Before buying Bitcoin/Crypto (Ask these 4 questions)


all right so I’m here with Jim Wang Jim
is a good friend of mine he’s a personal finance bloggers he started blogging a
few years before me he is like a dinosaur personal finance bloggers and
he actually sold out of his first blog that he started way back when and then
started another one cuz you just couldn’t wait to get back in the game so
um so Jim glad to have you here brother glad to be here thanks for having me so
Jim now runs a blog called Wallethacks.com which is I don’t know if I’m told
um but you are one of probably three personal finance blogs that I actually
subscribe to so Jim just has a great blog he’s just got this awesome I don’t
know kind of nerdy analytical mind when it comes to this stuff and and I just
really enjoy what he does and anyway today we’re gonna chat about
cryptocurrency and this idea of investing in it and I’m using that term loosely
because I think that’s where we are with everything I mean I think anything that’s so new and it has so much excitement about it I
don’t know the valuation of it is that a bubble but it’s certainly at any moment
it goes up it goes down it could be in a bubble and you wouldn’t even know it
yeah the thing that I always think about is
rather than thinking about whether or not instead of bubble or cryptocurrency
is a series they’re like hundreds of cryptocurrencies right people know about
the big ones like blockchain I don’t know actually
Bitcoin and Ethereum yeah things like that and I I think about it like auto
companies like when you think back to when they first started having
automobiles if you were to go to Wikipedia and look up the list of
defunct automobile manufacturers it would shock you how many names are just
starting with the letter “A” like people know cars are gonna be big like our cars in a
bubble no cars are going to be very popular blockchain and cryptocurrencies
are probably going watching is definitely gonna be big which is the
technology it’s built on yeah cryptocurrency who knows where that will
go but you don’t know which one of these is going to be there facto going to the
future so it’s it’s like cars like cars are gonna be big you don’t know that
Ford is gonna be the one that outlasts all these other ones but go check out
Wikipedia it’ll blow your mind how many auto companies there yeah that’s really
interesting so you wrote in email I think somewhere
around when I did so at the end of 2017 well let’s go back so I just did this
today because I thought this was really interesting so one year ago today
October 23rd the Bitcoin price was at six thousand dollars so two months later
in December, December 18th exactly, I wrote an email out to my readers where I
was talking about how because Bitcoin had exploded and I was talking about how
I was sitting this one out and and basically that I viewed it to be a
bubble because it went from 6,000 dollars up to like 17 18 thousand
dollars somewhere around there in like two months and that looks very bubblish to me and so because I kept on getting emails from readers saying I
want to invest in Bitcoin everybody’s getting rich I want to do it and I so I
felt like I had to address it and I pretty much that I listen I
if it’s gambling and you’re viewing it the same way as like a lotto ticket fine
but at this price you know I just think you should stay away like this
time or not even this price but this time in I don’t know in the lifecycle of
this whole thing and then so the funny thing is and you know this Jim you know
where I’m going with this but right now the the price of Bitcoin is basically
back down to where it started a year ago and so right now it’s like 64 or 65
hundred dollars the point I think is that I mean like you’re saying it’s like
we don’t know what’s gonna happen the prices have been all over the map and
yeah it’s just very much a volatile thing don’t you think yeah I get if
people want to gamble to play around and you know buy a couple coins and just
sort of like be and it’s like the Powerball and the Mega Millions which
like they’re over its 1.6 billion yeah for the Powerball I don’t even know I
just keep hearing about it on the radio and it’s like that’s fun and exciting
buy ticket join in the excitement maybe you win absolutely nothing and it’s
still fun cuz it’s entertainment maybe you win like some little prize of a
couple hundred bucks maybe if you go out and buy a ticket and you win one point
six billion just share a little bit with Bob and me yeah I think that’s alright
might be I don’t even know when this is getting published it might be
too late someone might have already won it but it’s it’s fun and it gets you you
know excited and into it but it should be some long-term play and it’s
definitely not an investment it’s not something like I want to buy and hold
this for 40 years because who knows what’s gonna happen in 40 days yeah
that’s a really good point you know I think that question kind of
ties right into what you’re saying is this play money like is this retirement
money is this grocery money you know if it’s any of those things and you
probably should avoid it all right yes 100%
and especially with cryptocurrencies like if you were to play the lotto you
know how it works you go to the gas station buy ticket if you win you go
back to the gas station to get your money crypto currencies bitcoins like
people can break into your digital wallet steal your money there’s so much
technology involved in it and there’s so much fraud because it’s so new and
because there’s a lot of money in it it’s it’s too much to learn I personally
tried to go learn about it I have a basic understanding of the technology
behind it but I know enough that I don’t that the thieves are way better at this
yeah and I don’t want to do something stupid that when I go tell someone else
like oh you can’t do it that way you have to do it this other way everybody knows
that well I’m an idiot I don’t know that now all right well based on what you have
kind of research with this I mean would you have any recommendations in terms of
like avoiding scams and voiding ripoffs anything like that if you want to
investor gamble you want to stick with the main coins like Bitcoin and
Ethereum stick with the major platforms like Coinbase and a few of the other
ones don’t go and buy some there there are hundreds of coins with all sorts of
names and they may promise this in that but it’s just not worth it
stick with the main ones like yeah you’ll see the ones that are listed on
like the homepage of Coinbase those the ones that I would I would trust I
don’t even know all of them they’re only five of them yeah that are really the
reputable ones that have been around for a long time and stick with those you’ll
be you’ll be better off alright so but even doing that are there in terms of
like getting your account hacked like we have heard of people with bitcoins
getting in their accounts hacked in which I you know and playing the other
side a little bit here I mean people get money stolen to – I mean cash – it’s not like
this is a unique thing but obviously when it can be done in secret so so well
in hidden I think is a little bit concerning one of the things that will
protect you especially with banks and sort of investment accounts is that you
have if there are fraud protections in place that if you are largely smart
about what you do isn’t like don’t give out your password don’t log into random
web sites don’t come to your brokerage account from you know a hotel business
center as long as you avoid those things you should be fine no one’s gonna be
able to break into the systems or I should say this if someone does break
into the system and steal your money I had no fault of your own you’re
protected mmm that’s not the case with Bitcoin oh yeah okay okay so it’s gonna
say like I know you haven’t known yeah so if some employee at some you know
digital wallet place steals your money you have given no recourse we gonna go
to no it’s not regulated in the sense that the financial institutions are and
there’s no insurance no protection so that’s that’s why I
another reason why I would avoid it yeah so another question along these lines
and you kind of hinted at this but so if I wanted to invest in Bitcoin or if you
were gonna invest in Bitcoin like how would you do it and you mentioned
Coinbase are there other big ones that you recommend
there there are a couple of them I don’t know them off the top of my head because
there’s Robinhood do it Robinhood does it yeah I think you have to you have to
one get an account and then be invited in I don’t think it’s open to everybody
right now but you don’t really need more than than one I think like Coinbase is
the big authoritative player okay all right all right that’s good I mean like
yeah is the biggest one is plenty sufficient a lot of the other ones the
benefit they have is the ability to move money around quickly and they’re meant
for the day traders that are looking at the charts and trying to figure out you
know how do I gain like a tiny little edge in trading and yeah I I’m not
sophisticated enough to even be able to analyze whether or not those services
are what which one’s better than the other yeah so my thought is if you’re
gonna buy you know Coinbase is fine Robinhood’s good too so what are your
thoughts on any of the cryptocurrencies as a hedge and their value you know just
as a hedge against whatever economic collapse of the US or anything like that
any thoughts my thought is you might as well be getting into some sort of
precious metal like gold all right so let’s say let’s say the US economy
collapses the US government collapses u.s. dollars worthless if if I have to
go to another country would I rather have cryptocurrency of some kind or I
rather have physical gold that I can carry I always think back I forget
where I read this but I read this story about a guy who fled somewhere in
Southeast Asia comes to the US and all he has is five gold coins like an ounce
of gold a pound of gold like just a single pound that’s worth a lot of money
and that’s really that’s a really good point and you’re not looking you’re
looking to start over you’re not looking to you know recreate your wealth in a
new a new country yeah I probably if you want ahead just pick up some gold
and just hold it what really scares me about Bitcoin so a friend of mine this
is just a random story a friend of mine sold his business and the guy paid him
in Bitcoin right this is a friend of my wife’s
and the Bitcoin like he saw the 6000 a coin up to ya know 1300 or 6 there
16,000 and then back and I remember the thing that really scared me about it
getting hacked and sold was that his key for unlocking his digital wallet was
a series of three QR codes that he printed out and laminated it was a cool
cold storage and he mailed one to my wife he’s like if I die this is how you
access our Bitcoin I was like this is way this is like too much and we have to
find the other two people cuz it was like a skeleton it wasn’t a skeleton key
it’s like a whatever like a it was like Goonies like you have to figure out
these three pieces come together to unlock the cold storage of his digital
is Bitcoin he didn’t tell you they were either no
he told us who they were it was like her other friend that my wife knew and then
someone else that she didn’t know but the other person knew it was like no one
knew everybody else in this like secret treasure map hunt thing and I was like
this too much that’s too much for me yeah I mean it’s it’s kind of like a
modern-day version of uh Indiana Jones temple or something right you gotta find
a guy in a cave and he’ll give you this gem and all the precious rock in the
wall and yeah oh that’s though all right man well I appreciate it thanks for coming on thanks for sharing of course thank you and if you found this helpful
and could give us a thumbs up down below as well that would be
super awesome and that’s all for today so have a great rest
of your day and I’ll see you in the next video

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