitcoin for. They have absolutely no idea, nor do they care. They don't care if you're tall or short or you have a masters or you never went to school, or if you live in India or if your dad was American. They don't care. The only thing that the miners care that are validating the transactions is do you have enough bitcoin to send? Are the addresses valid? Are you going to be able to pay enough minor fees to be able to validate this transaction and they send it through? Which is another reason why bitcoin is so important because. With Bitcoin, you don't need to ask permission to have Bitcoin. You know, when you're in a bank and you want to have a bank account, you need to go there and go through the KYC process. Kyc stands for Know Your Customer, which is part of the anti-money laundering rules or AML rules issued by the United States government. Any institution, any financial institution around the world that wants to have dollars needs to comply with anti-money laundering rules, including KYC, or know your customer rules. So to be able to have a bank account, they need to know who you are present some sort, some form of ID where your address is, etc., etc., etc.. But with Bitcoin, all you have to do is download an app and you can already receive Bitcoin.
Rishi: [00:33:07] And that is super powerful. That's super powerful because it allows you to bank the unbanked. It allows you to give anyone access to a global economy with only a cell phone and an internet connection. I can go on and on and on about that topic, but I want to move on to the last question, which is, you know, our crypto gains bad and. No, no, no, the crypto gains are not bad. You know, we all came here for the money, but we're going to stay for the technology. The more that you understand Bitcoin, the more. And the more passionate you are about freedom, the more conviction you're going to have. And seeing Bitcoin as not only an asset but a necessity. You know, if you are in favor of freedom, if you are against any type of censorship, if you if you're starting to see that governments aren't the people who can best manage your money, then you're going to start being more passionate about Bitcoin. So I can talk about that on and on and on. But the gains aren't bad. You know, I actually think that the gains are part of the process. And the gains is is kind of like the perfect Trojan horse, if you ask me. You know, you you kind of like pitch the idea, hey, you know, we're going to get you rich by Bitcoin. You're going to get rich and then you make some gains.
Rishi: [00:34:35] And then you actually start to realize after you use Bitcoin that, wow, this is actually pretty, pretty cool. So you come for the gains, but you stay for the technology. What what is important, though, for. All of the people who are actually trading cryptocurrency is that if you have ever. Dealt with stocks or dealt with Forex. You know, if you consider yourself an investor and a long term investor, then you would really analyze a company before buying their stock. You really, really want to check out their balance sheet, make sure that their fundamentals are straight. And then after you have conviction that this company is going somewhere, then you're not going to be fazed by the volatility that it brings. So if you're solely focused on the gains and you're not really convinced that Bitcoin is here and will be here for a really long time, then what's going to happen is that you're just going to consider this casino money and every time it goes down you're going to get really nervous because you don't believe in the technology. Not really. And you're going to sell and you're going to make bad decisions. So when you really believe in the technology and you see it come down, since you have conviction and since you understand that this is really long term and it's not going anywhere, then that shouldn't phase you. So really understanding the technology and the power behind Bitcoin regardless of price and why it's important, why it's necessary in our society.
Rishi: [00:36:24] When you see those dips, you're like, All right, it's cool. I know it's going to come back up. And actually, you know, one of the coolest stories when I went to Bitcoin Beach in El Salvador was I was talking to this lady and she had a very humble, very small, not very well painted pupusas stand. And if anybody hasn't gone to El Salvador to eat some pupusas, you got to go because pupusas are the shit. They're fucking awesome. You can google what pupusas are if you don't know what that is, but they're really, really good. So I went to her and she accepted Bitcoin because in Bitcoin Beach a big chunk of the businesses already accept Bitcoin. And I asked her, I said like, Hey, you know, aren't you scared that Bitcoin is going to come down and crash and. You know, this is a lady, I would say maybe about 55 years old, didn't go to high school. And she said, no, I don't worry because it always comes back up. And I was blown away. I was blown away at her response because I said, wow. Like so many of the people that I work with and so many of the people that I come into contact with that have invested in crypto don't even have this mentality. So it's a kind of round up that response. Are crypto gains bad? No, but it will make you a better investor if you have conviction on the underlying technology.
Gareth: [00:37:57] I love what you said about. People come to crypto for the gains, but they stay for the technology. And I'd like to say that I think they stay for the community as well. And just underline one of the things that you're speaking to there, which is I believe that people shouldn't just be investing in crypto just for the gains. The gains are in attractive components of it, but if you only come for the gains we face the possible danger of re perpetuating a similar system to the one that we have at the moment, which is gains above all else. Yeah, I think we've seen the challenge of ever expanding growth targets that just serve the bottom line without considering anything else in how we measure the success of our businesses and our projects and stuff like that. And so it leads me into the next question, which is what is the role of having an investment plan and what's the importance of having that plan in relation to separate and separating the emotions out of trading? And the reason I say that it leads into that is I believe that one of the criteria that we should all be making as part of our investment strategy is a percentage of our holdings being reinvested into projects that are going to make the world better somehow. And so that we're not just continually acquiring masses and masses of Bitcoin gains or crypto gains. And I've noticed this in my own behavior when it's going up, I'm like, Yes, good bitcoin feeling so amazing comes down.
Gareth: [00:39:30] I'm a little bit sad about it, but really to have a financial plan that says, Cool, this is when I'm going to take some profit. When I take some profit, I'm putting this much back into projects that are going to make a difference or supporting community around me or people that could use some of these gains because yeah, I think that's an important part of shifting our money stories. So that's one thing I want to just ask you to unpack is what what is the role of a a plan, a financial plan, and how does crypto fit into that? And the second would be, what about people that have been looking at Bitcoin for a little while? They probably saw it at like 15. They maybe even thought go write down. And they're feeling like at this stage I might be a bit late to the party. What sort of advice do you have for anybody that's looking to get in but feels like they might have missed the opportunity to buy Bitcoin? And how does that fit into the strategy? So how do you suggest people use their financial plan to acquire crypto and the question of arriving too late? Bitcoin's not too expensive. I should rather wait that it goes back down to 15 or should I still get in? Is it expensive if you can speak into that?
Rishi: [00:40:37] All of those are wonderful questions. Gareth So I want to highlight the usual life cycle of someone who bought crypto or Bitcoin. The way it usually works is like right now you can't run from it. Everyone has at least heard of Bitcoin at one point or another, and for someone who has Bitcoin now, probably they bought in some time ago and they never bought when they first heard about it. You know, just like myself, you heard about it a couple of times and then you start hearing some stories and then finally, like a friend is like, Yeah, I bought in, I made some money and you started to finally consider buying Bitcoin. And usually what you do is you buy Bitcoin first and then and then comes the real test because you start getting these messages from people. It's like, Hey man, did you like, did you hear about this new coin? It's called Ricci coin, man. It's going to go 100 x bro. It's going to have massive gains. You better get in now and people start to allocate their precious capital to shit coins and I term shit coins. Any alternative cryptocurrency that's not bitcoin or a blue stock crypto or Ethereum. So people start diversifying into these shit coins. Thank you. People start diversifying into these shit coins and with the illusion that they're going to make more money than if they would just buy crypto. So when you start talking about portfolio management, the one thing that so many people forget about and so many people forget to mention is risk.
Rishi: [00:42:24] They don't contemplate risk, right? So a lot of people would say, yeah, you know, what should I buy when I first get started in cryptocurrencies? And my suggestion is always 50% Bitcoin, 25% Ethereum, and then 25% casino money, which is buy whatever the hell you want. But as long as you make sure that the biggest part of your portfolio is Bitcoin, you're taking into account risk. Because when shit hits the fan and the market dumps, if bitcoin goes down 30%, all these other bitcoins are guaranteed to go down 60, 70, 80, 90, 95%. So when we talk about portfolio management, it's essential. It's crucial that we talk about risk. We have to talk about risk. We need to contemplate risk. And any investor who is an investor knows this. But there's a lot of people buying crypto who don't have the investment formation or educational background on investment or have educated themselves about proper investing. And so you have a lot of people that are just trying to make money and they get hurt. People get hurt badly because they throw you know, they threw $10,000 at risky coin. And unfortunately, you know, something happened to Rishi and Rishi coin is no longer. And so they lost a lot of money. So we need to contemplate risk. So going back to the cryptocurrency investor life cycle, so it's like step one, I heard about Bitcoin didn't buy Bitcoin.
Rishi: [00:44:04] Step two, I heard about Bitcoin a little bit more. Now I'm deciding to buy Bitcoin. Step number three, I bought some Bitcoin. Step number four, you made some money off Bitcoin. Step number five, you made the terrible mistake of overly diversifying your portfolio and taking on more risk than you can manage. And you lost money. And then the next step is actual investment maturity. And so I think that it does require a little bit of pain. You know, there's so much to learn here about emotional management. When you start seeing these gains and you start seeing these losses, there's so much going on in your body that if you're not aware about what's happening, if you're not really consciously and deliberately making decisions that are based on calculations and predetermined targets, then you're bound to get wrecked not only financially but also emotionally. So if if we want to come together as brothers and if I can portray to anybody who's seriously considering and allocating a large chunk of their portfolio or a large chunk of their capital into crypto, the first thing we need to do is educate ourselves. We need to educate ourselves on how to be proper investors. And for that, I'm going to send a book right now that has helped me a lot in my investment journey. It's a bit of an older book, but the the foundations are solid. So if you want to treat cryptocurrencies as an investment, treat them as an investment.
Rishi: [00:45:39] And, you know, when my clients come to me and ask me about financial advice and about investing in crypto, the first thing that I even ask them is like, Do you have an emergency fund? And here's a small little quote. I'm not a financial adviser. I'm not a certified financial adviser or planner. I had to make sure. So just for legal reasons, this is not financial advice, I have to say that. But when they come to me, I give them the suggestion. And the first thing that I asked them was like, hey, I want to invest in crypto. The first thing that I ask them back is, do you have an emergency fund? And if the answer is no, I'm like, Don't invest in crypto. The first thing that you need to have is your emergency fund covered. And I coined what's what I like to call Ricci's financial pyramid of. Success. And it constitutes a pyramid with three different layers. The base layer are expenses. So this is anything that you have to pay regarding rent, regarding food, make sure that you have that covered in some sort of checking account. The next level which you can only get to once you have the first one covered, kind of like Maslow's pyramid of needs. The second level will be your six month emergency fund. And this is really, really important. And I tell them this you need to have enough liquid assets to be able to cover absolutely any medical expense or any emergency where you don't have income for six months.
Rishi: [00:47:13] And that's what this emergency fund is for. So I tell them. Calculate how much money you need per month to live comfortably without any form of income, and then multiply that by six. And this is your six month emergency fund. Once you have your six month emergency fund, then you can move on and graduate onto the next part of the pyramid, which is your investment portfolio. Okay. So that means you have your expenses, you can cover your expenses. You have a six month emergency fund. Fantastic. Now, all that extra money that you have that can go in investments and then we can talk about what that would look like, whether it be land, whether it be gold, whether it be silver, whether it be other liquid assets. And it's important to talk about this because a lot of people throw money at crypto and they don't even have an emergency fund. And that's a big mistake. So if you're going to treat crypto as an investment, then treat it as an investment and have some sound investment mentality. I guess what I'm trying to say is you can't run before you learn how to walk. And if you rush into this, you can get hurt because this is a very risky, highly volatile market. Let me say that again. If you rush into this, you will get hurt. So the best thing that anybody can do that's interested in really investing in cryptocurrencies is investing in their education, investing in ensuring that they know exactly what it is that they're doing, taking their time, doing their own research, watching the YouTube videos, by the way.
Rishi: [00:48:57] My favorite YouTuber and Bitcoin celebrity is Andreas Antonopoulos. I love him. If you want to know anything about Bitcoin, he explains it very, very well. But if you take your time and you actually do this slowly, you can avoid all the mistakes that I made in my cryptocurrency. Cryptocurrency journey don't make the same mistakes that I did, and I've highlighted them like everything that I'm telling you guys not to do. I'm telling you guys not to do it because I did it and I lost a lot of money. I lost a lot of money doing it. And then I changed drastically my investment mentality. And that's what's been able to get me where I am today. Regarding training, this is important. Buy low, sell high. Right. Sounds easy, right? And not easy at all. It's actually really, really hard to call tops, really, really hard to call bottoms. And it is not easy to sell into green and to buy into red. It's actually one of the hardest things you will ever do. So trading is actually really, really hard, like swing trading, which is when you try to trade large positions or irrelevant of size. But when you trade in larger time frames, that would be called swing trading and then day traders would trade on the daily.
Rishi: [00:50:31] If you don't have the knowledge on how to do this, stay away from trading because you will get hurt and you have this. The cryptocurrency market is such a free market and so free from regulation that there is a lot of manipulation that goes on. That's just part of the game, you know, that's also part of the reason why you get so many gains is because it's unregulated. So if you're going to if you're going to trade, then just make sure that you get educated on how to do that properly, because it's not easy and the system goes against you and you and you have bots that are just thinking so much quicker than you are and you can really lose a lot of money. Most people who trade lose money and the bar of comparison is take that amount of money that you did trading and then compare it to just buying Bitcoin and holding and ask, ask yourself, was it worth all the emotional drainage? Because that's what will happen. Maybe you'll be able to make some money. But at what cost? At what price? You know, you're up all night, you're glued to your phone, you're stressed the fuck out constantly because you're seeing the market dip and you're getting close to getting liquidated or close to getting that stop loss triggered. At what price? You know, so if you're not going to be making like two or three or four times consistently, then it's really not worth it.
Rishi: [00:52:01] You know, value your time, value your time, value yourself the time that you spent with your loved ones, because trading will definitely glue you to your phone. So my suggestion to 90% of the people is just buy it and hold it. Buy it on a regular basis. Continue to buy, continue to buy, continue to buy. And yes, taking profits is important. Pre establish some targets. You hit the target, you take some profits and make sure that you don't get into this narrative where it's like, Oh man, I made a bad decision. I should have waited. No, no, no, no, no. You made a good decision because you came up with a plan and you stuck to your plan. And I'm proud of you for that. And that's the type of game that you need to make sure that you understand with all the emotions that go into trading Bitcoin and cryptocurrencies. Okay, that was all a long answer to the first question that Gareth asked. So moving on to the second one, which has to do with and I really caught my eye about the importance of giving back and you know, blockchain, the blockchain community is so community based that I love the foundations that it has about giving back. And I think it's super important that a certain percentage of the gains that you have are actually allocated to investing in other people projects that you love or believe in.
Rishi: [00:53:22] And I think that's really important because that way we come together and we rise as brothers and sisters, because if we just make those gains for ourselves or like in this little silo, you know, and it's such a healthy psychological exercise and emotional exercise to give back, it's so important to give back. So, yeah, I agree with you 100%, Gareth. It is important to give back. The last question was, is it too late to get into crypto? Hell no, it's not too late. Like you're if you're getting into crypto right now, you're still only like 5% of the world. Don't let that stop you. Now, that being said, there is the law of diminishing returns. Obviously, it's not going to be the same if you invested five years ago then if you're invested today. But that doesn't mean that you still can't take advantage of good gains. So it is not too late. It's still really, really, really early and there's still much volatility to be explored and there's so many things to actually dive into in crypto, like things with Defi, which is one of the things that I'm super excited about is decentralized finance. And I'm guessing that most people here, it seems like everyone has crypto or is about to have crypto, has heard of Defi, and I think that that would be an excellent topic to tackle next. Gareth But you let me know. I'll wait for your questions for, for the next little block.
Gareth: [00:54:56] In 2015 I watched a documentary called The Secret, and I wanted to test out the process of visualization because I was a little skeptical about what was being taught around the subject called the Law of Attraction. What manifested from my vision board item, which I created that said $1 million in my PayPal account by December of 2016, which at the time of creating that, I thought my online business would get to a place where it expanded and grew and bought $1,000,000 into my world. It was a complete long shot. Let me just say my business was I had one or two clients paying $150 an hour for my time, and it was a long shot that I was going to get to a million. At the time, I had invested about 40,000 of my savings from getting out of my business in South Africa into Bitcoin and a couple of other cryptocurrencies. And two years later, that investment became $1 million. And that set me on a path that's basically shaped my work in understanding manifestation, the power of visualization and different tools that relate to reality hacking over the last few years.
Gareth: [00:56:26] That's beautiful. That's a lovely story. The emotional attachment that went along with that ride is would take an entire evening, maybe half a bottle of brandy and sitting around a campfire to just explain the emotional attachment that I had to that money because I never had a plan. I had this money that I just put into this funny money and it seemed to be doing well. I was in it only for the gains. I fell in love with the community and the decentralized nature of the projects, but I never had a plan to take profit, not even to take out my 40,000 up front. And what seemed to happen is, as the the more the project started to grow, I got into this greedy place of like, if I take profit now my 40,000 doesn't, you know, double in the next day or two, as it was at the time when the market was going up so strongly in 2017 and early 2018. The end of that story is that the market came down. My million went down to like 250. I got super concerned. I thought it was going to disappear completely. I wasn't. I thought crypto was over. I, I was really hard on myself. I was really depressed. I should have been taking profit. I was guilt and shaming myself.
Gareth: [00:57:30] I sold at the bottom and yeah, I would be in a different financial position than I would at the moment had I not sold at the bottom. This is all to say that your financial plan is the most important part of this. There's no point in taking $1,000 and putting it into any cryptocurrency without knowing when you're going to get out and what your plan is for that money. Because unless you genuinely don't care and you say that now when you get in, but when 1000 goes to 10,000 and then comes back down to 200, that's a journey that's going to take a certain amount of emotional bandwidth from you and you need to be prepared for that. And so it leads me into this this analogy of the altcoins. As Rishi said, they need to have a everything in your portfolio needs to have a plan. And for me, it feels like getting involved in every time you say yes to an Altcoin, you essentially open up a tab on your browser. And the next time you buy another altcoin with another thousand dollars, you open up another tab and eventually you've got 20 tabs open and you have no idea what's happening with these projects. You can't keep track of them. Perhaps you're the the skillful trader that's got a very direct plan for each coin and you know exactly when you're going to take profit and if that's your jam, that is how I think you should run your portfolio if you choose to get into altcoins.
Gareth: [00:58:47] What I see most people doing is they're like, Oh, Dogecoin is going to the moon at the moment. I'll put five grand left over from my retirement in there. Dogecoin goes to the moon and then it comes all the way back down and there's just an emotional attachment at the same time that's happening with 20 other coins, and it becomes a massive emotional drain of what to do when the when the market's going up. You think you're amazing. When the market comes down, you guilt and shame yourself for not taking profit. So that's financial investment plan is is truly, truly important and it starts with your safety number which she spoke to knowing exactly how much money you need every single month, making sure that that number is covered and you've got a plan for that, and then a strategy to diversify into some some other investments. Crypto may be one of them and really nailed it. I think for most of us the right answer is buy bitcoin, but buy five grand now and puts $500 every single month into buying Bitcoin. Bitcoin over the last few years has done an average of 200% per year. There might be some bitcoins that are doing, you know, 400% per year or 500% per year.
Gareth: [00:59:54] And those same shitcoins go to zero a few months later. And so, yeah, unless you want to actively get involved in those projects, research them and trade them very, very specifically with a plan I would suggest can keep your life simple. There's something about saying no to projects. Bitcoin is a fucking beast. It's the most solid crypto crypto out there. It's the biggest in terms of market cap. It's doing amazing returns, buy and hold. Buy and hold, buy and hold, have an agreement that when the price gets to whatever you want the price to be, you take some profit out and you live with that. So that would be my my suggestion just to circle around what Rishi has already articulated there. So the last thing I want to well, the next question for Rishi, rather, is maybe you could unpack a little bit about what Defi is the defi space. When I took a look at this a few months ago, it again felt like opening up another browser window. If you're interested in this space, dive in, see what it's about. Again, if you're choosing to get into it, make sure that you have a plan for when you're going to get out and exactly what your strategy is going to be for it. But maybe you can talk about decentralized finance and the potential role that you see that playing in the future is.
Rishi: [01:01:04] Yeah. I agree with follow up, Gareth. Thank you for sharing your story. The importance of having a plan. It's absolutely important, and it really reminds us that we can live life a couple of ways. One of them is where nothing is intentional or we don't do anything intentional. And the other one is where we do everything with intention. And when we're thinking about cryptocurrencies and investing, we have to do it with intention. We need to know we can't be doing it blindly because. Unless you want to gamble your money away, then the smart thing is to do this with intention and do it with a plan. And developing that plan before you even pull the trigger is part of the strategy that I've integrated into my life, and it's worked out very well. And you know. The thing about Bitcoin and cryptocurrencies in general is that. The biggest gift that Bitcoin has been able to give me as time. Because I'm no longer chasing or I'm no longer in the rat race of trying to find an investment that's going to allow me to beat inflation, which anybody who has been in the investment game knows that that's kind of what we're all trying to achieve, is where can we store value and not have it? Depreciate and beat inflation. And what Bitcoin has allowed me to do is to unplug from that race where I'm constantly looking for the best investment.
Rishi: [01:02:48] I'm constantly looking for the best CD Which bank has the best rate? What credit card is the one that I need to get? It's all very time consuming and with Bitcoin seeing how it just year over year and with time just continues to grows and grows and grows. It's giving me time. I can now relax. I know that if I put my money into Bitcoin, it's going to grow and I don't need to do anything. I don't need to go looking for the best rate. I just need to buy a bitcoin and hold it. Just hold it. Just leave it alone. And I know that that's going to give me time now. This is the funny thing. It's a double edged sword, because if you use Bitcoin incorrectly, if we kind of think of Bitcoin as a tool, if we use the tool correctly, it'll give you time. But if you use the tool incorrectly, it'll take away your time. You know, constantly looking at charts, trading in and out or excessively, having to manage risk every single time that you buy another coin. Just like Gareth mentioned, it's like another tab. You have to come up with another plan and it's like so many things to keep track of and all of a sudden your personal projects start to get impacted. You no longer have time for your family, you no longer have time to your passion projects, etc., etc.
Rishi: [01:04:03] So be careful out there. Bitcoin can either give you time or take away your time. You decide. Defi is the most important. Application of smart contracts to date. Defi allows you to gain interest on your crypto. In. At a very high level. That's what Defi is. Defi stands for decentralized finance, and it's started with a way for. People to borrow and lend their crypto in a decentralized fashion, leveraging smart contracts. So what that basically means is that you go on a platform and let's say that you want to borrow one Bitcoin. Right now, all platforms require over collateralization of your crypto to be able to borrow crypto. So let's say that if you want to borrow one bitcoin, you actually have to deposit like 1.5 bitcoins to borrow one bitcoin, which is fine. But what decentralized finance allows you to do is that borrow crypto and lend crypto. So if you have crypto that you aren't using, then lend it out and gain some interest on your crypto. That's what Defi is. At a very high level. That's how it all started now. We have different applications of Defi. It's not only borrowing and lending, but there are different sub strategies of borrowing. There's now providing liquidity. There's all sorts of different applications in DEFI. But in summary, that's what we're talking about.
Rishi: [01:05:54] When we're talking about Defi. We're talking about borrowing and lending crypto. Now, the wonderful thing about this is that for long term holders or hodlers, which should be all of us, you know, if you have crypto. Just parked. Then you can leverage Defi to gain interest on your crypto. And that's very cool because you can get anywhere depending on the coin from 5 to 25% paid into the coin, whether it be Litecoin, Bitcoin, Ethereum, BnB, whatever it may be, and gain interest on crypto. And that's very, very cool. That's very, very cool because it allows you to increase. Your capital without doing anything. Now the really cool application here, which I really want to bring to everybody's attention, is a new trend called banking. More and more people are staking usdc and usdc as stablecoins because you can get up to 12% APR on safe platforms on your dollars. So what people are doing now is they're withdrawing everything altogether and they're going 100% crypto or close to 100% crypto. So let's kind of take it back to what I was saying about Ricci's pyramid of financial success. At the very bottom, we had the section that is like your daily expenses, and then at the middle you had your emergency fund. Now what if you consider your investments long term? But what if you take some of the money that you have in those categories and you actually just put it into crypto, not exposing yourself to volatility.
Rishi: [01:07:50] But just investing it in a stablecoin and gaining 12%. That's a whole lot more than your bank can offer. And there's a lot of people that are doing this now. They're taking their emergency fund money, converting it into a stablecoin, and then staking that stablecoin and getting 12% on their stablecoin. And the cool thing is, remember that capital gains taxes are only applied when you lose or when you gain on a trade. But if you're buying stablecoins, that's stable, so it's exempt from capital gains taxes. So how cool is that? Now be warned, there's still regulation probably upcoming in regards to DEFI, but right now it's fair game. So that's what a lot of people are doing right now and I think it's an amazing opportunity is to just go 100% crypto. Now you've got to know what you're doing. And like I mentioned before, let's walk before you can run. You need to easily be able to get in and out trying to avoid fees, determining what are the platforms that you best use. And now with Crypto.com and some other services, there's a lot of people that give crypto credit cards, so they really are going 100% crypto. All of their savings are in Stablecoins being staked, gaining 12%, and they have a credit card that uses crypto. So they're going 100% crypto.
Rishi: [01:09:19] They're, they're, they're unbanking. And this is going to be the new trend that is just going to continue and grow and grow and grow. So my invitation to everybody here is to, you know, really analyze whether that could be a reality for you. Because if. If it's something that interests you, it can definitely benefit you in the future. And as I mentioned before, we always need to contemplate risk, right? So just like there's defi decentralized finance, which happens on decentralized platforms where basically you have a wallet, you connect your wallet to the platform and it does the borrowing and lending for you without any form of KYC. There are other platforms that called CFI or centralized finance which do require a form of KYC, and they are less risky, but they have your personal information. So again, if you're going to take the plunge into DEFI, you need to determine what is your plan here, what do you want to do with it, what platform do you want to use? Because defi platforms have a whole lot more risk, but they have a whole lot more returns. See, fee platforms are less risky and also less returns. So again, what does that look like? Come up with a plan. Determine what type of risk you want to tolerate or you can tolerate and then execute. It always comes back to the plan, gentlemen.
Gareth: [01:10:50] So good, Rishi. So we have looked at what is money. We have looked at what Bitcoin has value and we've looked at the differences between Bitcoin and normal money. We've looked at some of the Bitcoin use cases. Perhaps what I'd like you to tackle next is how what is Bitcoin Beach? What is your experience there? And you said that you were buying purposes. And for those that don't know what that is, it's a it's a yeah, it's street food. It's something that's super cheap. How is it possible to be able to use Bitcoin to buy something cheap like street food where there's no transaction fees? I think what you need to touch on is the lightning network and what that essentially means and maybe just touch on without getting too technical, some of the challenges of using Bitcoin as as money rather than a store of value and how they're able to overcome that in Bitcoin Beach issue, maybe you can speak to two things privacy touching on KYC. Is there any way to be completely private? What are some of the risks with keeping money on exchanges? And perhaps you can also look at market cycles as a as an indication of wintertime profit. And when you take profit, what are the opportunities or the potential costs of paying capital gains tax, if you know anything about that?
Rishi: [01:12:16] All right, you guys. So let's talk about Lightning Network. Let's talk about Bitcoin Beach. Let's talk about adoption. So. At the stage where I'm at in my Bitcoin journey, my number one goal right now is adoption. I want people using crypto. I want you people using bitcoin because yes, the gains are fantastic. But. One of the main reasons why we still got to go through the dollar is because people don't accept crypto. But that problem is solved once they start to accept crypto. Once we can pay rent with our crypto also we can pay for goods and services with our crypto. Then we don't need to go through this cash out process. Right? So adoption is super, super important. And when I got to Lake Atitlan in Guatemala, I saw an opportunity in Sedona and San Marcos. There's a lot of people who, like me, are trying to kind of unplug from the system, trying to do my things my way, and having enough freedom to be able to do that. And so I started a community called Crypto Atitlan, whose purpose was to educate people on crypto, create a community and create a community that allows for peer to peer cash out and a community of support where we can all learn together. And I started doing these free workshops called Crypto and Kakao, which were all about onboarding people into crypto. We had different circles. It was really cool.
Rishi: [01:13:47] It talked about mostly introductory topics and then once enough people were knowledgeable. We started looking at, I guess, intermediate topics like trading limit orders, market orders, stop losses, other topics that have to do with crypto, more of an intermediate level. And we've had a couple of DEFI sessions as well, but it's been really, really interesting. Right now the crypto group is about 250 strong and the reason why I did this is for adoption. And the next step to that is Bitcoin Lake. And I want to talk about how I got there because, you know, as a leader in the community, I need to present a solution of adoption with my technical knowledge. I need to be able to come to the community and be like, This is what I think would work. And at that point in time it wasn't Bitcoin. Like, there's no way I'd be using Bitcoin to pay for goods and services. The fees are too high. So I was even considering different things. Like everyone needs to have a Binance account because Binance to Binance transactions are free. But it just didn't sit with me, you know? And so Peter MacCormack, who is a crypto celebrity, came down to Guatemala and we were able to arrange a meetup, a special meetup where he came and we were able to interview him. And he was so convinced that the way to go for adoption, to be able to pay for goods and services without having to worry about fees is through Lightning Network.
Rishi: [01:15:29] And I didn't buy it. I confronted him in the interview and I was like, This isn't going to work. Like, What are you talking about? And he was really convinced and he said, you know, at one point he said, you got to go to Bitcoin Beach. And so that's what I did. About two months after that interview, I went to Bitcoin Beach to see how it is that they were doing it and they're doing it with Bitcoin on the Lightning network. And the reason why I was kind of jaded with the Lightning network is because I've seen it develop from the beginning until what it is now like. It's been two years developing the lightning network, maybe even more. I think it's like four years. But when I first got my Hands On Lightning network, it was a pain in the ass. It was terrible user experience. It didn't make sense. The wallets were clunky and buggy. And so when they say Use Lightning Network, I was like, Hell no, I've used it before and it sucks. But now Lightning Network is a reality. And so I went to Bitcoin Beach and saw how they were doing it and they were doing Bitcoin transactions on the Lightning network. So on the next voice note, I'm going to talk a little bit about what is Lightning Network? So what is Lightning Network? Lightning network is a layer two solution that sits on top of the Bitcoin blockchain.
Rishi: [01:16:46] When I say layer two solution, it means that it's kind of a separate network that only taps into the Bitcoin blockchain when it needs to. So imagine, for example, that the Bitcoin blockchain, the main Bitcoin blockchain, are these big offices and the lightning network are these like little tellers that go into the office every once in a while to check how the ledger looks like and then goes out and does some transactions. And because this person is a little bit more mobile and agile than he's able to do these multiple transactions without any fees, and then once settlements need to occur, kind of goes back into the office and creates the settlements. The way it works for the technical crowd here is that what you're actually doing is that you're opening payment channels between multiple parties. So let's say, for example, that I often go to Starbucks and so on. The Lightning network where you would do is that you would create a payment channel between Starbucks and yourself. And the moment that you create the channel, you need to put a certain amount of Bitcoin into that channel. Let's say it's one Bitcoin under your name. So you open the channel, you put one Bitcoin in the channel, and that creates a Bitcoin transaction. The next step when you actually want to buy coffee with Starbucks in that channel, then you have one Bitcoin to spend and you can spend it as much as you want.
Rishi: [01:18:28] You can go and then buy some coffee and it's instantaneous and basically without fees and then maybe they need to reimburse you and so they give you back. But the amount of money that you can transact is the equivalent of one bitcoin. So sometimes it will go a little bit to Starbucks. Sometimes that'll come back to you and you'll have a series of transactions. It can be in an amount of transactions, and then at the end when you're like, Hey, you know what? I don't like Starbucks. Like, I'm moving to another country and I want to close the payment channel. Then all of those transactions, they kind of do the math and they settle and they create another transaction on the Bitcoin blockchain. So it's like one transaction to open the channel and another transaction to close the channel, and then everything that happens in between happens between those two parties and it's not on the blockchain. So that's kind of how it works. What Bitcoin Beach did was they created their own wallet on the lightning network. They started this, I think, two years ago, and they're doing it. You know, they came up with a good solution through their wallet to do these transactions that are peer to peer, basically without fees and really easy to use interface.
Rishi: [01:19:44] However, that wallet specifically has some limitations because of the way it was designed. It's designed only for El Salvador's. So to be able to get it, you need to have a Salvadorian number, etc.. So when I ask myself, what technology do I need to use if I want to implement this? In Lake Atitlan, I was lucky enough to find a wallet called Moon Moon and this is a lightning network compatible Bitcoin wallet. It's only Bitcoin that allows you to send money on the lightning network or on the Bitcoin network on the fly, which is really, really cool. So let's say, for example, that you send Bitcoin from an exchange into your moon wallet. When it sits in your moon wallet, it's like neither normal Bitcoin nor lightning network Bitcoin. But the moment that you actually have to send Bitcoin somewhere, whether it's on the lightning network or on the Bitcoin network, then it does the conversion on the fly, let's say, and everything. Basically no fees. The technology behind that wallet is insane and I've done some research on what they're doing is they're actually batching transactions and the fees are so low because they do leverage things like SegWit addresses. And without getting too technical, that's just a type of Bitcoin address that minimizes fees. And you know, it's a segwit address because the Bitcoin address starts with BCC one and.
Rishi: [01:21:23] And when I saw the moon wallet and I played around with it, I noticed how easy it was. And I saw right there and then that this is what I needed to do. And this is the technology that I needed to present to the community and Lake Atitlan to create Bitcoin Lake. Now, small little parentheses here because I want to make sure that there's no confusion. Bitcoin Beach is a program of social programs funded by Bitcoin. So Bitcoin Beach is all about the social aspect. It's all about social programs with the caveat that it's. That you can only donate using Bitcoin. So it's Bitcoin funded social programs. And what I want to do in Lake Atitlan through Bitcoin Lake is exactly the same thing. Social programs funded by Bitcoin and to be able to kind of implement those social programs, part of the umbrella of Bitcoin Lake, there is going to be a department dedicated into the education of Bitcoin using moon wallet, cash in and cash out, because that's something that locals absolutely need. And Bitcoin Beach facilitated that. And Bitcoin Lake will also facilitate that because businesses do need to convert it into sales. In my case in Guatemala or dollars in El Salvador to be able to pay for things. And so that same association facilitates this peer to peer cash out system. So it got me really excited about the future and I'm totally convinced that it has to be Bitcoin.
Rishi: [01:23:10] It has to be Bitcoin, it can't be Etherium, it can't be BnB. If I'm putting because of the volatility, because of the risk involved in the crypto space, the least risky coin is bitcoin. So if I'm going to be putting cryptocurrency in the hands of locals, it's going to be Bitcoin. You bet your ass it's going to be Bitcoin. It's not going to be anything else. I just wouldn't feel comfortable teaching other people about other cryptos, but I feel very comfortable teaching people about Bitcoin because I know that thing is going to last. Armageddon is. Okay. Let's talk privacy and KYC. Bitcoin transactions are not anonymous. Let me say that one more time. Bitcoin transactions are not anonymous. However, there are tools that allow you to hide some of the details about your transactions. I care very much about my privacy. As a libertarian, I don't like banks asking me questions about where I get my money, where my money is going. And I do believe taxation is theft. I don't like the government asking me questions either. And so since I started this journey, I've always paid a lot of attention into maintaining my privacy as much as possible. And Bitcoin transactions are not private. If you want complete privacy, that is complete privacy as to where the where the transactions are coming from, where they're going, etc.. Use Monero. Monero is the best privacy coin in the crypto space, but if you're using bitcoin and you want to protect your privacy, there are things that you can do.
Rishi: [01:25:00] For example, you can use tumblers, and what tumblers do is they kind of put your transaction and bash them with a bunch of other transactions to kind of confuse people about where the Bitcoin came from and where it's going and what amounts. But you got to be very careful if you want to be if you want to protect your privacy, you you want to make sure that you are submitting documentation only to exchanges that you trust. Try to use decentralized exchanges as much as possible because they don't require KYC. Whenever you send your passport or your driver's license to a company, they got your info. And anything you do within that, within their platform is subject to being exposed to the US government at any given time, should they be subpoenaed or or requested to do so? So this is why peer to peer transactions are so important. And this is why with crypto Atitlan at Lake Atitlan forming that community is such a it's so important because in that community it's actually a telegram group. But we'll have is we'll have people who would say, hey, you know, I want to sell $5,000 worth of crypto. You know, who wants to buy some crypto? I'll trade you my stablecoins for your physical dollars.
Rishi: [01:26:26] And when they do that transaction, no one knows. Like there's no way that that can be traced back to them. So it's an it's a really good and smart way to protect your privacy, do more peer to peer transactions. Absolutely. All right, let's talk market cycles and taking profit. So I want to dive into just a quick little analysis on the current state of Bitcoin right now. So for anyone following the Bitcoin price right now, I believe it's sitting around 47,000 went up to like 50, maybe even 51 on some exchanges came back down. So when we talk about market cycles, we're very much thinking macro. And to be able to do that type of analysis, it's really key that you start learning technical analysis and learning how to read candlestick charts. If you're going to be in crypto, you need to know how to read candlestick charts. And those candlestick charts for anybody who doesn't know are those charts where you see these red and green candles and they have lines and each one of those candles mean a different thing. And so the first step to understanding market cycles is learning how to read candlestick charts. And the more you zoom out, the more that you can actually see that even though predicting market cycles is very, very hard and recognizing tops and bottoms is very, very hard, you can actually, you know, be. Quite accurate in the sense of saying, hey, this is actually a good place where I can take profit because these market cycles happen and revolve around what's called the happening.
Rishi: [01:28:25] So every approximately every four years Bitcoin, the Bitcoin prize or the amount of Bitcoin that a miner receives for mining one Bitcoin gets halved. And right now it's at 6.25 and it happens approximately every four years. And right around where the happening occurs right after the harvesting occurs and a little bit before, usually bull markets start and then around halfway through like two years before the bear market starts usually. And this would be so much easier to show through some graphs. But what you can do is to, to I lost my train of thought there. What you can do is through candlestick chart analysis, you can start seeing some of these some of this seasonality, if you will, revolving around the happening. You know, and like we mentioned, taking profits is important. It's very important. And you've got to stick with your plan. So if you are going to be, quote unquote, a swing trader or if you're going to be like, hey, you know what, I will take profits long term, then set up those targets. Set up those targets early on. Take profit. It's important to take profit because Bitcoin dumps hard, cryptocurrency markets dump hard. And just like Gareth's story, you know, if he would have been able to sell a little bit, he would be in a different position right now, and so would I.
Rishi: [01:30:10] I was exactly the same as him, but this was part of our journey, you know, Gareth's journey, my journey. But you guys really don't need to go through that pain. Like, please allow me to teach you what I have learned over the years. And I can save you so much pain and I can save you so much heartache and so much, so many headaches. And we can talk about the different packages that I offer a little bit later for everybody in this group. I'll make sure to include a really heavy discount for all the brothers here who really want to change their lives and who really want to get into crypto. I have different packages that you guys can decide on. We'll talk about that a little bit more later. And then the last question has to do with capital gains taxes. So as far as taxation goes. Do you need to? Be very keen on what your strategy is going to be from the very beginning. Let's remember that taxation of declaring taxes is a voluntary exercise, and from the very beginning, you need to sit with how you feel about your fiscal strategy. I know some clients that they say, You know what, I never want to pay taxes and there's a strategy that can be developed for that. You know, and there's other people who say, you know what, I'm comfortable paying some taxes, you know, but let's do like a 5050 approach, you know, and that strategy can also work.
Rishi: [01:31:43] And there's another way where people want to be fully compliant. And that's a different strategy as well. But with capital gains taxes and with crypto just being so heavily monitored right now, it's a hot topic in the United States government and with the current president trying to. See how he's going to be paying for his different relief efforts. Then you're going to be you're going to be sure that more regulation is coming. So it's something that needs to be part of your financial plan. It's something that needs to be part of your crypto strategy is what are you going to do with taxes? And for anybody who is not in a state that have you or country that have you, heavily regulates crypto like myself as a Guatemalan, then you are golden. And as a matter of fact, it's it's funny because the crypto space is probably one of the few places in the world where being a US citizen is actually a disadvantage and a lot of projects won't even let you invest in them if you are a US citizen. Because so many people just don't want to deal with the headache of the SEC and all the regulation that they need to put in place just to accept U.S. citizens. Funny how that works, right?
Gareth: [01:33:09] Rishi. That was so good. Thank you for sharing that. And what I loved is how you articulate the strategy of taxation as being an integral part of your financial plan. Again, it's a very rich topic. It depends on where you live and it depends on what your model of the world is. But if you are looking out and seeing a world of traditional structures like banking systems and governments that are, if you believe, clearly misappropriating the funding that they receive through taxation, whether it's going to corruption or just not being used on the things that they promised, that it's going to be used for. The best way to be able to take the fuel out of that system is to stop sending energy money into that system. And so, yeah, I love your idea of three different plans and that being part of the strategy.
Rishi: [01:34:03] I'm here in Prague and I'm trying to pay for an experience using Airbnb with my credit card. But as we all know, a lot of these credit cards start to go through their fraud protection. And now I can't pay for the experience on using my credit card because it detected it as fraud, even though I told them that I was traveling. And now it seems like my card is locked and this is a common thing. This happens all the time. I have so many friends that they went to different parts of the world card get locked, gets locked. You know, you no longer have the opportunity to use that. Crypto fixes this, bitcoin fixes this. When you have your bitcoin, there's no one who can lock you out of your Bitcoin. You can use your Bitcoin however you want, whenever you want, and send to whomever you want. So I just wanted to one release a little bit of that frustration and to give you guys a little insight as to why crypto is so important and why adoption is so important.
Gareth: [01:35:05] Rishi I just want to speak into something rather you are doing in the world right now exactly what you need to be doing. I think I speak on behalf of all of the brothers that are getting to experience you. Explaining cryptocurrency in the most clear way I think I've ever heard it done before is a testament to not only your your passion on the subject, but also your ability to be able to deliver this. And yeah, brother, it's an honor to co-create with you. And I think I sent you a private message saying, Yeah, man, I just love being aligned with people that are fucking doing cool stuff. And yeah, I feel that in you. And I think as I said, everyone else feels it as well when you when you transmit what you're doing. So thank you for, for touching on all of those those points and explaining everything so clearly. I think your idea is an amazing one. And I loved what you said. It will require a little bit of coordination. And I was like in a predominantly male masculine, left handed, sorry, left brained world. I think all of us are like coordination. That's what we can do. So it's going to be beautiful to coordinate doing this.
Gareth: [01:36:15] Because yeah, our traditional financial systems are fact, they are completely broken, they're managed badly by too few people.
Gareth: [01:37:14] And yeah, you want to be able to pay for the stuff that you bought on the side of the road or the produce you got from the farmer's market right now with something that just works and yeah, it's secure and isn't managed by a government. And yeah, this is a really cool project and I'm really stoked about this application. So thanks. Also, I just want to talk into the last piece in your in your last message where you started talking about some of the very specific stuff about running it on the blue stacks. And yeah, obviously a very high level conversation. While I had no fucking clue what you're talking about, my nerd was pretty geeked out just listening to that. He was like some part of my Ned, he's my internal nerd was like, Whoa, listen to what these guys are talking about anyway. Rishi Thank you, brother. I'm going to press send here and then I'm going to go and create an invoice and send it to you. And I'll probably be back in at least an hour, less than an hour and let you know how that looks.
Rishi: [01:38:08] Hey. Thank you so much for your kind words. I receive, brother. I receive. Thank you so much. It's really an honor to be here. When I'm able to give my gift, I am the one who is realized and I think I was able to do that here. So to everybody here, you know, thank you so much for listening. I hope that you got some value out of these voice notes. You can probably tell the amount of passion I have about cryptocurrencies, about Bitcoin Lake and the projects that are to come. I'm going to need your support. I'm going to need your support when the time is right. Right now, Bitcoin link is under construction. At one point during my trip here, I'm going to sit down and actually design this, get it on paper, and when the time is right, I'm going to reach out and I am looking forward to your donations because these are meant these projects, these social programs are meant to help the people of Suna in San Marcos. And one of the key components of Bitcoin Lake is that it's going to be completely transparent as per blockchain philosophy. This is how it's supposed to be. When you donate money, you know exactly where it's going and it's going to be traced from the moment it's received to the moment there's an expense and you know exactly where it's going. So thank you so much for allowing me to be here. Gareth I think it's a great idea. Thank you so much for bringing these brothers together. I really appreciate it. And it's an honor to be here.
Rishi: [01:39:44] If any of you would like to work with me directly. Like I mentioned, I do have some options available, but you guys are just going to have to wait for me to finish my trip. I finish in October and right now I'm on full vacation mode. So I'm going to be coordinating with Gareth and I'm going to be sending those plan options to anybody that wants to work with me directly. Let's get you a cryptocurrency plan. Let's get you a financial plan. It needs to happen. And it's very specific to every single person. There is no one size fits all. Depends where you're banked. It depends if you're a dual citizen or not. What's your risk tolerance? What do you actually want to learn? Where do you want to invest? How much capital you have? There's a lot of variables and it needs to be on a one on one basis. So I will coordinate with Gareth. And for those of you who do want to work with me, just wait until October one, after you guys just to wait for a little bit. I really got to take advantage of the fact that I'm in Europe and I'm just in vacation mode. But as soon as we come back, it's going to be on it's going to be on like Donkey Kong. So it was a pleasure, everybody. Thank you so much for allowing me to be here. Gareth, thank you so much for putting this together and I will see you all on the flip side, please.