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A Conversation About Bitcoin

Updated: Apr 3

Bitcoin is once again dominating headlines and conversations, as the recent price of Bitcoin surpassed $40,000 for the first time. In an effort to educate and inform, I’ve asked a friend of mine to spend some time with me discussing this emerging asset class. One of the beautiful things about the internet is how it can connect financial professionals from all over the world. Even though I’m a financial advisor in Charlotte, NC; I can connect with experts all over the country. I wrote about bitcoin in the past, when the mania of 2017 was gripping investors. Today, this asset class still isn’t for everyone; however, we are all overdue in learning about crypto. This was a fun interview, and I hope to do more of these in the future.







Transcript:


Michael Baker

Hey, that’s why that’s why I’m a I’m a planner man I got to test these things and this isn’t a you know, it’s like my first day learning how to water ski. My dad just threw me in the water and said figure it out.


Guys, Tyrone, first of all, thank you for being on here. We got a good group of folks here that are that are attending from all different walks I know we’ve got you know, friends, clients, RIA owners on the call investment analysts and so you know, I know that you know this stuff cold and we could go in 15 different directions. But first, before we do that, we got to make the attorneys happy and just tell everybody that you know, Tyrone is not here giving us investment advice, nor am I giving investment advice or financial advice. This is purely for education. And you know, we hope that you know, Tyrone is going to share us what he calls free jewelry with us when it comes to Bitcoin and crypto and I want to introduce him properly.


He sent me his bio Tyrone for those of you who don’t know him or haven’t heard of him, he’s a CEO and co-founder of onramp invest. And he’s the founder of 401 STC, which is a storytelling consultancy, and that’s one of the things that has just made Tyrone stand out–his stories are phenomenal. He’s a graduate of Seton Hall University was also a 2004 Olympic Trials qualifier in track and field in the 400 meters. He’s crazy and he tells people that sprinting is fun, and it’s amazing. Don’t listen to that. He’s a rare breed. He was recognized by investment news 40, under 40, in 2019, and he’s a wealthmanagement.com top 10 advisor set to change the industry in 2019. Financialplanning.com has named him one of the 20 people who would change wealth management in 2020. And he was recently named as an Investopedia.com top 100 financial advisors. So the cred is real. It is earned. Tyrone, welcome. And thank you for joining us today.


Tyrone Ross Jr

Thank you for having me, man. And most important part of my bio, though, is that I’m the son of superhero parents. Nobody wants to hear that because my bio would be really short. But it’s the truth is not for them. I’m not here. So I’m blessed man, I’m happy to be here happy to you know, to spend some time with you and educate and just chop it up.


Michael Baker

I don’t know if you’ve got a place to start. But I have a great one, I have a great place to start. It’s a very simple question. One that you probably get on a daily basis when people ask you what you do. What is Bitcoin? Tyrone? You know, can you break that down? Because a lot of people think about Bitcoin in their own way. And so you as a CEO of onrampinvest.com if someone says hey, what Tell me what Bitcoin is? How would you answer that question?


Tyrone Ross Jr

It’s internet money. Okay, and the story. And now, as you start to learn about Bitcoin, it becomes something different through the lens that you’re looking through as a financial advisor is different than a data scientist and an engineer than someone who is unbanked, right, someone who is in a country with hyper inflated currency. It’s all these things. So let’s just get that out of the way.


Is it also is it a currency? Yes. Is it money? Yes. Is it a store of value? Not right now? will it be? Yes? Is it savings? technology? Yes. Is it digital gold? Right for the investment community, you had that conversation? But truly when you dig into bitcoin, right, and you look at it, it’s just simply money native to the internet, if you have one of these, and an internet connection, and you don’t even need those, you can go to a Bitcoin ATM. But if you have those things, you can transfer value across the internet, peer to peer, you know, third party, right? And if you look at the Internet, we had everything on the internet except for native currency or money on the internet.


And when you go below that, right, you have this monetary system that just allows for transfer of value. Right? Then you go a level deeper where I think people get really confused. I don’t say anything else. This is the money quote right here. There’s big “B” Bitcoin. That is the blockchain. That is revolutionary. That is the thing that I’m constantly fighting for, because that is digital social justice. In our arguable little “b” Bitcoin, which everybody cares about makes all the headlines is the actual coin token, whatever you want to call it, where the price changes, right? And everyone is trying to get access to and they’re only 21 million and we can get into all that. But just so people can understand, right? And I put this here for a reason, I hope I still have it. I don’t, but my copy of CryptoAssets, but it’s a really good book for everyone on here to read because it walks you through exactly what I said the actual blockchain and then walks you all the way through what Bitcoin is.


And then in that book, you’ll learn everything that has come after Bitcoin is somehow a derivative or inspired by it, like Ethereum, the blockchain ether, the coin, Ethereum, the folks who started Ethereum was actually a Bitcoiner, he looked, he’s like, well, maybe we can improve on this. And that’s what he did.


The name of the book is cryptoassets by Chris Berniske..a must read, by the way, if you are a financial advisor, right? I know, we like to keep books in our offices and all that other stuff. You need copies of cryptoassets in your office for this reason, one, I believe, and I know Don’t kill me, it’s heresy. But I believe that is going to be the Intelligent Investor of the crypto space one. Secondly, when the client comes in, and they say, what about this Bitcoin thing, or whatever you go, we’ll slide that book across the desk, and you say, I’m reading this, you should, too, let’s get educated together, it’s a really good resource. Every advisor should have that book, every advisor should have copies of that book in their office, I’ve been saying this for a really long time. Now one person has come back to me, it was like, Man, that was a horrible recommendation. So an hour an hour. And I want to segue into that. So just staying here, just think of Bitcoin as technology that allows peer to peer transfer of value on the internet. Right? Send dog photos, send value.


Michael Baker

Awesome. You know, one of the one of my favorite things that that you told me when we were talking about Bitcoin is that you said if I can explain it to you the first time and you get it, then I didn’t do a good job. Because it is, you know, complex, it’s simple and complex and is broad, and it can be narrow. And it you know, so many different things on it. But one of the things that I know, and one of the reasons I wanted to have you on to specifically talk about it is, you know, my role a lot as it as an advisor, one of the things that I’m constantly trying to do besides educate, is to keep people from blowing themselves up. And, and we saw just to give a little anecdote, we recently just saw this with GameStop, where there was some technical things going on behind the scenes.


But there were a lot of people piling into that stock, because for whatever reason, they just saw the price going up. One of the main concerns about Bitcoin, and as you would say, little B is people are watching that price and looking at it as somewhat of like a casino slot machine like, hey, if I hit it at the right time, I’m going to make lots of money. How would you coach young, you know, investors to be thinking about Bitcoin, as you know, an asset class or something that they need to consider as part of a portfolio but not the portfolio? If that makes sense.


Tyrone Ross Jr

Yeah, so I guess the compensation for advisors and in the compensation for individuals, I think are very different. The truth is this. And I’ve been saying this, even as a CEO, which is trying to make Bitcoin available to financial advisors in a compliant regulatory manner. requalify custody, billing reporting does not exist yet. Most financial advisors should not be doing anything for clients with Bitcoin, they should not you should be learning, you should be conversant. And I don’t care if you don’t like it, you should be conversant enough to say these are the reasons why we’re staying away from it. Right? Right. And if you are going to do something for a client, you should say, hey, these are the reasons that we feel like we can have conversations around it and maybe allocate your portfolio but here are the things that are there, right, all of these products that are out there and articulate clearly the fees, right.


So most financial advisors, I’m sure all of those on this call, do holistic, integrated financial planning, you will never lose a client over one asset. You help these clients retire, you help their kids go to college, you help them you know, move all these other things, they are working with you because again, if you are trusted fiduciary and keeping your best interests first, the best interest for you right now is for me to educate you on something that is I’m also learning all, but what I’ll do is I’ll bring in people to educate us, right, like you’re doing here. But most financial advisors shouldn’t be doing anything with this, which is why a lot of them want an ETF because then they can hide behind the fact that they know Bitcoin, because whoever whoever puts it out is going to say, oh, here’s this sheet, this tear sheet, and now you can act like you know, right. But most should be learning. And even on the retail side, GameStop was crazy. Go back to 2017. In the crypto space, I was on social media all the time getting people to relax, I couldn’t pick up a phone. It was crazy. Because again, well, should I invest in Bitcoin?

Well, first of all, you shouldn’t even be investing. Right? Let me ask you a whole bunch of other questions. It may not even be an investment for you. It’s not for most people. It’s a speculative asset. Let’s tell the truth. Right? People are speculating, right. So when you have these conversations, people go, Well, not what I was expecting for you. Well, no, you should have expected this from me because of all of the years and that I’ve spent learning about this. And being cautious about an approach, right is really important. So I think most people, and again, it’s still very early, it’s 12 years old, still very early, it’s not going anywhere. The more you learn, right, the more knowledge you get, I was sitting last night listening to the technical I listened to technical podcasts on Bitcoin just to continue to learn. I learn every day about it, there’s still so much to learn here. And even for me, personally, I look at it as a long dated call option on the store value. I don’t care about the price. But I also know that I’m privileged to have constant you know, conversations and access to education and resources that most people do not.


So I just try and keep people at arm’s length say hey, right. The whole thing is, people don’t buy more than what will cost you to go out to eat right? People like to say that right? What would you spend on a meal out? I don’t even say that. spend that money on a book, go buy crypto assets, go buy a Bitcoin standard, right? Listen to Andreas Antonopoulos. Right. Go follow some of the folks on Twitter some of not all follow some folks on Twitter read some of these newsletters that I get. There’s on the retail side. Here’s the other thing with financial advisors. Before Bitwise just put out a report three things financial advisors are concerned about still regulatory environment. Not really concern. Sec says not a security. CFTC says it’s a commodity. It’d be nice if those two guys together gave you something comprehensive. IRS says it is property, right. So you get into now we know that.


SEC just updated november 8 of last year. I won’t forget it because I was so happy. They said here’s an update for IRAs. On custody. You choose qualified custodian. When we audit you…when and if we audit you we expect you to say, what was the methodology behind use using this crypto custodian and deeming it qualified? Let us know. So all of these things are regulatory environment, what advisors could say we put out a piece of Bitcoin compliance guide, no ADV updates, these are all the things advisors should be doing practice management, setting up your practice to be able to have these conversations with clients. Well, Mr. Mrs. Jones, we did a risk tolerance right we use Riskalyze and you were a 15. Why are you asking me about Bitcoin now?


Michael Baker

Right?


Tyrone Ross Jr

So any client that walks in or any individual that walks in asking about Bitcoin, you reprofile immediately pull out investor policy statement out risk tolerance all over again, pull out their financial plan. Whoa, let’s start right here. Why is this important to you? Right? We we’ve done a plan, your goals are met? is it that right? All of a sudden, this is a conversation that you want to have? So again, and we all serve different demographics, some younger, some older retirees, different areas of the country, all these different things.


But at the end of the day, we still have to be fiduciaries best interests of the client first, all interest of the client that has to do with that advisor, right, not only with their assets, all things best interests of the client. So I think it’s very easy for a financial advisor if you really wanted to stay arm’s length. He or she right wanted to stay arm’s length with this conversation say, Mr. and Mrs. client, look, we’re being constructive about this. We know the prices, runaway risk adjusted returns 1, 5, 10 years best, we understand all of that. But based on what it is that we do for you.


Our goal is to keep you on track for your financial goals, not CNBC. Right. This is why you came to work with me. I’m learning you’re learning we will we will make this a part of our conversations moving forward. And as we start to learn, we feel like we Have a way to do this, that we could protect your downside that we can protect our interest of the firm, and so on and so forth. Right?


I had Josh Brown Oh, my On Purpose podcast. And the first thing he said was he goes, here’s what’s going to happen. He said, there’s going to be a financial advisor, this gets sued into the Stone Age, right? And it we’re all going to learn from that. And then people are gonna say, well, that’s the roadmap, we’re not going to do that. So you know, I just think conversation for investment advisors are different, you should have the conversation if you feel you’re educated enough to do so. Your ADV says so your you know, all of that is up to date, you have materials to show clients, all these other things, but just want to finish on this point.


So bitwise says, All right, regulatory environment, right? volatility, it’s young part of it, right? It’s just gonna, it’s going to be very volatile. Right. And the last thing was, and probably the most important was education. So advisors really don’t even know where to source the resources I do. But if it’s not things that advisors are comfortable going, Delphi Digital’s incredible, they put out best in class, institutional type research to any financial advisor would open and go, Whoa, coinmetrics, right?


These are all companies that financial advisors should know, not ready for primetime yet right to put these things together. And that’s what we’re working on to make sure all of this research and stuff is compact, and delivered to advisors in a way that they can use. And then for retail, again, the retail side of this space is way more robust in the institutional advisory wealth management side, the retail side of crypto is so good, it is so good. So good, because it’s been built out. And then for those of us who’ve been in this space, if you look at from the crash, right, it ended, I think it was early 18 until we just broke 20,000 not a shocker wasn’t a shock, we broke through 20,000, if you saw what was built, you’re like, it has to happen at some point, because of the advancements that were made. So again, if you look at everything that I just said, sounds like been really immersed in it. And it’s still used, I’m still really constructive about this. So someone is just walking in brand new should go as the deep end of the pool, I’m just gonna kick my feet here, right in the shallow end and figure out, you know, when the water gets warm enough for me to jump in.


Michael Baker

Absolutely. And for those of you guys listening, Tyrone is is pretty much single handedly responsible for me subscribing to a lot of those services and the content that they are producing is a it’s phenomenal. But be it is like drinking from a fire hydrant. I mean, you’re getting, you’re getting so much information. And so that was one of the things that I recognize as an advisor because I’m like, Man, these are the top people giving out information. What could potentially be out there just with the internet that people could be reading and believing. And so I wanted to go through Tyrone, if you don’t mind, just a kind of a few things that people shot over the bow that hey, this is something I’m interested in.


And one of the one of the big things was was regulation, a lot of people are concerned about, you know, regulation. Obviously, we have our fiat currency here with the US dollar. I even saw something today. I don’t know if you saw this, but I think visa is coming out with something in the crypto space. I haven’t read up on it. But I mean, all this stuff is coming. I feel like you know, the dam is just, you know, it’s going to break eventually and going to be digital solutions for everyone. So what do you see are the risks for like regulation as far as you know, people who who may have maybe owning some Bitcoin or have something in cold storage, meaning off like the internet in a wallet, or they’re on Coinbase or another app or a platform, but they’ve got this digital currency, right, but they want to you know, potentially use it, convert it to a fiat currency like US dollars. Do you see regulation being like a real risk for these folks where like the government’s just gonna like shut it down or start heavily regulating the space are what are your thoughts on that?


Tyrone Ross Jr

So a couple of things one, as far as the visa news goes, That’s huge I want to say a couple of weeks ago was the first now crypto bank qualified custodian they’re gonna just you know, visa is going to work with them to offer banking clients the ability to buy digital assets and Bitcoin that’s huge. And you’re going to start to see more news like that for sure as far as the regulatory environment goes right this year and the tax right front page at 1040 are going to ask you if you own it, so if you own it, tell them you own it, right somebody sneezed and said Bitcoin tell them you own it, own a Bitcoin t-shirt tell them you own it right.


So they want to know you own it and you should pay tax on it. Right. I understand that. My libertarian brothers and sisters are appreciate you but pay taxes. So we Want to pay tax on it? That’s the that’s the first thing. As far as the regulatory environment, I think what what is going to the government is not going to, I think it’s a small possibility that the government bans Bitcoin, they want their fair share. If you look at what the government has done, they’ve actually confiscated it, it turned around and sold some of it right. I’m certain they kept some. Right. If you look at what they’ve you know, what Biden’s administration you have some folks that are very crypto friendly.


Um, you know, you you look at some of the conversations that have been had about central bank, digital currencies, things like that. Here’s why in the US folks need to relax. Bitcoin is not a threat to the dollar. It’s not right, the dollars that you hit, the dollar is not going anywhere, right? Our government will make sure that right, Bitcoin is not going to replace the dollar, people need to stop that. What is going to happen, though, and you’re seeing that is it is not going away, and is going to be very pervasive of how it forces financial services to change, right? You hear me rant about this on Twitter all the time, we’re not expecting to have a real time payment system in this country until 2023 2024. That is disgusting. Right? You cannot tell me that Bitcoin being you know, permeating our financial services, space is not going to force that to come a lot quicker.


You’re starting to see it with fincen, some of the things that we’re saying around, you know, KYC, AML, and, you know, account and tracking wireless and all that stuff. So from that point, they want visibility on where this stuff is held. That’s coming, right, from a regulation standpoint, simply because they’re saying you owe tax on that. Right? Not because you’re going to go to jail or anything like that. So and I’ve had this conversation with Ron Carson, right. That was his concern, as well as like, my concern is that they’ll ban it, I’m like, well, let’s go through a couple of reasons why we know they’re not going to. Here’s the other thing is very important. When you look at what has happened with Facebook and Libra, if you look at, you know, a lot of the conversations now about digital currencies and blockchains. And all these other things, I think what you’re starting to realize is that our administration realizes that, Alright, here’s an opportunity to kind of jump in the fray here, because we’re way behind China, Russia, a few other countries with this, we got to get up to speed here.


And it’s also going to give us the opportunity to again, upgrade a lot of our infrastructure. Bitcoin is a small part of that. I do say if they ever felt Bitcoin was a threat to the dollar here it is gone. It’s not though, right? Not Not here. So I don’t feel like the regulation standpoint, overall, if you if you own it, they want to know pay taxes on it, right? That’s very important. The regulatory the regulatory side from financial advisors is a little different. But again, I think that’s very clear. There’s really not much left, even if you are series seven, right? The FINRA says, Let us know, tell us you own it. What are you doing with it? It’s with FINRA says sec said something, everyone has said what they needed to say this will evolve over time, right? And you still got a 401k space, they have to figure that out. There’s a lot here but everyone is really working to get this figured out. But it’s not going to be a situation we’re gonna round up everybody and say, give us a Bitcoin or you’re going to jail. It’s not that they’re gonna say, tell us you own it, we’re gonna tax the hell out of it. That’s what they’re gonna do.


Michael Baker

Absolutely. No, another question. You know, and this is one that that I’ve seen personally, and, you know, I waffled back and forth with it. But you know, back you know, 10–20 years ago, I mean, investment textbooks and, and thought leaders were, we’re never talking really about gold as being a currency anymore but more of a store of value. And and I’m starting to see more and more people talk about Bitcoin as being a potential store of value a digital store of value. I’ve even heard or read people talk about it, you know, as digital gold. What are what do you Where do you come down on that? I know you mentioned it, you know that we’re not there yet. So I just wanted to hear your your take on that as Bitcoin versus gold.


Tyrone Ross Jr

Right. And this is this is the The interesting thing about the first asset ever That is right, that is borderless, right is self sovereign and all these other things that it is different in Argentina than it is right in here in the States. Right. It’s different in Africa and it is here. It depends on where you are. So yeah, it is some places it is a store of value right now. Right. As for for right as my mother say, as for For me in our home, right as for here, the US store value conversation is a little right off. always digital gold, I get it. Here’s why the digital gold narrative is interesting. You go, all right, $91 trillion, right? Can you tell it you can tell I’ve been pitching on right now.


Michael Baker

just a little bit, you can talk about just a little bit.


Tyrone Ross Jr

Yeah, plus, plus, you know, four or 5 trillion in a whim. 91 trillion of assets advised on you have the whole you know, Asset Management space, sovereign wealth funds, whatever you talking trillions of dollars. Well, what’s the easiest way to get? Talk about gold, digital gold, so it’s relatable, right? It makes some sense where it has some similar properties for sure. And it’s something say what it’s a better goal set gold has been around, right? 1000s of years, but I get it, so it’s easier way.


And we all know this as human beings, human beings is something doesn’t make sense to me. The best way I can understand that is go this is like x. And then I can start to build a construct around and and get myself familiar with it. So if I want to get Paul Tudor Jones or Ray Dalio or Bill Miller or Stan Druckenmiller to get gold, okay, now I’m just uncorrelated. Now I’m listening, right? risk adjusted returns. Now I’m listening, right, you start to bring in all this common vernacular that large asset managers start to understand. And some of the most, you know, experienced savvy investors of all time.


That’s a very easy narrative to sell to them, right. It was almost a couple of years ago, when actually last year I was at the TD Link conference. And I did a presentation for financial advisors and before me, man, they ran out the cavalry of 1%. Just get off .01 percent Ric Edelman, they, they threw everybody a pot. It was a whole bunch of folks. And here I am talking to a roomful of financial advisors. And like they told you, you should put at least 1% in. did they tell you how, because you can’t, right?


But it’s easy to cut off 01 percent. It’s just you know, and they go and do all the Sharpe ratios and eight, right, and then you get advisors to listen because well, then that makes some sense 2 to 5% allocation looks like right, if you look at it, the ideal allocation, where are you pulling it from?


Where’s it go? Right? Do you take it from the equity sleeve? is it part of the alternates? so that’s what I’m saying you start you start to get an IV even now down where if you’re a financial planner, it’s a different conversation. And if you’re investment manager, Portfolio Manager type of advisor, so there’s so many facets to this, so I’m not in the digital gold camp yet. I know my fellow Bitcoin folks will kill me, but I’m not there yet. Right? Um, some folks again, even referred to as savings technology. Don’t know, good old piggy bank is savings technology, and go put something minute every week.


So there’s there’s still these narratives and things out there that people try and get to get people familiar with bitcoins, I can get you familiar with it, or something that relates to you, it’s easy for you to be you know, to relate to just put a punctuation on that point, I came to Bitcoin because I grew up in an unbanked home, I knew what it was like to not have money settle in and you get evicted or having to use the alternative financial system. And my friend said he was talking to me for months, right? You live two lives in crypto, one, when someone tells you about it, you go, that’s dumb. And then the second when you go, Oh my God, why didn’t I listen to them the first time, right?


So 2015 he’s beating me and I’m like, Man, this is the dumbest thing I’ve ever heard. And 2016 I never forget it. I was at Merrill, I had a break before really, you know, I’m really large meeting that I had. And he caught me at home and he goes download this app. It was called breadwallet. And he sent me something. And I got it instantly. And I said, Wait a minute. All I could think about was my childhood. It just as if my Do you know what this would have saved me so much trauma as a child. So I was like, Alright, I’m in I gotta learn about this. And he put me in a facebook group chat with some of the smartest people I’ve still ever been across in my life. I didn’t understand anything that they were saying. But I’m like, man, they’re giving each other some really crappy investment advice.


So like, there’s an opportunity here. So everyone is going to get it in their own perspective. And he knew how to get me. Let me send you some. And then when I saw it clear instantly, I’m like, this is it. Like this is the thing that’s going to free so many millions of Americans here to get overseas. Here. I had to pay attention, right. So and that’s what that’s You know, that’s the lens where I go with it. Right? It’s digital social justice, forget digital gold. It’s digital social justice. It’s it’s only an arguable use case. Nobody can argue that right? I think if we leaned more there I think folks can can it get an understanding? And I tweeted this morning, everyone talks about a Bitcoin ETF. You want a Bitcoin ETF? Put it in a thematic ESG fund, it’ll get approved next week. Right.


Michael Baker

But for social governance, right,


Tyrone Ross Jr

yeah, social got it. Absolutely. The social part of it is huge, right? And even when people go, Well, what about the environmental part? You scream environmental? That proves me you don’t know. Right? Because and I tagged a few of my minor friends and you get into the renewable peace you get into the you know, China and all that it’s safe and secure. The humanity aspect of it. It should be an ESG funds, for sure should be an ESG compensation. But that’s not what’s being marketed to people. It’s all it’s everything. You just it’s digital gold. Okay. Right. Like, what does that mean? Right?


Michael Baker

Which if you guys if you guys are listening, Tyrone, just he gave us so much there. But if you didn’t if you didn’t catch it, Tyrone used to be at Merrill. And that’s like Merrill Lynch. Right? Tyrone?


Tyrone Ross Jr

yeah, Merrill


Michael Baker

yeah, used to be at Merrill. So you know, Wall Street, Wall Street background. And now he’s like leading the charge, you know, with his own company, and advocating for, you know, this new digital asset that’s emerging. But one of the things that, to me has been probably one of the more intriguing and interesting arguments for, for cryptocurrency in general. But for Bitcoin, you know, Big B blockchain is what you talk about. And that is the access that it is giving folks that are unbanked or underbanked. And we here in the United States, we tend to have kind of a short interview even.


Because this is what we know, we’re not even thinking about other countries, but there are millions of families, you yourself, you know, you come from one of my childhood, we were unbanked and you come up and but now with people having smartphone and the technology cash app, I’ve seen I’ve seen PayPal square a lot of these digital payment platforms are making it where people can transact or use Bitcoin. And to me, that is huge. Because this is an entire cohort of people that don’t really participate in our capital markets in any way. And Bitcoin is giving them giving them access in so many different ways. And you touched on just real how, what a game changer, the real time payments would be for so many families, for so many families.


And I think we you know, for those of us, you know the word that is used a lot, I don’t like it, but I’ll use it because I think people will get it is the word privilege. But for those of us, you know, who are like privileged, just don’t think about that. If you stop and think about it, there’s so many families that like wow, like the stuff that I take for granted, they’re going to get access to and have access to now, it’s game, it’s game changing in that way alone, and then you start to add on all the other layers to it. To me, it just makes it fascinating to learn about.


Tyrone Ross Jr

Can I just stop you there for a second? I think this is very important, especially for all the white men in the room because I know white men feel like they’re under attack. privilege is not a bad thing. privilege is an amazing thing. And I hate to people a damning privilege, right? I have privilege as a six foot two black man in financial services. Do I lose some? Because I’m black? Yeah, but I’m a male. Imagine being a black woman. We all have privilege, right? beautiful part of privileges. When you say I have privilege here. I’m going to use it. I hate to people a damning privilege. And I also hate that there’s this attack on white men. Right? I’m not here without white men. Right? When it when I didn’t see black men, it was white men who said, Well, let me give you a really hard worker. Let me give you a shot.


Right. And we hit this point in this country now where we just oh is one thing and then we just lump them all right. I have privileged my parents used to drink hot water and go to bed. Right when when they fed me and my sister, right? Like my dad came to this country worked a job 40 years, not being able to read or write. His son is the CEO of a company who has privileged me. I can’t even talk to my parents about my mother’s like you pay what for? How much steak I can get for that. Like, I have wonderful privilege that my family my parents will never experience we need to stop damning privilege. It is a beautiful, wonderful thing that this country provides. And if we keep stripping that from people, then that that that truly takes away what it means to be an American Citizen we have privileged when we born here, but you know what? We can use our privilege to change the world. And that’s important. So let’s stop damaged privilege. There’s nothing wrong with privilege not a bad words of greatness.


Michael Baker

I will send people to see you and we’ll send them to the principal’s office if they do it now


Tyrone Ross Jr

I hate that it bothers me. That’s what I hate. Yeah, there’s a question here–you use the term self sovereign in your description, which I take to refer to the scarcity aspect of crypto. Can you address the fact that there seems to be no underlying asset backing this currency as opposed to stock or bond? So there’s a few things there so self sovereignty, meaning it’s a bearer asset, I could just take it and hold it right so similar to like GameStop right where everyone last week was owed exchanges and shit you can’t do that with Bitcoin.


I could take my Bitcoin offline and hold it myself writing become my own bank in the Bitcoin in the crypto economy you can’t do that I can’t take my apple and go you know write Bitcoin you could do that we’re sort of self sovereign part is just that I can I can become my own bank I could do whatever I want with my Bitcoin. So when you say that and then the other thing is a lot of people I said, Well, what is it backed by it is backed by math, cryptography, you know, data science, all of these things. Were and code right in math. So it’s, it’s the code can’t be changed. It’s written there. It’s stuck. So I think that’s really what it’s backed by it’s backed by the network. It’s backed by nodes and miners and all these other things that we won’t get into. So and that’s what I’m saying is like that, right there is clear like it’s, it’s starting to click but it hasn’t clicked. And I think when you start to really learn Bitcoin and understand it, you go, okay, right.


That’s that’s really good confusion there because it’s really not backed by what we would hope things to be right, discounted cash flows and all these things that we learn. So bringing a traditional mindset to Bitcoin, you got to change the lens right? If you look at Ray Dalio when he just put out this 14 piece missive, he started off by saying, I really don’t get it. My son does, but I think I kind of get it. It’s a really cool invention, right? Like, that was the most important porn part of what he said, it’s a really cool invention. And then he started to show in the corresponding pages that he didn’t understand it, because he was he was comparing it to stuff that it didn’t really write. But he was like, really cool invention. I think it could be digital gold right there. That is again, but he really doesn’t understand it yet. He comes to write Howard Marks my favorite investor, he kind of did the same thing in his last paper. He was kind of like I still, but I can’t ignore it. But you know, so. Because there again, think about it. 30 4050 years in this business, and you use that fundamental values and intrinsic value and all these other things. And now here comes something that you’re just telling me was, and there’s this guy who started and and just left, like what is you know, but as you really start to dig into the code, and the cryptography and how it all works, and the math behind it, it’s, it’s pretty unique and impressive.


Michael Baker

Oh, Tyrone, how are you doing on time? Because I’m looking at the clock here.


Tyrone Ross Jr

When we got an hour, right, yeah,


Michael Baker

I’m looking at like, maybe 15, you know, 15 more minutes. And so that’s for everybody. That’s, that’s on the webinar with us. We got him for just a little bit longer. If you have a question that you would like him over address, shoot them over. And we’ll keep the conversation rolling, but we want to try to address your questions. But one of the things that I wanted to, you know, Tyrone you to just talk about is, is helping people understand a couple of what we call just little technical details that once you get it you kind of understand, but there’s a there’s a difference between someone like opening up an app and you know, being able to, you know, transact and buy bitcoin. And we say that and one is one of the questions that was given was, is Bitcoin actually divisible on I know that it is and so I’ll let you talk about what a Satoshi is. And then to cold storage and a wallet and private keys and how you could really mess yourself up if you don’t know what you’re doing with that. And so what you know, take it away as far as you know, how do people you know that retail wise you know, there’s a platforms are abundant now, how did you know how do they do it? And then how do they make sure that they’re, you know, protecting themselves and they have backups for themselves?


Tyrone Ross Jr

Alright, so there’s there’s a lot here and again, this is you can’t do this in 15 minutes, but high level high level Yeah, so really important. So there’s there will only ever be 21 million Bitcoin, the last Bitcoin will be mined in 2140. Right? Is it the visible yes into these things? Like I’ve stopped saying, Can I give my two cents I say my two satoshis right. So it two to eight places right? You have satoshis where you can, um you know, there are folks there’s, there’s something called a lightning network where you can pay with satoshis.


And you can buy coffee or whatever else not advised because every one of those transactions are taxable. So yes, you can an actual Bitcoin is divisible into satoshis. So one of the things that’s really important with that the for folks to understand is, one you can buy a piece of a Bitcoin, right, you can buy one piece and that goes into by the easiest way that I believe to buy bitcoin right now, which you will find very easy is to go into cash app and buy it right I heard PayPal, these PayPal experience is pretty good. But very, very easy to do it. What then when you go to a provider, like PayPal or cash app does is they say we’re going to take all of the tech out of it. Similar to what we’re trying to do for financial advisors, just make it easy, right in your workflow.


You don’t have to go to all these weird right places and funds and over the counter and Pink Sheets, right, we’re just going to make it right in your workflow, click click, click, boom, done, model planet, Bill, whatever. So if I go to cash out packages by cash app is going to put that in storage for me, right there going to hold it secure, and cold storage. Cold Storage just simply means offline. That is the safest way to hold it. Right? And again, keeping this very, very basic. Hot, meaning that it’s still online that is at when you see what a Bitcoin was hacked. No, it wasn’t an exchange was hacked. Because if you leave your coins at exchanges, like a coin base, right, they put theirs in cold storage as well. But there’s some that are hot, there’s some that are cold, you don’t get to choose that.


So when you go to say RA, and again, there’s a process to this, we say all right, I know enough, where I feel like I can take my Bitcoin off of Coinbase and putting on and I think I may have one here, right? I think I do. Right? on a device. Right? Um, a hardware wallet as they call them treasure ledger. Right. Ledger’s is one that I’m that I’m fine. I’m going to take that Bitcoin off, I’m going to put that on our hardware wallet, where I’m just going to put it there. Now, again, goals has a lot to do with this. Right? If it’s you like I don’t care about the price. 25 years is offline, I want to make it safe or secure. I’m going to put it on this device and put this device somewhere safe.


There is a very technical process to that with mnemonic seed phrases, your public versus your private key, your private key, think of your private key as you’re checking your credit card number on the front there like that. That’s you just blow that off. Right? Think of doing any transaction online. You can’t submit that until they say well what’s the CVV number and you got to flip it over and then you give them that number? It won’t work until then. That’s your private key. And the private key right public key and private key are just the things that are used to communicate on the blockchain right. And the private key is basically your signature on that transaction.


It won’t happen until you sign it you got to sign it so it’ll say all right Tyrone wants to send Michael money through our public keys All right, great. We don’t need I don’t need to know right Michael’s religion what he ate yesterday don’t need to know Tyrone anything about that. Just know that he has Bitcoin. I have Bitcoin, we want to make a transaction. It’ll check the amount and his they call them utxos unspent transaction outputs, right. I have a certain amount of utxos we swap when there’s the blockchain says Oh, that’s a good transaction. Now, his private key and my private key sign done, confirmed we walk away don’t have to know anything about him. That’s what makes it so interesting and powerful. So that’s that part. Last thing here is when you do go through the process of that seed phrase and all those other things if you lose that your bitcoins gone forever vamoose. I will give you a personal example. Not with Bitcoin but with ether. I had $75,000 of ether. gone by by, right. And it’s I can see it. I’m staring at it. I have my public key, right. I can show you in my phone, right? I see the balance, right, but I can’t sign it to get in and they keep asking me for my public key. I switch phones. I did a whole bunch of stuff. And this was years ago. And now when I went back in just to check it because I’m like, Oh, I want to move this east to you know, I want to combine the East that I have. I can’t get in. It’s gone. By Forever, right? Because I can’t find the public key I put in the phrase, I don’t have the public key.


So anyway, this is proof positive, someone that has been in the space since 2016. of that happening, too. So it’s, what you learn is you get that phrase, they tell you to write it down on paper again, it’s so funny how they’re like, oh, new tech, new technology, but go back to old technology. Right, right. And oh, pirates. Should digital assets. So you have that phrase, you have your public key, you put that somewhere. So now when that happens, because there’s no Hey, can we get Satoshi, you know, customer service owner and getting that, right, it’s gone. So you want to make sure that you write these phrases down. Everything you have secure. Now, there are other there’s companies now that have taken this away? Well, they do all of that for you. Here’s the other thing, which I think is very interesting.


Coming to financial services very soon, especially the RA is if I’m a billion dollar RA, I probably don’t custody, all of my assets at one custodian. You Schwab, I use purging, I use fidelity. Multi signature means that my Bitcoin can’t move. Unless there’s more than one signature, there’s three of five, there’s five of seven, right? few folks have to sign before Bitcoin moves. So that could be me. Financial Advisors, no, but I trust an estate attorney and my Barber, right, they have to sign in order for my Bitcoin to move. So if I lose one, at least they have, you know, some mothers, right? This is good for estate planning and things like that. Multi signature is going to be huge for financial advisors along with some other things, when it comes to custody and things like that. What is also very interesting, and again, while I’m here, I think it’s very important, I just said this to the very large RA I was talking to you before this decentralized custody is going to become a thing to atomic swaps. Right, good way to end the meeting when you bring up atomic swaps. But I say all that to say for this is going to take all of that clunkiness away where in an atomic swap is going to say you’re going to face all of your counterparties when you trade, right, you’re going to see all the liquidity you see everything right and you’ll see Bob has x amount of Bitcoin and then he wants to give it to Nancy who has x amount of shares of Tesla swap instantaneously done in her account in his done set, right like this exists right now. This technology exists right now, that’s going to be a boon to ra especially we look at ra custody.


Again, instill sentiment, safekeeping, security of assets, things like that, you know, t plus two is Robin Hood, trying to cry now get out of here with that, right? So it’s gonna solve a lot of problems, but it’s going to take a lot of that having to actually put in the key, right and make sure that those assets transfer so I know I gave you a lot there. But there’s a lot of tech Enos that goes on behind this, but it’s why I encourage most people, your cash apps, your coin bases, leave your stuff there to you’re very comfortable, you can walk through it. Financial Advisors don’t help clients do this, right. Like, it’s really important to understand that and here’s a good point to that. I had an advisor and Karolina call me and he said, Tyrone, I have a client he owns Bitcoin and he actually sent me his Bitcoin and I’m like, Oh, this is a scam. Right? He’s like, I was like your client got scammed the actual Bitcoin like, and but there was a point 2000 2013 so when they were auctioning these off, they were actually giving people bitcoins, it’s real thing. The client actually has the, I believe, which I think was the public key. I was like, well, you gotta go back to where did he buy it? There should be a lot more information. And he goes, Yeah, I’m like, Yeah, I was like, if it’s if not, then he got scammed. But turns out the client had all of that other information to private key to see for all these things, I was like, Alright, now you got to open an account and try and get that Bitcoin into you know, getting into account and then wallet rather, right. So he can now you know, recognize it and then safekeeping and things like that, but the actual copper Bitcoin


Michael Baker

Oh, man, but this is this has been a fantastic conversation and one of the things that that, that I that I’ve thought about and, you know, I’ve tried to, you know, think about is, especially as I don’t want to, you know, tell someone what they should do or shouldn’t do, I just want to try to help educate you know, especially with something like this. And so that’s why you know, I wanted to have you know, I’m grateful to you, sir, for being willing to take a few minutes out of your day and share some you know, share some of your insights with us. Any any parting thoughts you have, you have for the group as far as as far as Bitcoin How can people find you if They want to follow you on social media, what’s the best place to like, you know, look you up and keep track on what you’re doing.


Tyrone Ross Jr

I won’t waste time on that. But I will spend this time with something that’s most important. One in four children in this country go to bed hungry every night. That bothers me. I was one of those kids in the lunch line that didn’t have lunch money. So if you guys can, and you want to talk about using privilege, Michael, I told him, if I’m going to do this, I don’t want any money. But if you can make a donation and No Kid Hungry, I would really appreciate it. That’s using privilege. It’s amazing.


So what would make my heart joyful? I don’t care if it’s 50 cents 50 million, don’t care if you can go to nokidhungry.org and help me I have no affiliation with them. I’ve just been that child, I am dumb enough to wake up every morning and believe that I’m going to cure child poverty in this country. Out of all the different groups of people in this country to live in poverty, the children of this country live in poverty more than anyone else. That is abhorrent that we are all acceptable with that, that the greatest group living in poverty in this country, our are our children, I have a responsibility to fix that. And I would love you guys help. I’m grateful to you for what you’ve done. You can look me up, I’m not going to spend time on that this is not about me.


It’s about changing the world. And making sure that a child that I know went to bed hungry last night doesn’t go to bed hungry tonight. So I’m grateful for you, man, incredibly grateful. Thank you for all you do. Thank you for being an advocate. Thank you for everybody that tuned in and incredibly grateful. And I would just again, we are at a time in our country now where we need healing. And we need to be understanding of different views different perspective, we need to have civil discourse, we need to take care of our fellow man regardless of party, regardless of color, regardless of where they live, regardless of what they’ve gone through. We all better than the worst thing we’ve ever done. So I would just keep that in mind. give people the grace you would expect. And I think if we do that we will heal together as a country and we can’t rely on any government, any president anybody to do it. It’s going to be American to American person to person, but we got to start with making sure our children are fed. I appreciate you my man.


Michael Baker

Hey, you guys. I told you he was phenomenal. Tyrone, thank you so much, man, hop off here. I’ll close everything up. And we appreciate you brother.


Tyrone Ross Jr

I appreciate you love and light to everybody be well. Absolutely.


Michael Baker

Thanks, buddy. Everybody, thank you for you know for sticking around. I told you Tyrone, he’s awesome. He could have kept going for another you know, two hours on Bitcoin. There’s so much to cover. If we can, we will try to get him back again. He’s working on some big things right now. And so thank you for taking a few minutes out of your day. If you’ve got any questions, or things that we didn’t answer, I can get some answers to you. I had a little bit of a tech problem with the chat but I saw some questions come across feel free to email me And if you like this, we got more coming. I’m working on a guest speaker for March as well. So thank you for tuning in. And we’ll see you on the next one. Take care.


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