Understanding the Importance of Cryptocurrencies with Nicholas Merten — Transcript

Nye

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Evolvement: The Financial Podcast

42 min readJan 20, 2019

This is a transcript of the Podcast — Understanding the Importance of Cryptocurrencies with Nicholas Merten — You can listen the audio here

N: What is going on everybody what is going on, as always it is your boy Nye and today we are on another episode of the Evolvement podcast where we talk about Bitcoin, cryptocurrency and the future of our financial system. I’ve got a super special guest today, Nicholas Merton he runs Datadash YouTube channel, I think he is the largest YouTuber in the cryptocurrency space and yeah man welcome to, welcome to the show.

NM: Hey thanks for having me Michael really appreciate talking to you, it’s been a while I guess since we last talked back in Bangkok, at the what was it, the Hybrid Block Summit.

N: Yeah man Hybrid Block was were we first met, and dude to be honest I had watched a few of your YouTube videos, I wasn’t super familiar with you at the time. But when we met I was just beyond impressed with you dude, like your fucking one of the smartest people. Definitely one of the most knowledgeable people that I come around in the space so far, and yeah I am just super stoked to kinda just jump on the chat and have a little conversation with you about this stuff.

NM: Hey man I appreciate it, I had a great time on the panel that we spoke on back there, it was kind off a setting. I think we had done a recording with Michael or Boxmining, another one of the YouTubers. We had a great conversation between the three of us, but yeah maybe we can recollect on some of those points and just keep going forward and talk about all kinds of interesting things going on, there’s a lot going on in crypto

01:47 | 55:17

N: Dude there’s a lot there’s a lot happening right now, I’m kinda interested, actually before we get into what’s going on right now I’m kind of interested to hear a little bit more of your story man, like how did you even get started in this cryptocurrency stuff. Cos I think I remember we were talking about your YouTube channel and it was mostly going to be technology-focused until you came across crypto, am I right about that?

NM: Yeah so I have an interesting story, so the YouTube channel which I’ll get to in a minute, was kind of unintentional but my knowledge of Bitcoin as a brand was all the way back since 2011, so I come less from a technology background from more of financial background. I was very fascinated back in 2011 with learning about central banks, learning about the recession in 2008.

But also just understanding how monetary policy works and central banking and all that. So you kinda go down the Rabbit Hole. And I kept on researching, and I got to this point where I was on YouTube watching all these documentaries, and then lo and behold some video called ‘what is Bitcoin’ comes up, and I thinking ok that’s interesting I’ll click on it.

And I watched it and it was about 2 or 3 minute animated video, at the time it had no views, Bitcoin was $3 at the time no one really knew about it. And I watched this video and it was talking about decentralized peer-to-peer currency. And I was like this sounds really fascinating, but I was really kind of thrown back as I was when I tried to learn programming, by all the crazy terminology that you hear, such as blockchain and mining, in this case of crypto and I was like ok I don’t get what this is.

So from there on I kind of sidetracked it for a while, I was investing in equities for some time and then later down the road I started to learn, you know see Bitcoin in the headlines, Bitcoin going up to $100, Bitcoin going to $1000, the Silk Road was becoming a hot topic in the media.

And then obviously Mt Gox happened, you know prices plummeted.

I was just kinda like ah yep ‘see I knew it was kind of a bubble in that case’ because back then when I first saw it, instead of reading the white paper which I should have done and what every single person should do when there’s a new technology they find. Instead I was a trader at the time, and I went to go see what people were paying for it, and I was like who in their right mind would pay $3 for some digital coin right. It’s the ironic story that everyone tends to have, I just didn’t get it at the time.

But if I would have known how powerful it was or at least a message that it was sending, and the technology, I think I would have completely gotten it.

But years later around 2016, it was about mid Midway through 2016, towards the fall of 2016. I read into the Bitcoin white paper, and after about two or three reads it was like a slap across the face, that’s the analogy that I use because it literally through me back.

And I wasn’t upset as I think a lot of people have been about, Oh I didn’t get to invest in Bitcoin. No I don’t mind that, because there’s a lot of missed opportunities you’ll experience while trading or investing. I was in upset that the thing I was looking for this whole time, as kind of a kick back against the central banking system was there all along. For all those years.

So I knew that I had to keep looking into it, and it wasn’t like a job for me it was a fascination, it was a passion of mine. And really kind of a hobby from the time that I had outside of my education, and low and behold long story short I was going to a college in 2016, but I ended up dropping out, I went to another program called Praxis which is kind of an alternative education program, that long story short got me a job in Silicon Valley where I was working at a really awesome tech startup, and also lead me to creating my YouTube channel.

And again the YouTube channel was not meant as your, as you were alluding to, to be about cryptocurrencies, It was actually supposed to be about data analytics, and if people don’t believe it they can go all the way back, they can look at my videos. I did a SQL and data analytics tutorial.

And Id used YouTube for 11 years, but every time I’d always stepped into it thinking I’m going to do something specific with it, and low and behold I did 2 videos where I was like, you know like I want to kind of express that I know how to use data and analytics outside of just my tutorial. So I did 2 videos covering cryptocurrencies. Now bear in mind this was just for employers, this whole project that I was building was before I got my internship. And I wanted to attract potential employers.

I never thought anyone would watch these, but after the second video I saw that it got like 100 views in the first day, and I had no subscribers, I had no traction before and I was like, this is something, I need to keep going with this, maybe I have something here.

And I kept going at it, and you know to keep myself for a rambling on about it longer, it grew to being one of the largest, I think it actually is the largest cryptocurrency YouTube channel. I’m very humbled by that because I love financial markets, and for years I never would have thought people would want to listen to me talk about it.

N: Thats awesome man, congratulations, I mean I like listening to you talk about it you know what I mean, I like listening to you. I listen to people talk about it all day and I like it when you’re talking about it, so I dig it.

What was the thing that clicked for you, you know. Because I think that in terms of understanding the value that Bitcoin has on the economic models, on the financial systems of the world. It requires a certain level of insight into how those models are currently working, how they worked in the past, and how we got to this point. And then having also a certain level of foreseeing of what could happen in multiple different scenarios in the future, if things play out in terms of x y or z. So I’m kind of curious, I guess two-part question.

0:7:15 | 55:17

N: 1: What did you see when you were reading the Bitcoin white paper for two or three times, or whatever it was, that it really clicked for you?

and then 2: How does your knowledge of the financial systems, how they work now, how they worked in the past, how we got to this point. How does that all play into that moment where it clicked?

NM: Yeah, I think actually those two questions can kind of be combined, because to see the value in Bitcoin you have to understand monetary history, and that’s not just oh decentralization, oh you know a peer-to-peer, getting away from the government or central authorities or central banks. It has a lot to do with understanding what Bitcoin sets as a precedent, so not only did Bitcoin on a surface level,l you know this is why banks were some of the earliest innovators in blockchain or patented technology.

Bitcoin and cryptocurrency as in blockchain, start to pave the way for a much better system of wiring money across the worlds. I’ve known about the inefficiencies of Swift for a while, I knew just how painstaking it was, just to try and send money, even in the United States to another client or business. But to send it internationally as well, I mean through remittance payment, like you know international movements of money through financial institutions. It’s an absolute pain and the fees get ridiculous.

So that was one business application I saw, but that was really just the start of it.

I later began to realize that Bitcoin set a precedent in regards to the idea of a fixed monetary policy, so if you think about Bitcoin specifically, Bitcoin has 21 million coins. And a lot of people say oh you know a deflationary currency isn’t good, and I’m not even here to argue if a deflationary currency is good vs an inflationary one.

But what it states is that this is a fixed monetary policy. You know maybe the miners could change the coin supply over time, I can bet you a good amount they will not.

And in that sense, you’ve got a decentralized cryptocurrency that is not controlled really by any major central authority, and it has a fixed monetary policy.

And that may not seem like something valuable to us in the west, people in say the United States or Europe, but it does for people in emerging markets.

And this is something that you know, going onto your second question, what does it mean for the longer term of things. It is going to be a dramatic change, when we start to see cryptocurrencies being used in emerging markets. A poster child for this right now is Venezuela, Venezuela right now has, not only a corrupt government, it has geopolitical issues, but it also has hyperinflation, right. It is the prime suspect in South America right now dealing with these issues. And with that, it sets it in a position where it needs something that is a store of value, that people can transact without the approval of government, without the payment gateways that currently exist in Venezuela. They’re very inefficient, they shut down a lot.

And they also, it’s not just everyday people who need this, businesses need a store of value, if they’re selling you a good or service they need to know that the cash that they’re getting, or the store of value that is being transmitted for that good or service is going to retain its value.

And that’s why in Venezuela Dash has been extremely successful, Dash is just one of many currencies, Bitcoin as well is getting adopted, and we’re starting to see merchants actually prefer cryptocurrencies to actual Venezuelan Bolivar currency.

So I think that starts to send signals and it shows that there is a value proposition.

N: Yeah I mean, I think you’re obviously 100% on point there.

I read, I’m sure you read it as well or at least you saw it, the Times article that was literally talking about why we need Bitcoin, or why Bitcoin is relevant for freedom.

And it just touches on exactly the same things that you’re talking about there with Venezuela, with a couple of other countries that are facing other issues in their monetary systems.

But how does this like, we’re in the US man. Obviously for someone who’s educated we can see that there are very large financial issues, in terms of the Federal Reserve and other monetary policies that have been building for a long time now.

11:30 | 55:17

N: But for like the average person who doesn’t know anything about this stuff, they’re going to look and they’re going to say ok, I’d much rather have my Fiat currency, I’d much rather have my US dollar than I would have some Bitcoin. It might not make sense to them, they might not think that they can be affected, they don’t think that what’s going on in Venezuela could affect them, or that something similar could happen in the US. Do you have thoughts or opinion on that?

NM: Yeah, so in the short term it makes absolute sense, I mean a lot of people what I find, a lot of the people who invested in the crypto in the west there’s almost, and I hate to use this term buts it’s kind of a virtue signal in a sense — ‘We need to bring about adoption in the crypto space, we need to go spend our cryptocurrency to actually stimulate economic activity with it’.

I say that’s ridiculous, no one in the west who in their right mind has the ability to take an income in Fiat currency and invest some into crypto would spend their crypto, because crypto is a very early market. If you understand the potential of this, you would be holding as much as you can. That being realised though, it’s speaks to a point here. We have a stable currency, we have the strongest currency in the world, the dollar in this case. And if you’re in Europe you have the second largest currency the Euro, which is actually tethering for that first place position.

So that being realized you’ve got two very strong currencies in the west, you’ve got for example a very robust banking system, as much as I am a critic of it, there are a lot of flaws in it, but you know what it is no where near the issues that other countries are facing right now. Argentina continues to face over and over again, that Venezuela’s going through right now, that again South American countries and a variety of other economies throughout the continent of Africa and Asia deal with, on a regular basis every few decades.

We don’t deal with those kind of issues, so we’re very fortunate. Realizing that though as you mentioned, some people believe that it cannot happen to the United States.

And I believe that going into the next decade through 2020 to 2030 that’s not going to be the case. There is a lot of issues right now brewing in emerging markets, and the world is so interconnected right now where as previously, Contagion which is a term used when basically one currency or one economy falls within emerging markets the rest do.

I believe this is going to spread even larger, we’re not only going to see these first tipping points in South America and countries for example like Turkey, that are dealing with currency instability tethering out into other nations.

But along with that it’s going to hit in developing economies as well, because you’re not just dealing with a corrupt leaders like in Venezuela, you’re dealing with economic factors like a housing bubble. I mean take a look at some of the prices for properties across the world, and understand why they’ve gone up, but at the same time how ridiculous things are.

The value of equities across the world right now, going through serious sell offs. I’ve been talking about how since 2018 I’ve been on the fence about this, I’ve started to be from a bull to a bear, and everything is starting to come to fruition.

It’s not going to be very sharp and direct like 2008 but it is going to have a weighing effect on us, it is going to be the bursting of the everything bubble, over a longer period of time as I stated from 2020 to 2030.

And when you have that, when things get bad enough, when it starts to hit developing economies, you get instabilities in the dollar, you get instability in Europe.

And I have no doubt you’re going to see not only attempts at bailouts for banks, but they’re going to have what’s known as bail in’s where is, if banks can’t get bailed out by the government they going to take away some of your savings.

And then that’s when people are going to learn that they cannot trust the government, when they cannot continue to have their money in a system they don’t have control over, or they don’t know the rules of the game. Because they could change in an instant. Now again this is very long-term down the road, as I’ve stated the current moment we are AOK in the west right now, we are in a luxurious position compared to other people.

But I’d say not to doubt that the same things can happen to our currency, because our currency operates on the same metrics that the Venezuelan Bolivar does, that the Argentinian Peso does, that the Chinese Yuan does, and the Euro. They’re all paper money that operate on the same monetary principles, it’s just a matter of which one can hold up it’s strength.

N: Yeah I mean, I think this is where things get really interesting for me Nick, because we look at our current financial systems, we look at our current financial models and we see the technology that already exists around the world, and we can see the fact that we’re not living in the Stone Ages anymore right. We have a certain level of connectivity and a certain level of information.

You know I don’t have to send a piece of mail to you and you’re not going to get my note in a week or two or three weeks or a month, and be able to make a reaction. I can send you a text message, I can send you an email and we can create communication there. It seems like technology has advanced very very quickly over the last 20/30 years. As a result, information spreads quicker.

But what’s so interesting to me Nick is, every single time I, mind you you’ll have a much greater knowledge about these subjects than I do, and that’s one of the reasons I wanted the chat with you about it, because I’d love to learn about it. But the fact of the matter is it still seems to me like we are in the Stone Ages of Finance. It seems to me like we have no idea what’s going on and we still haven’t created any successful models that will work, that will actually function well for the long term. And I think that Bitcoin, I think that crypto is maybe step one in that, I don’t think it’s the end result but I don’t know man I just find this all very very interesting.

NM: First up I appreciate your kind comments on that, I definitely don’t know everything on it. But I will say that people who like, there’s a lot of people for example that I think that kind of dichotomy, the kind of black and white views of the world where people view either cryptocurrency as being nothing, take for example Nouriel Roubini, well respected economist, you know continuously rails on cryptocurrencies, says because it’s flawed now it’s never going to be good, and you know continuously rails on the inefficiencies that we see in crypto right now. And so because of that it’s never going to be something. And then you also have those who believe we’re right on the cusp of something, next year crypto is going to be in the hands of everyone, it’s going to be so great and that you know it’s just going to save everyone, and everyone’s going to want to be their own peer to peer. You know they are gonna want to be their own bank and send peer to peer transactions, and they want privacy, and they won’t settle for less, and you know all these things. And they want to have decentralized currency.

And that’s BS as well, you have to find a middle ground for you and really understand on a fundamental basis what cryptocurrencies are, cryptocurrencies I do believe are going to have a very optimistic future, I think they’re going to be in multi-trillion dollar currency market. And that’s what we have to understand what it is, it is going to be a currency market.

These cryptocurrencies have specific values that many fiat currencies cannot keep to, they have in many cases fixed monetary policies, whether they’re inflationary or deflationary, they are fixed in most cases.

Second off, removing trust or the need for third parties. In a lot of economies that’s needed, in the west not really, not where we live right now, we trust third parties all the time. I trust third parties when I go pick up my groceries at the store, and also as much as I hate to admit it, I use Banks. I have to for my business. It’s just cryptos not there yet, I’m not getting paid in crypto in that case, and or I’m not getting a cryptocurrency that’s holding it’s value relatively well.

So because of that, we know in certain areas cryptocurrencies are extremely valuable, wiring money across the world, still way better than Swift right now.

You know it’s very important to understand what it does right, and what it doesn’t do right. Cryptocurrencies are going to take years to get adopted though, that’s the one thing that so many people have a hard time understanding, because they want things to happen very quickly. I think many people in the crypto space saw what happened in for example, November and December of 2017 and they think it’s going to be like that.

There will be cycles like that, we have yet to even have our dotcom bubble yet.

But it’s going to take time, so kind of a preliminary kind of time scope.

Or like to get an idea of the over free picture I see happening, is that right now we are at less than 1% of user adoption, a lot of articles around the world try to say cryptos at 5% adoption, and it’s like that stuff kind of BS. We are really actually at around a little bit under 1% of the world population and that’s huge, because if we only at 1% that’s the equivalent of the internet user adoption in 1994.

So this means that we haven’t seen our dotcom bubble yet we haven’t gotten to 3 to 5% adoption like it was during the dotcom era.

When we get to that, valuations will soar, but they’re also going to collapse and we’re going to have again these larger cycles and that’s probably going to be in 2020 you know and beyond in that case, when we really reach that.

So it’s going to take time, but that’s a pretty good you know potential return there in regards to how large crypto markets could grow. When you reach those levels of user adoption, it becomes much more mainstream, it gets media attention, people from all across the world in a relatively mainstream way start to dabble in it.

And again it’s going to be in places where it’s needed, where people will actually start to use it as currency.

Again South America, a variety of nations within Africa, your going to have South East Asia as well being huge candidates for it as well.

So I’m excited to see it, but I think one thing to add as well through all of that to really take away, is that there’s a lot of people who are excited about enterprise blockchain. And I even work as an advisor for a project that’s working with smart contract applications, but I have to be fair, I really think the bulk of the value here is in the fact that that this is an emerging currency market, that’s the key here. It is a emerging currency market where people will store value, and transmitted across the world. It’s a payment network built into a currency itself which is kind of interesting, so it makes it a whole new form of innovative technology.

We went from commodity based currency like shells in tribal civilizations, we then went on to a store of value through gold, after that we went to paper currency, and then we went to digital currency and plastic currency with credit cards and debit cards, and now we’re entering into the age where a lot of people said ‘hey a currency can’t have fixed value therefore it gets manipulated and inflated’ And we’re saying no it can, this is what cryptocurrencies bring, a fixed monetary policy and the ability if you choose to do business peer-to-peer and hopefully private as well in the digital space.

22:17 | 55:17

N: I like it, and that leads me on to one of the things you said there, it leads me on to the question that I actually bring up with a lot of people on on the this podcast. Right now the cryptocurrency space is divided Nick, there is all the people who I would say are pre 2016, and pre 2015 what people call the OG’s right. Like a lot of these people are very much believers that Bitcoin is a currency, that’s what it started off as, that’s what everybody saw the potential of it as and the beginning. And now we’re in 2017/2018 and obviously we’re in 2019 right now but some of the older generation financial people are coming in, people from Wall Street, people with I would say a lot more financial experience then a lot of the the people who were previously into crypto. And these guys are coming in and they’re saying it’s a store of value. I’ve seen a couple of people recently say,actually I think there was a Bloomberg article of some guy arguing that it’s actually becoming, and will become a better store of value than gold. So there’s a split there but there’s also a potential of it being both, a store a value and a currency. what do you think about this, what are your thoughts there?

NM: You know I feel like this argument of a store of value and peer-to-peer currency was quite silly, it basically this has been brought up by a lot of people, probably those who are predominantly pro Bitcoin and some who are pro like say the alternatives like Bitcoin cash, and I admire actually, I know a lot of people will backlash me for saying this but I admire Rodger Vers ****** towards having a peer-to-peer currency. Because he does bring up one point, a store of value needs to be able to be transmitted in a decent way right, you can’t be paying 100 to a 100 thousand dollars to transmit store of value it’s just stupid.

So we don’t want fees to be getting to be $40 or $50 levels that we saw back in December.

That being realised, they’re not synonymous. Stores of value and transmission of value as well are kind of hand-in-hand in that sense, some are easier than others. A currency is very easy to transmit and it usually retains its value a little bit better.

But the thing is people don’t understand that currencies are stores of value alright, the biggest stores of value in the world are currencies. It’s not properties, it’s not gold, sure currencies do depreciate slightly overtime if the currency is inflated but we tend to find that the majority of the world’s wealth is stored in currencies, it’s stored in paper money. The money that you have in your bank account would be an example of that, into the savings that people have in that case, and it’s important to take that into account.

So I think that cryptocurrencies are going to take the best of both worlds, they’re going to take the limitations in supply of gold, but they’re also going to have the efficiencies and the expansiveness of being able to send money across the world at lightning speeds, without the trust of any third party if f that need be, or to do it privately.

And that sets up a whole new world, that is literally, I think people don’t understand the term digital cash, that is me being able to hand money all the way across the world and hopefully with the right privacy features, being able to do that without any type of censorship, and or tracking from the government. That’s a pretty cool thing!

And that’s a new Dichotomy, whether it’s good or bad for monetary history and financial history, it’s one of the next big leaps in Innovations.

But again as I mentioned, it takes time to kinda realize what it will become. But I think that’s a good ballpark estimate, is that it’s a new step in the era of financial technology. And we’ve been getting this faster and faster overtime, as I mentioned the last one was you know, debit cards and digital money back in the fifties or sixties.

I actually didn’t know until about 2 or 3 years ago that it was invented that early on, but basically beforehand, paper money came out a few hundred years ago in this case.

And it was very hard to convince people to go from gold to paper currency I can bet you that.

But it will be the same for crypto, but it will happen much quicker I think, being in the digital age and having a lot of people in the world such as in Asia, being used to using QR codes and all these mobile payment systems, and mobile banking. it will be very affluent to them.

N: Yeah I mean in China, literally I was in China for the first time in mainland China, for the first time earlier this 2018. And everyone there uses WeChat, like every single person.

I was walking around I went and ate dinner somewhere and I asked them specifically before I walked in there I was like ‘do you guys use credit card’ and they were like ‘yeah we use credit card, you can pay with credit card here’ and she was trying to like tap my credit card on her credit card machine and I was like no you have to swipe it, you have to use the chip. And she had no idea what was going on.

So yeah it’s super interesting. I think that a lot of people in the west don’t even know that people in like China and things like that are using WeChat and all of these different things to pretty much, not even pretty much, literally to fuel their whole economy, like I would say probably 70% at the very minimum are using WeChat to pay for things.

And it’s a form of a digital currency, I wouldn’t say it is cryptocurrency at all but it is a form of way to pay digitally I’ll say that.

NM: Yeah you know what, I should separate. You know digital currency has been around for a long time, again it was in that step of innovation with the credit card.

I mean when you swipe your credit card it’s digital deductions, and some kind of balance sheet somewhere or sorry I would say more on the table on a Bank’s balance or Ledger in this case, interestingly enough who owns what.

But yeah cryptocurrencies are another form of that as well, it’s almost like it’s its own little currency class in a case, but yeah I think that again you have a whole audience of people around the world where as a lot of us I kind of like, ok this kind of QR code thing, I’ve seen this before but I’ve never really used them to pay for things.

They work well in the West but in Asia they’ve been used for the past few years, and it’s become extremely popular.

And I think like for example, we’re not limited by QR codes.

As you’ve seen, a lot of crypto startups try to do debit and credit cards with crypto.

I’m assured you’ll be getting those, you know an actual ones that don’t get shut down like the previous ones, and people will be able to pay for crypto in the West in that case.

I think more than anything, a lot of people will get used to using you know QR codes in that case, using mobile systems because we use our mobile phones for pretty much anything nowadays.

N: Agreed man, agreed. Yeah I think the main thing that I’m really taking away from this part is, I don’t think the West can really comprehend how great of an impact it has on other cultures, unless you’ve travelled a lot, unless you’ve seen places like Venezuela, places in Africa and where there is heavy corruption.

You know I think you’re 100% right on that, that’s where this is all going to really start to really make a really big difference in the world, I don’t know man I’m excited to see it, it’s going to be cool.

NM: Speaking to your point Michael, here’s the thing right and I don’t mean this to be rude, I’ve been very fortunate, this was the first year I got to travel internationally.

But I’ve studied the world for the past few years and I got to luckily see it first hand as I travelled, like in the Philippines for example, I went to this conference I think it was called the Beach Blockchain Conference or something like that.

And I basically flew into the airport and in the ten minute ride that I took to this hotel resort which was beautiful, and it was literally like a luxurious Island trip in this case, it was beautiful beaches, the beaches were awesome. But again I don’t really get caught away by that stuff like that.

I wanted to see the 10 minute car ride, what the Philippines looked like. And I saw the immense dire poverty that’s still there, and it’s not so much saying ‘oh you know they’re suffering, this is bad’ I was thinking to myself, what’s keeping these people down in an age of technology.

And it has to do with a mixture of a few things, corrupt governments in some cases. But it has really to do with the fact that all of these people I saw, I knew that there was two things that were true, they have mobile phones but they don’t have bank accounts, ok. And that’s the whole thing about this age of cryptocurrencies, it’s a mobile first approach. I still see people using like QT wallets and stuff for crypto. It’s like no no, it’s don’t make your first wallet for the computer, make it for the mobile phone because that’s where your audience is, that’s the people who want to use it.

And we’re doing some work, I can’t talk about it really but with project Genesis which is something I’ve been working on, we’re thinking with that approach. We want to get adoption and we want to get it into the hands of people who really need it right now, they are waiting for someone to give them an opportunity.

There’s a book, I can’t remember the title, I’ll have to think about it later on, but it was basically talking about how there was this new company or this new organisation, it was nonprofit. It would actually do micro loans out to people to create small businesses in developing economies, and you would think because the banks won’t touch them, they won’t give the money, that they’re not going to pay it back. But they actually had a 99% retention rate, 99% paid it back plus the interest.

So I think that speaks to something, I think it speaks that if we can open up the doors with crypto for them that will not only bring a lot of adoption, but it will actually start to get these economies out of out of the dirt and actually building up. You know I’d love to see a lot of these people move out of poverty, and that’s what really motivates me at the end of the day.

I think yes there’s an opportunity to make money in crypto, yes there’s a lot of cool opportunities and cool technologies.

All in all though, I want to see this actually change people’s lives, and it can.

I know because the tech is there, and and I know because of the policies that crypto sets in place, the fundamentals that it sets, so long as it’s a sound cryptocurrency, will change everything.

N: I’m 100% on board with you there man, that’s really like what stuck with me, that’s why I have stuck with this, you know I’ll be 100% honest I first got into crypto in 2012/2013 time frame, just because it was the only way that you could utilize the Silk Road. And got interested in it, and I learnt a little bit about it with Litecoin and things like that, I bought a bunch of Litecoin back in like 2014 or something like that. And was learning about it but it didn’t click for me you’re right, and then I got back into it 2017, but the only reason I got into it was, I could make money.

And I wasn’t in a heavy financial spot, I wasn’t in a place where I was like doing financially well, and I wanted to be a little less stressed, I wanted to take some stress off.

And then I got to the point where I had made a decent amount of money, more money than I’d ever had in my life and I had it in my bank, and I’d paid off my debt, and things we’re good.

And I sat there and I was like ok, what do I want to do now. And I said well I’m already spending 15 hours a day minimum doing this crypto stuff, let’s look at this you know, and I had been learning about it, about blockchain technology through researching ICO’s and studying these things while looking at different investments opportunities.

And and it obviously caught my interest to a degree, but I sat down and I really really started to study it man.

And that’s why I stuck with it, the money is great and all, it was obviously a very big catalyst for me to kinda get my feet off the ground and be financially healthy in my own life.

But the fact of the matter is, what I really care about is, I care about creating a systems, I care about creating models that are better than the current systems and models that we have.

Like I’m a very big believer in the fact that there are entire new systems to be made, entire new models that we haven’t even thought of, that we haven’t even dreamed of yet that are actually going to lead us, the younger generations, into a new model of the world.

Something where we’re all going to live a little more in better harmony, living in better distribution of wealth and resources, one where we can live with the planet in better harmony. And man that’s what I think, I really believe that for the financial part of all of that, this is where we begin.

NM: Well first off congrats Michael for paying off your debts, that’s always rule number one of finance. And I’m glad to hear crypto is able to help you with that.

And another point to you, to your broader point in everything, absolutely agree with you, you know you’re mentioning kind of wealth distribution in this case, and it’s usually a very controversial thing and stuff in the west but the thing is people always in the west usually stand on the side of one of two sides in regards to a topic like taxation and their like we need to tax the rich, or we need to you know, we need to cut taxes to broaden the middle class. And it has nothing to do with tax, it has to do with monetary policy, I’d say maybe a little bit with that but taxing is a second level activity, you have to ask in the first place why there were such dichotomy of wealth, why was there such a split, why is the middle class diminished in most developing economies. And it has everything to do with how central banks have responded.

Since 2008 they’ve been propping up assets, guess who owns assets, I’ll give you some statistics.

I think it’s the top 1% own between 33% or 40% of all assets, the bottom 50% of American owns what is it, .5% of assets, so a half a percentage.

So that provides some perspective, it’s like you have to understand and get to the root cause of what’s causing this right, and that’s why housing prices are going up, and assets are going up, but wages….. we just finally got a 2% increase like whoop-dee-doo. You know that’s why we see this kind of dichotomy in wealth, and it has all to do with understanding how money works, because that’s what we’re talking about you know, it’s financial vehicles of wealth and stored wealth in a sense.

So I’m excited to see how crypto will do that for the world, it will remove a lot of the need for third parties and middlemen, get rid of the rent-seekers, get rid of the people in the middle who don’t need to be there.

Love it, bringing in features that we don’t have with digital currency nowadays, privacy if it’s needed, I think that’s an essential feature for peer to peer digital cash, because cash is private at it’s heart. And you know the ability to manage your money, to have financial sovereignty.

It’s not for everyone, a lot of people like I mentioned, as I go to the grocery store every day, I trust that that store is going to have the best interest in mind for me, and I’ve gone there every day, and I go to a variety of restaurants and food chains, and they always provide me a good service. And I put that trust in them, because again I know they have economic incentives.

But there are some people in certain positions around this world, and they may even be in a good position, but they don’t feel that they can put that trust in a central institution. And you know what, I think that they should have an option to opt out of that system if they want to, to have sovereignty over their own money, and that’s what crypto does.

It’s a really exciting thing, I can’t tell you of anything Michael, that will do anything more impactful in cryptocurrencies and the financial sector to uplift the poor over the next decade or two. I think there’s nothing else out there, crypto will be the catalyst for that and it’s going to be so amazing to see it how it helps uplift most of the world in that case.

N: Yeah man, I’m pretty excited to be a part of it I like it, I love it.

Switching gears a little bit, I think that what we just talked about is what I’m super super passionate about in terms of all this stuff, but I want to switch gears into the actual cryptocurrency realm, moving a little bit away from the financial markets.

38:15 | 55:17

N: What do you see is happening right now, you know we’re in the middle of a bear market, we just stepped into 2019 it’s January 2nd today, people obviously are feeling down who invested early 2018 late 2017. But from the other perspective, things are still moving forward, technologies still advancing, projects are still building, things are still looking good in terms of regulation and stuff like that. What’s your overall perspective on what’s going on right now, how are you feeling about it?

NM: I’m feeling fine about it, I mean it’s definitely not fun to see the market going down but I’ve traded many markets before, I’ve been through Bull markets and Bear markets. And I think I’ll definitely get to the point about what I think a lot of people are feeling, and that is the feeling that this space is done, it’s had it it’s run and everything, but I can tell people with the confidence of my opinion in this case, you gotta take it as such that this is just the beginning. If you understand what this market is as I’ve rambled on for the past few minutes here to your previous questions, understand what cryptocurrencies really are, and understand really at it’s core what blockchain offers, because that’s what fuels all of this, the distributed Ledger technology in a sense, what really benefits from removing trust, what benefits can be extracted from blockchain distributed ledger technology, and what industries really would benefit from those benefits right.

So I can tell you above all, the reason why I think peer to peer digital currency is the way to go, or a digital store a value, whatever you want to call it.

Money in this sense is the best, because governments, central banks and regulators in this financial sector have an attendant history to manipulate monetary policy, to wreck economies, because of it. And to again get caught away in short-term bubbles rather than long-term growth and stability.

So outside of that, I think money is the best thing to focus on in this case, but outside of that I mean you have to think, even some of the industry’s for example the one thing that I think we came to a realization to in 2018, there are a lot of people who love like for example the enterprise protocols, and they love the enterprise implementations for like supply chain logistics, and all kinds of things of that sort that have their own tokens.

And I do agree that things like supply chain logistics and generally just tools like smart contracts will be great for a variety of industries, I have no doubt, like I mentioned I’m working with a protocol, or a project right now that’s helping to implement use of some of these protocols, and I can see the value there absolutely.

But do you see them really buying tokens, do you really see them you know going out of their way to say ‘Oh I’m going to be using 100 vechain and waltonchain’, all these coins and stuff in tokens to to get done with the work, and I would say no, what they’re going to most likely do is use distributed Ledger technology, let’s say you have for example 20 major supply chain logistics companies, they get together, and on a ledger they would operate together as a permission chain, and they would simply record things on the ledger and cut out inefficiencies, that’s probably what they going to do.

That’s what a lot of governments are going to do when they create Central Bank cryptocurrencies right, and that’ll mitigate -some people say ‘well that’s enough trust reduced that we don’t need cryptocurrency’ and you know what for some people that’ll be the case, they will implement central bank cryptocurrency if global currencies collapse.

And people are going to have to choose, do they want central bank cryptocurrencies or do they want to say Ah I’ve learnt from history, I’ve been hit hard enough, half of my savings went away, I need to get a new crypto now.

You know it’s that kind of dichotomy that we have to realize what is this technology really do, it’s like the internet, the internet didn’t revolutionize everything but it did revolutionize communication, it revolutionized business and how we do commerce, it revolutionized you know media and entertainment, things of that sort, and it also provided a plentiful amount of jobs and opportunities for us.

So I think it’s important to really understand what the technology does, and once you understand it’s benefits you can see what industry really needs those benefits.

So that’s something that we’ve learnt a lot I think in 2018, but I’d say in summary you know 2018 was kind of the year I think of acceptance in a sense, you know a lot of people said that it was the year of STO’s security token offerings, or regulation.

We haven’t even gotten full regulation yet, we don’t really know what regulation agencies are going to claim cryptocurrencies are.

We have all these mix matches and with the CFTC and the SEC are saying, you know the SEC sees it in more in a securities manner, you’ll also see the CFTC seeing it as a commodity, and it’s just this whole wash of different viewpoints.

And I’d say in a sense, it’s kind of acceptance and realizing that this is going to take much longer, and I feel bad I tried to tell people about it back in the peak of the craze in December, and outside of that though I was a little bit eager when we were around the $6000 range, I thought we were going to hold that and it was going to be a little bit different this time, that you know we’d be able to not sell off as much as the past.

But as the old saying goes history repeats itself, so I think this is been really good for the year of acceptance 2018.

But 2019, I think it’s going to be year of actual regulation, actual financial products coming out like not only backed coming out but also a Bitcoin ETF, I think we could very well see that towards the end of the year, which is exciting that’s something to look forward to.

But it’s going to take time and a few things need to really change.

44:03 | 55:17

N: How do you feel about all these regulations that have come in you know? We’ve seen the SEC come down hard on a couple of influencers, on Etherdelta, on a couple of ICO projects, do you think this is just the start and they’re just being kind of light right now and they’re going to come harder, do you think this is kind of the medium level of what they going to be doing at a higher frequency in 2019?

NM: Like you mentioned for influencers like Paris Hilton and Floyd Mayweather, I think that’s a perfect example along with the ICO’s, they went after Paragon and Airfox, I don’t know much about Airfox but I know Paragon was a cannabis on the blockchain ICO, the SEC is actually not that hawkish on cryptocurrencies, they’ve actually been a huge aid in weeding out the bad actors, Paragon was obvious scam from the start, anyone who could see how much they were spending on their advertising budget and the celebrity use of endorsement, obvious scam. Glad the SEC went after them, they’re really doing what they’re supposed to do.

I think everyone sees Jade Clayton and all of these guys at the SEC as like these Hawks who are like in bed with the financial institutions, again this is what I always press is to not view the world in a black and white nature, don’t believe that it’s just that one way or the other, it’s very complex and there’s a lot of people on the SEC who come from the traditional financial system, they’ve seen the corruption, and as an organisation they have an obligation to try to stop you know these kind of obvious corrupt activities you know.

And to put some prospective here they haven’t even gone after Binance for listing BnB which is clearly under financial terms a security token.

But Binance is still operating as a major exchange, still doing good SEC still hasn’t gone after them that tells you something it tells you that they’re willing to find a middle ground. They understand crypto is new, that they were a little bit behind the curve, they couldn’t keep up with it, but their getting rid of the obvious scams.

So they also made that website I think a few months back, it was called Howey coin, that’s what it was, and they were talking about cryptocurrency ICO’s that were obvious scams and they passed the Howey test.

They were raising money for Securities and they showed you what it looks like, and I can’t tell you how many ICO’s that I got recommended from my audience that were just people reaching out to me, you know that looked exactly like that. And I was like no, not covering that, no I know what that is, that’s a security.

So as I mention again, to the year of acceptance, this is been a year where we realized ok we need to slow down, we need to get a better foundation. And it’s not just the regulators that are doing this, people, the Investors are the ones slowing down, their realizing wait a minute these tokens don’t really hold much value, not to mention there was an ICO that just happened last week that does the exact same thing this token does, how is going to beat out that one.

And again the crazy thing about this it’s not even the dotcom bubble of crypto.

So what’s that going to look, like I don’t know but again you’ve got to take it for what it is in that case, and we are still in the Wild Wild West days of crypto, cryptocurrencies are seen as the wild wild west of finance in general and it will remain that way for a while because it’s private decentralized in many cases, but oh man we are just getting started with that that’s the crazy thing. So, or at least in my opinion so.

N: I’m with you man I think it’s really interesting. And I think one thing that you touched on there is the fact that just your average retail investor is becoming so much more intelligent over the period of January to December of 2018, you know even January to July.

You know in January we had these people coming in and, mind you I was no expert I was still very new to the whole investing and trading faces. But you have these people coming in, and everybody is buying all of these ICO’s, they’re making good money still, at some points even though the markets technically peaked, and then all of a sudden like the market it’s just tanks you know, then all these people start to look.

And by December and right now, by the beginning of 2019 I would say a large majority of people are like ‘well that’s a scam, that’s a scam’ I mean technically speaking it’s more of a money grab than a scam, but people are becoming much more financially aware of where they’re putting their money, what these companies are doing ,what these companies are doing with their money, and where they actually are in the development, what actually matters.

NM: Right you know one thing I’ll say that is a true factor of finance for the majority of people, and a lot of people say like no I’m going to be different, it’s going to be different for my case.

It is ***** that you have to learn through losing, you really have to. I didn’t learn for example, I can tell you and it’s a little bit of a step out of crypto but it’s the same application of learning from mistakes, when I was young and I just started out investing I made two investments in equity markets. I made an investment in for example, there was a solar company J A Solar Holdings, a Chinese solar company, and I also put the other half of my money that I was given at the time to invest, just a few hundred bucks, Into into a penny stock company MJ and A, medical marijuana Incorporated and I was so eager to see medical marijuana take off, and the marijuana sector in general, I knew it was going to be something down the road, but not only was I way too early to the cusp of it, but it was a penny stock. I thought Oh I’m going to be different I’m going to be able to trade Penny stocks, and a lot of people fall down that rabbit hole. But it turned out I lost like 20/ 30% on that penny stock trade in a month, and on my actual investment I made 30% on my solar stock so I broke even which was nice but you know if I would have just invested in you no solid small to mid cap companies that weren’t Penny stocks, that I had plenty, plentiful amounts of TA and charts that all did well, I would have actually made 30% for the month rather than just being flat and losing my gains.

So you know I had to learn from that mistake and since then I haven’t traded Penny stocks.

And going forward, again it was a multi-year process but people will learn if you want to become a trader, be willing to lose. The best thing you can do though, is if you don’t know what you’re doing, you might feel confident that you do, if you are new to it and you’re not sure, trade with a small amount of money. And what you should also do as well if you want to be an active trader in this case, is you should keep a record on the side, a portfolio tracker of what you would have if you just held long-term, and if you can’t outpace that after a month or two, you need to probably give up the trading game for a while and learn from your mistakes, and see what you doing wrong.

That’s what I would say in that sense, but again just getting smarter, people will learn over time they’ll learn these ICO’s are really trying to sell you, and it’s little to nothing, they want your money.

I met so many people who are part of these ICO’s and teams and stuff, some of them, usually the core teams are great people, a lot of times they just want to build something, A lot of the times elsewhere there’s a lot of middle men, in the process who were playing a big flipping game, that’s pretty much what ICO’s were, they get into the presales, they pretty much prop up these ICO’s. Next big ICO they had connections to all the exchanges and then pop it out there for retail investors to buy their bags as they dumped it right, that’s really what happened and it’s very sad right, because I didn’t know about this until like early to mid 2018.

And finally I talked about it but so many of those ICO’s that I had admired and I thought there was going to be a chance or a value behind it, they just got ruined by the middlemen in the process, those teams might actually be building something useful but the token will forever be corrupted in that sense, because a massive amount of the supply went to a select few people and they dumped it on market and they made their short-term money and then they ran.

So I think that hopefully that changes.

52:05 | 55:17

N: Yeah there will always be bad actors in any market, but I hope it calms down. I’m 100% with you on that I think it’s pretty fucked up.

But anyways, moving into 2019 it’s January 2nd what are your plans for 2019 my man you got anything exciting coming up?

NM: Yeah we’ve got a lot of things, as I mentioned earlier my big goal for this year is to continue working on project Genesis which hopefully we’ll have more to talk about months down the road, it’s definitely a ways out but something that I’ve had for years in my mind and I’ve wanted to bring to the world, can’t wait to show it.

Outside of that we just launched a newsletter for the channel which if people like getting a macro picture of all different types of markets they can check out, not trying to shill my newsletter. But outside of that I’m hopefully going to be doing some more conferences, but in order to all of that outside of really project Genesis taking up a decent amount of my time, just continuing to make content on the channel covering financial markets and all different, all different markets and ways and stuff there’s a lot of interesting things going on so keeping an eye on all of those things, if you guys like to check out the channel you’re welcome to. Yeah again just trying to learn as much as I can right now and build as much as I can during this time period while we’re still in a bear market.

N: Cool man that’s exciting, well you know I super appreciate your man, I’m glad to have you on, Im glad you could be one of the first guests on the new podcast, I’m super glad we got to chat you’re an extremely knowledgeable human being and man I’ve I learnt a lot from this so I appreciate you coming on my man.

NM: Hey Michael thanks for having me on man, as always it’s a pleasure and I hope you doing well your end and best of luck with everything you’re chasing going into 2019 you got any plans?

N: Man I’ve got big plans, you know conferences, couple of big projects, couple of big mobile applications I’m planning on to launch, so got some stuff ready to go will see what happens.

NM: That’s awesome stuff.

N: Yeah man can you just give the audience a quick little overview a quick little spiel about where they can learn about you, where they can find what you’re working on etc etc

NM: Yeah definitely, so if you guys want to check me out my channel is datadash you can simply find me by searching on YouTube, you’re also welcome to join our Discord and we’ve also got a telegram group, all of those links should be able to be found in the description on all of my videos. But outside of that as well, you know if you want to stay tuned with project Genesis there’s a video on YouTube that I uploaded that has a link in the description where you can join the Discord where we will post announcement on it, but outside of that you guys can follow me over at Twitter @nicholas_merten and I think that’s about it.

N:Alright my man, thank you so much for coming on, super appreciate it and for everybody listening this is another episode of Evolvement and we will catch you next time. Peace.