We’re not really known for being conspiracy theorists, but in Episode 575 of The Traders Podcast, your host Rob Booker and the producer Jason Pyles discuss the continued meteoric rise of bitcoin and whether it is the target of North Korean hackers.
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Links for this episode:
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Jason’s movie podcasts:
Movie Podcast Weekly Jason’s comedic show where he and some friends review new movies in theaters.
Movie Podcast Network Twitter: @MovieCastNetwrk
Full podcast transcript:
Rob Booker: Mr Pyles.
Jason Pyles: Hey Rob. Good morning.
Rob Booker: I was wondering if you would like to travel to North Korea to teach the people there about bitcoin?
Jason Pyles: Probably not.
Rob Booker: Probably not, so that’s a no?
Jason Pyles: Well …
Rob Booker: That’s a hard pass?
Jason Pyles: Well, yeah, I’m not sure. I’m not sure. What kind of other vacationing opportunities do they have there?
Rob Booker: Well, they have a … Okay nothing.
Jason Pyles: Okay.
Rob Booker: Really nothing. Absolutely nothing. There’s nothing going on. Did you know, according to Vice News, David Gilbert of Vice News reports that students at Pyongyang University, has been accused of training North Korea’s state hackers. All right?
Jason Pyles: Oh.
Rob Booker: The university and the government invited Federico Tenga, who is the Italian founder of a bitcoin startup, they invited him to travel to the capital in North Korea and teach more than three dozen of the countries elite mathematical and programming students about bitcoin.
Jason Pyles: Sounds comical for some reason. I don’t know why.
Rob Booker: Okay. Okay. Fair enough. It sounds comical. Here’s the part that’s frightening. This is the world’s leader, I mean, next to Russia. This is the world’s leader in hacking. Bitcoin has shown itself susceptible to hacking. Could you imagine now, a world in which, now that bitcoin is reaching 10,000 or so … Could you imagine a world in which all these people, over 100,000 new bitcoin accounts were opened on Thanksgiving day at Coin Base. Just one wallet. Just one wallet provider. Just one place on one day, grew by 100,000 accounts. Could you imagine if bitcoin was, in some way, shape or form, at some wallet provider, hacked again. I know I’m gonna get a lot of comments from listeners, cause every time we talk about this, I get corrected and that’s fine. I stand corrected on a number of issues regarding bitcoin. I’m not afraid to be wrong. It helps me learn. Could you imagine the potential to hack into bitcoin wallets. We’re now talking, not about millions, but tens of millions, or hundreds of millions of money that could be stolen. This is the wild west, Jason.
Jason Pyles: Wow. It sounds crazy.
Rob Booker: Why would this guy travel to North Korea, and teach them about it?
Jason Pyles: Hm. It must of-
Rob Booker: What’s wrong with this guy?
Jason Pyles: It must have a pretty good paycheck, right?
Rob Booker: Must have been. It must have been some kind of payday. I imagine they paid him in bitcoin.
Jason Pyles: Right. Exactly.
Rob Booker: I mean, I don’t know.
Jason Pyles: It’s what I’m guessing.
Rob Booker: Earlier this year, to add to this … I read this in another source. Cyber security, a company reported that someone from the North Korean capital, originating from IP addresses in North Korea, attacked at least three South Korean crypto currency exchanges, and used the fact that bitcoin is anonymous in its exchange, as a way to avoid the financial sanctions that have been imposed by the US and other nations in response to their nuclear tests. That’s absolutely frightening.
Jason Pyles: It’s slick. You gotta admit, that’s pretty slick though, right? I mean, that’s a …
Rob Booker: Yeah.
Jason Pyles: one way around it.
Rob Booker: I mean, it’s too late now, to get into bitcoin. It’s funny. It just seems too late now, to so many people. I’m certainly not going out there and buying any bitcoin, or whatever. I have a bitcoin wallet. I didn’t get in early like our friend, the commander, Rob Wilson, or anything else like that, but … There are other cryptocurrencies coming online, not every day, well, probably every day, but …
Jason Pyles: Right.
Rob Booker: You know, legitimate ones maybe, not every so often, but there still are brand new ones coming online. It makes me wonder at 10,000, there’s this rumor circulating now.
Jason Pyles: Okay.
Rob Booker: When it hits 10,000, that’s when everybody’s really gonna start getting in. That sounds crazy to me. Imagine that, that’s when a lot of people stand up and take notice and say, “Oh my gosh.” This is now at 10,000. If it’s at 10,000 now, it’s going to be at 20,000, or 100,000 in a couple of years. That’s the way people are talking Jason.
Jason Pyles: Wow.
Rob Booker: Does that sound rational to you?
Jason Pyles: No, because … You know, at some point, the other boots gonna drop right? The bubbles gonna pop.
Rob Booker: I guess. We’ll get accused of … I’ve been wrong about this now, before. I’ve been right about this, and wrong about this. To put it into perspective, hundreds of episodes ago, literally …
Jason Pyles: Yeah.
Rob Booker: Years ago, we called for 10,000 and 20,000 dollars in bitcoin. You can find those episodes at traderspodcast.com. A long time ago, when bitcoin was trading at, I think hundreds of dollars, we talked about it getting to 10,000 or 20,000. I’m not a bear on bitcoin. I don’t think it’s wrong or bad. I think it’s revolutionary. And then recently I was wrong. It looked like it was ready for a … It did correct, but I didn’t get the strength of the correction right. It corrected like we talked about, but it didn’t go far. I didn’t get in. I didn’t buy any, and then it just shot right up over the holidays. It shot up over the holidays Jason, because everyone was …
This is really what happened. People got around the dinner table at Thanksgiving and instead of arguing about politics, which most families want to do, people talked about bitcoin. You could do it 24 hours a day, through Coinbase for example, which has really high fees, but I mean, it’s an easy way for people to do it. You know, whatever. People stopped what they were doing at dinner, and they got a Coinbase wallet, and they got themselves bitcoin, over the holidays.
Jason Pyles: That’s pretty funny. I don’t know. We just watched Brian Reagan after dinner.
Rob Booker: Okay.
Jason Pyles: On Netflix.
Rob Booker: Yeah.
Jason Pyles: Yeah, it sounds like that’s exactly what happened. You’re probably right about that Rob.
Rob Booker: This isn’t over. I mean, if you think about … If you wanna call it a bubble, I think that’s interesting, but until it stabilizes, it’s, as far as I’m concerned, it’s just another asset, like the technology stocks, until it stabilizes. At some point in time, this will end … The fanaticism will end around it. The people who don’t know what they’re doing and whatever else. And then bitcoin will settle into a range, and it will be a more stable financial instrument. And then Amazon …
Some people say Amazon in some countries is already accepting bitcoin, but at some Amazon will start accepting bitcoin. Walmart will start accepting bitcoin. Then at that point it’s all over. Then it’s just gonna be a real thing. It’s not gonna be an asset that appreciates anymore. It’s just gonna be a real … It’s just gonna be something that we use in our daily lives.
Then, the government’s gonna come in a try to regulate it or whatever. I think it’s gonna be really difficult for them to do that. I guess they could prohibit the transfer of money onto bitcoin exchanges. They could do that. They could say that’s illegal. That seems exactly like the kind of thing that the government would overstep it’s bounds and do. Would that anger you, if the government said that?
Jason Pyles: Oh. I guess it’s a little … Yeah. It’s a little concerning.
Rob Booker: Yeah, me too. I wouldn’t call myself a conspiracy theorist, Jason Pyles, but …
Jason Pyles: Right. Yeah.
Rob Booker: A few years ago, the government said we could no longer open up currency trading accounts outside the US. That means we couldn’t open a … You can open a bank account outside the US. That’s totally legal. You can open up all kind of financial accounts outside the US, but they said, “No. You can’t open up a currency trading account outside the US.” That [inaudible 00:08:08] total overstepping of the bounds. Complete invasion of someone’s independent economic sovereignty. I mean, at some point in time, people are just gonna opt out of the system. At some point, people are gonna say, listen. You get your greedy little paws off of my … I’m even willing to pay taxes, even though some people feel that, that’s unfair. I mean, I’m even willing to pay taxes, but just stay out of my friggin’ business.
Jason Pyles: Right.
Rob Booker: I’ve been wondering. I’ve been waiting to ask you this. Where is the next financial … You know what I’m asking. You already know what I’m …
Jason Pyles: Where is it coming next?
Rob Booker: Yeah. I mean, is it too late? I missed this. I was thinking the other day. If I took 100,000 dollars, in December when I went and visited Rob Wilson … If I took 100,000 dollars back in December of 2016 …
Jason Pyles: Okay.
Rob Booker: I had bought bitcoin. Let’s go back on the charts here. Let’s say, Jason … Let’s say you took 100,000 dollars also. Let’s just say you …
Jason Pyles: All right.
Rob Booker: You know, you took 100,000 dollars of your hard earned podcasting …
Jason Pyles: Yes.
Rob Booker: spoils. And let’s say that on December third, I was Sydney Australia, hanging out with Peter and Diane and the crew. Let’s say that we did that then. Bitcoin would be trading at 762 dollars to the dollar. You would have bought, for 100,000 dollars worth of bitcoin. You would have gotten it at 762 and it would now be 12 times. Let’s just round it up. It’s 12 times higher than that.
Jason Pyles: Wow.
Rob Booker: You would have 1.2 million dollars, and it would be less than a year.
Jason Pyles: Oh my goodness.
Rob Booker: As we speak now, bitcoin will hit 10,000 dollars, as of today, the day we’re recording this episode. Bitcoin will hit 10,000.
Jason Pyles: Rob, here’s my question. Obviously, like you were saying, at some point, it will stabilize, but … You know, by the time it gets there … When that happens, some people will be very wealthy, and will other people be destroyed, if they’ve gone all in? I mean, is that how it works? Is this gonna lead-
Rob Booker: Well, it’s the only way to do it with things like this. You take a small amount of your money and you go all in. The problem is, this is like getting hit by lightening. Not only is it almost impossible to have happen ever. You don’t really know if you want it to happen. You know, suddenly striking it rich can, as much as we all like to think that, that doesn’t necessarily lead to a lot of good things in one’s life.
Jason Pyles: Right.
Rob Booker: I met the guy who won at the time, the largest power ball jackpot of all time. I met the guy. He lived in West Virginia. Do you remember the story of this guy?
Jason Pyles: That sounds familiar, but no. Tell it. Do tell.
Rob Booker: He was already a millionaire, and he won 500 million. He used to drive a truck around and he used to … Inside the truck he used to, at all times, keep a few hundred hundred thousand dollars sitting in the truck …
Jason Pyles: Oh wow. Okay.
Rob Booker: and was robbed repeatedly, stolen from. Eventually, lost everything. He was a West Virginia guy. Just old country boy from West Virginia. Eventually lost everything. The stories of athletes hitting the jackpot and then two years after they leave the league, becoming bankrupt. The stories of people who win the lottery, going bankrupt are frequent enough that it defies coincidence. There’s a connection. I mean, it’s not like you want to strike it rich like this. It’s not like that’s what you want.
I get text messages and email every day Jason, from people who say, “You know, where’s the next one? I missed out on this one.” The answer is always this, There is always something you can do to make an extra thousand dollars a month, or even 500 dollars a month. There is always something you can do to do that. And then, you can always buy a collection of financial instruments, which have demonstrated value, such as …
You just look at value stocks. Read the old Benjamin Graham book, or the works of Warren Buffet. You look at value investors, which are not in vogue anymore. You should run toward that right now. That’s what you should be doing right now, because it’s not longer in vogue. It always falls out of favor when the stock market’s running up, because value stocks and the companies that have assets, and return on their investment, they always go down, or they don’t do as well as the companies that are high flyers, or developing the new app that delivers a peanut butter and jelly sandwich to your door 24 hours a day, or you can date a peanut butter and jelly sandwich.
Jason Pyles: Right.
Rob Booker: Do disgusting things with the peanut butter, whatever it is. You take that extra money you’ve made on the side, and you get a list of value stocks. These are the traditional companies that are overlooked, that split into their separate parts are worth more than what they’re trading at now. You take that five hundred dollars, or thousand dollars and you just plow it into those financial instruments. It’s not gonna appreciate like bitcoin will, within a year. Over the course of the next 10, or 20, or 30 years, is not guaranteed, but has an enormously high probability of success. Beyond anything, once again, that can be tied to coincidence, and that’s the way it’s done traditionally. Everyone can do that.
It’s fascinating that we’re so enamored with what no one can do anymore. No one can get in on bitcoin at 762 dollars. It’s a shame that I didn’t take 100,000 dollars, because today I would go right now, and I would buy five 911’s, or I’d buy one Porsche 911 R. Right now. I’d just go do it right now. That’s what I would be doing. I wouldn’t even be podcasting with you, and we’d all be sorry for that.
Jason Pyles: Yeah. That’s true.
Rob Booker: Yeah, so, you can do that, and yet no one does it. Right now, you can put 500, or 1,000 dollars a month, with a side job, or a little side business, or selling stuff off, or selling your neighbor’s furniture. Just kidding. Whatever. Everyone can make an extra something per month and put that into value stocks and hold those forever. Everyone can do that. Yet, no one does.
Jason Pyles: Right. Yeah. It’s too gradual. They want the faster, quicker answer right? The overnight.
Rob Booker: Yeah. Okay, so maybe we could walk through that. I mean, yeah, we do want that. We want the quicker stuff. We want the excitement that goes with it. We wanna be able to brag about it.
Jason Pyles: Well, okay. There’s a song. I’ve been hesitant to bring this up Rob, cause …
Rob Booker: Okay.
Jason Pyles: I think that enlightened climate or culture that this [inaudible 00:15:12] could be viewed as distasteful. Do you remember that song, maybe even a little chauvinist. If you wanna be happy for the rest of your life, make an ugly woman your wife, or something like that. It’s a terrible song. Okay? I hate that song, and both you and I married beautiful women, so you know … Anyways, I’m just saying, that song reminds me of this situation that you’re talking about …
Rob Booker: Yeah.
Jason Pyles: Where, it always seems like the advice is, you know, forget about this get rich quick stuff, and just, you know …
Rob Booker: Do what is ugly.
Jason Pyles: Yeah, do what is ugly. Make small gains, and you’ll be happy. That’s what you gotta do, but it’s like, nobody’s like … Eh, no thanks.Rob Booker: Spike Lee’s, Do the ugly thing.
Jason Pyles: Yeah. That’s right.
Rob Booker: That is a brilliant comment. As usual ….
Jason Pyles: Thank you.
Rob Booker: You make the most insightful comment that, in this podcast could literally be 15 seconds long.
Jason Pyles: Right. Well, I just hope that our listeners don’t think that’s chauvinist. I didn’t write that song, just for the record.
Rob Booker: Yeah. It’s not like you really believe it.
Jason Pyles: No. No. No, I …
Rob Booker: If you do what’s fallen out of favor, what is unpopular, and you do … It’s not even about hard work, Jason. It’s not even about that. It’s just about doing what has been proven to work.
Jason Pyles: Yeah, I mean it’s the same thing with eating healthy or exercising. It’s like, “Okay. Yeah, but that’s not fun.”
Rob Booker: Yeah.
Jason Pyles: It’s like, you want your body to look good. You wanna feel good. You wanna get healthy. You know, eat these carrots, and this salad. That’s like, “Nah.” You know, I’d rather …
Rob Booker: Is there any other way I could possibly do it?
Jason Pyles: Yeah. Yeah. I mean, the answers are there for people in these situations. We don’t want those answers. Myself included.
Rob Booker: Well, Jason, how can people argue with us about this show?
Jason Pyles: Well, they could actually text you at your cell phone number, if they want. It’s 304-281-8332. They could leave us a comment in the show notes for this episode at traderspodcast.com.
Rob Booker: Where can traders, who are interested in movies hear your podcasts about movies?
Jason Pyles: Moviepodcastweekly.com. I would highly recommend Three Billboards Outside Ebbing, Missouri. It’s a very dark, comedic crime drama a la Fargo. You know, a lot like Fargo. Pretty violent, but pretty hilarious. Check it out.
Rob Booker: Very nice. All right. We’ll see you next time everybody. I’m Rob Booker on behalf of Jason Pyles, the greatest producer in podcast history. You’re listening to the Traders Podcast.