Carter Thomas (@carterthomas) started as a marketer and strategist in the mobile app space, publishing over 1,500 apps on multiple platforms that have generated 18M+ downloads. Now he educates the curious about cryptocurrency and blockchain technologies via videos and a podcast under the Coin Mastery banner.
What We Discuss with Carter Thomas:
- A primer on cryptocurrency and blockchain so you can understand what people are talking about even if you’re not interested in investing.
- Beyond finances, how blockchain can be used to better secure everything from identity to medical data.
- Why it’s important to understand this technology now instead of waiting for it to saturate the markets of the mainstream.
- The pros and cons of cryptocurrency trading from the perspective of the vendor as well as the consumer.
- How cryptocurrency is being used today to counteract the hyperinflated conditions of Venezuela’s traditional economy.
- And much more…
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Not long ago, it seemed like you couldn’t tune in to any notable news source for 10 minutes without being pelted with buzzwords like “cryptocurrency,” “Bitcoin,” and “blockchain.” And then, almost overnight, they disappeared from the headline circuit and receded into back-page obscurity. But are cryptocurrency, Bitcoin, and blockchain just dead remnants of get-rich-quick hype, or dormant portents of the economic landscape to come?
For episode 79, I’m joined by Coin Mastery founder Carter Thomas to talk about the basics of cryptocurrency and blockchain technology, what we can expect from them in the not-all-that-distant future, and specific actions you can take to become a better investor, trader, and decision maker. Listen, learn, and enjoy!
Please Scroll Down for Featured Resources and Transcript!
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More About This Show
Thanks to security concerns, you won’t get far if you try calling Coin Mastery founder Carter Thomas on the telephone. While he’s always taken online security seriously, there’s no shortage of victims in the cryptocurrency community being robbed regularly to remind him to remain vigilant.
While Carter admits it’s cumbersome to have phones dedicated to certain online tasks and none of them utilizing his actual phone number, it makes it even more cumbersome for any would-be hacker to successfully rip him off. A better target would be someone who doesn’t bother using two-factor authentication to protect his or her cryptocurrency assets and feels their Gmail password is probably secure enough to use for this purpose — and every other online service.
Sound like anyone you know?
“Get your coins off the exchanges, put them into a hardware wallet, lock it up somewhere, have a dedicated computer,” says Carter. “At the very least put two-factor authentication on it. I don’t care if you have 50 bucks or two million or whatever it may be — it’s just so critical.”
What Is Cryptocurrency?
If you’ve been nodding along in polite company whenever cryptocurrency, blockchain, or Bitcoin have been mentioned and secretly hoping nobody would quiz you on what any of it means because you have no clue, you’re in luck that Carter’s here to explain it all.
“It started as a payment system,” Carter says. “The vision of cryptocurrency — especially of Bitcoin — was ‘let’s revolutionize payments, banking, and money.’ And that has evolved really with Ethereum, which is a new form of blockchain, a new technology that came out a couple of years ago. That’s changed into the ability to change economies — micro-economies, networks, and how networks are used and integrated.
“That is starting to evolve into changing the way that companies really behave — how stocks are being issued and making up companies, how people are breaking the value of companies down. So I think a more accurate term now is crypto assets.
“So Bitcoin, being the original and the biggest still has this idea of moving money around, holding money, censorship resistance, everything around it. But the whole cryptoworld is really just a way to take ideas that ordinarily had one model becoming a company and now you have this whole new way to create value through that company.”
The very reason cryptocurrency was a turn-off for early adopters — that it could be used by terrorists and criminals — is the very reason it has the potential to be so valuable to present and future economies: it’s a threat to established orders that can’t ultimately control its value.
“I think there’s two big phases of this crypto revolution,” says Carter. “I think that we are phasing down from the first chapter, which is the hype, the get-rich-quick scheme idea and we are beginning the next phase — the Spotify phase” [in contrast to the wild west Napster phase].
Listen to this episode in its entirety to learn why people who are disappointed they missed phase one should rejoice that they’re still early enough to the party to get in on the ground floor of phase two, how cryptocurrency has the power to disrupt the status quo once it’s understood and embraced by the mainstream, how the blockchain works to secure crypto assets in a way most initially find counterintuitive, how Venezuelans are using Bitcoin to overcome the hyperinflation of its traditional economy, non-financial applications for blockchain technology, and lots more.
THANKS, CARTER THOMAS!
If you enjoyed this session with Carter Thomas, let him know by clicking on the link below and sending him a quick shout out at Twitter:
Click here to thank Carter Thomas at Twitter!
Click here to let Jordan know about your number one takeaway from this episode!
And if you want us to answer your questions on one of our upcoming weekly Feedback Friday episodes, drop us a line at firstname.lastname@example.org.
Resources from This Episode:
- Coin Mastery on YouTube (Videos)
- Coin Mastery on iTunes (Podcast)
- Carter Thomas at Instagram
- Carter Thomas at Facebook
- Carter Thomas at Twitter
- How Do I Set up Two-Factor Authentication?, Coinbase
- What Is Blockchain Technology?, Coindesk
- Free Course: How to Buy Your First $100 worth of Bitcoin, Coin Mastery
- How to Buy Ethereum (Eth) Coins, Coin Mastery
- 335,000 Banned Fans: The History of Metallica’s Costly Napster Battle, Ultimate Classic Rock
- Venezuela: The Price of Bitcoin is Now Doubling Every 18 Days, Bitcoinist
- How Does Bitcoin Mining Work?, Investopedia
- U.S. Senator on Equifax Hack: ‘Somebody Needs to Go to Jail’, Reuters
- Why Criminals Can’t Hide Behind Bitcoin, Science
- TJHS 25: Joshua Fruth | The War on Money Laundering and Why You Should Care
- What You Need to Know about Taxes and Cryptocurrency, Forbes
- Bill Gates on ‘The Internet’ in 1995, David Letterman
- What Bill Gates Got Wrong About the Internet in the 1990s, Inc.com
- Ray Dalio: Short Term vs. Long Term Debt Cycles, Money Panda
- How to Start: A Gary Vaynerchuk Original
- The Quiet Master of Cryptocurrency: Nick Szabo, The Tim Ferriss Show
Transcript for Carter Thomas | Top Cryptocurrency Tips for New Kids on the Blockchain (Episode 79)
Jordan Harbinger: [00:00:00] Welcome to the show. I'm Jordan Harbinger. As always, I'm here with my producer, Jason DeFillippo. In today's conversation, we're talking with my buddy, Carter Thomas. He started as a marketer and strategist in the mobile app space and he's done something like 1500 apps, but we're not talking about apps. He got obsessed with cryptocurrency like many of us, and of course blockchain technology along with it and started teaching his friends about it, including me, on his YouTube channel and podcast, and the rest is history. He's amassed a huge following there and his podcast Coin Mastery, where he's taught us a lot about trading concepts as well as how to manage emotional swings and trading. But this isn't a finance episode. We recorded this episode at the height of blockchain and Bitcoin hysteria, so it's kind of fun and interesting to release it now while things are in a little bit of a low, because I think the wisdom and knowledge holds up really well.
[00:00:50] Today, we'll get a primer on cryptocurrency and blockchain. This isn't just Bitcoin and idiots like me funneling away tens of thousands of dollars for zeros and ones, or these days mostly zeros and we'll also discuss why blockchain isn't just a fad or a trend. It's also not just about money. We'll soon be using blockchain tech for everything from identity to medical data and further, we'll outline why this stuff is important to understand now instead of waiting for it to come at us and how markets which are made up of people are so easily manipulated and how we can protect ourselves as well. Don't forget, we have worksheets for today's episode so you can make sure you understand and solidify your understanding of everything that Carter is teaching us here today. That link is in the show notes at JordanHarbinger.com/podcast. All right, here's Carter Thomas.
[00:01:39] As you walked in, we were just talking about how we were trying to coordinate some logistics and I'm like, “Oh, I don't have your phone number to send him a text”, and Jen was like, “Actually he use a telegram”, and I thought, “Of course, he uses telegram”. Crypto guy using telegram, probably doesn't even know how to make a regular phone call anymore except when he calls his mom, you know, that's so classic. But we were talking about security, part of the reason, the main reason is because no one has your phone number now. You got a new phone number and it's on lock and nobody's got it. And I thought that's a really good idea. And whenever I tell people about security stuff, they tend to think, “Oh, I'm not that big of a target.” And now you could buy a hundred bucks worth of Bitcoin or maybe a hundred bucks worth of Bitcoin in 2013 you could be a huge target. And even if you think you don't have that much in crypto or you think you're not that big of a target, I only have 20 grand and Adda or whatever, that could turn into 200 or $2 million in a few years. Or someone could just say, “Screw it. You're an easy target because I have your phone number and I can send you a phishing email and get it.” So tell me a little bit about why and what sparked that for you? Because you're very public with trading large amounts of crypto, which could be millions of dollars or it could be 300 bucks at a time. Nobody knows, that's worse for you.
Carter Thomas: [00:02:56] Yeah, I've always been pretty careful like all the way back to the beginning of being an entrepreneur, which you know, eight years now, just crossing the T's, dotting the I's and always preparing for the worst kind of situation. And so as I got into crypto, I walked in there like pre-K, security first, then I'll figure out the rest of all this. And yeah, it's sparked with people just being hacked here and there. I mean, every two weeks you're seeing somebody in the crypto community get attacked like a big name or somebody's super unfortunate. There's a lot of simple steps that can be taken to make sure that sort of thing, like the chances of it happening are very, very small. And for me one thing was, “Okay, let's get a dedicated phone for this. Let's get a dedicated phone for that. Let's get a dedicated phone for it”, you know, multiple points of breakage.
[00:03:48] And part of that was changing a phone number and only using services that don't require your phone number, things like that. It's cumbersome, which I think stops a lot of people from doing it. And I'm sure there's people out there that have tons of crypto, but you know, way more crypto than I could ever dream of having that right are more cavalier about it. And I'm pretty kind of do-my-own-thing guy, but I just tend to focus on that side of it.
Jordan Harbinger: [00:04:15] I thought that was an interesting sort of way to begin because the way, of course, I heard of Bitcoin in 2011 gave zero EFS about it, right? 2012, 2013, 2014, 2015, 2016 and then a buddy of mine can't stop looking at his Coinbase app during sushi. And I'm like, “What are you doing?” And he goes, “I'm telling you, I threw two grand into this thing called Ethereum in January.” And I go, “Oh yeah, my friend's son invented that”, and he goes, “Would you __[indiscernible][00:04:45]?” And I went, “Nah, I'm going to do it later or something. I don't know. She told me a couple months ago”, and he's like, “Let me tell you what happened over the last five months.” And I just went, “Arrrghh! Damn it.” You know, it would've been like 50X or something or 20X whatever I had put in. And the funny part is I was talking with my friend and I go, “All right, well aren't you worried about this? I mean, where are you keeping it? Because I didn't understand how the whole blockchain thing worked either.” And he told me where his money was and I won't get in to too many details, but suffice to say that it was worth more than his house, the amount of crypto that he had, Ethereum especially, and he was not using two-factor authentication.
[00:05:22] And I said, “Well, hopefully you don't use the same password that you use for like your Gmail.” And he was like, “Yeah, I should really change it.” And I just thought, “You have like $2 million worth of this stuff or something”, some nebulous number that I won't even, I didn't even ask him because it was, you know, like company, ‘and you're using the same security protocol that you would use if you made a Fiverr account to hire somebody to make a meme for you.’
Carter Thomas: [00:05:47] Yeah, that has been one of the most shocking things is, you know, every week, maybe for two weeks now I'm like, “Get your coins off the exchanges, put them onto a hardware wallet, lock it up somewhere, you know, have a dedicated computer, you know, go as extreme you want, but at the very least, put two factor authentication on. I don't care if you have 50 bucks or you know, 2 million or whatever it may be -- it’s just so critical.” And a lot of people are just like, “Oh, I'll do it tomorrow.”
Jordan Harbinger: [00:06:14] I agree with the I'll-do-it-tomorrow mindset. I mean, it's a bad mindset to have, but I totally get why people do it. And I want to back up the truck though because right now I can imagine my producer going, “Tell us what you're effing talking about right now”, and I think that we should do a little bit of a primer on what crypto is because people have heard of Bitcoin, but people don't really know that Bitcoin is not, crypto is like this giant circle. Bitcoin is like a pinhead dot in it. People don't understand what blockchain is, they don't know what crypto currency is. They might know kind of what Bitcoin is and they think it's like PayPal.
Carter Thomas: [00:06:48] Sure. It started as a payment system, right. The vision of cryptocurrency, especially of Bitcoin was -- let's revolutionize payments, banking, money. And that has evolved really with Ethereum which was a new form of blockchain, new technology that came out a couple of years ago. That's changed into the ability to change economies, micro economies, you know, networks, how networks are used and integrated and that is starting to evolve into changing the way that companies really behave, right? How stocks are being issued and making up companies, how people are breaking the value of companies down. So I think a more accurate term now is crypto assets. And so Bitcoin, being the original in the biggest, still has this idea of moving money around, holding money, you know, censorship resistance, everything around it. But the whole crypto world is really just a way to take ideas that or nearly had one model becoming a company and now you have this whole new way to create value through that company.
Jordan Harbinger: [00:07:53] It's been confusing I think for a lot of people, even technically minded people, because they think, “Okay, this is a currency that's not controlled by a bank.” And unfortunately one of the reasons that I didn't get Bitcoin earlier was because a lot of my friends in three letter agencies went, “This stuff is used for terrorism. It's used by criminals. It's not going to be something that a lot of people are using because the government's going to get involved and it's going to be, you know, we're going to see a crash.” And I didn't realize that that exact sentiment is why it's going to be more valuable because it's actually a threat to establish orders that can't really control it. It's kind of like when was it Metallica was like, “We're going to put a stop to this MP3 sharing business.” And it's like, “Nope, you weren't just going to draw a ton of attention to it and everyone's going to do it.” Now it's Spotify. So Bitcoin or cryptocurrency in general is kind of in the E-Donkey what is it views or a Napster phase right now? Not even probably in the Napster phase, and the Spotify phase is five to 10 however many years away. But it's coming. And what I mean by that is you think Apple Pay on your phone is cool. Wait until you can pay cents at a time or millions of dollars at a time with virtually no fees instantaneously over international borders with the same ledger. And if you don't get that, I understand why because it took me years to, and I worked on Wall Street and I know tech stuff reasonably well, and yet here we are late to the party, like a lot of other people.
Carter Thomas: [00:09:25] I think there's two big phases of this crypto revolution. I think that we are kind of phasing down from the first chapter, which is the hype, the get-rich-quick scheme idea. And we are beginning the next phase, right? The Napster or the Spotify phase, the next huge one. So I think for a lot of people they may be like, “Aw man, I missed the $20,000 Bitcoin run”, but they’re so early to the next run. So there's going to be another huge wave. It's going to be way bigger. There’s going to be more options. So it's going to be harder to pick the winners, but it's going to be bigger. And I think the other big piece is that, and this is when the mass adoption will happen, is right now everyone thinks about, “Well, is it going to replace money? How could it replace money, it’s not [indiscernible][00:10:11] a bank. But with the crypto assets, the way the blockchains work is you can start to replace things like advertising, right? So you go on YouTube right now and you see an advertisement, you got to wait five seconds and you click.
[00:10:25] There's a middleman that's funding the creator and connecting it to the viewer. Now if you use something like a crypto asset with all the technology and all the details behind it, now the user can actually have a token where they can pay the creator directly and they can cut out the advertising industry that unlocks $100 billion in revenue that just was inefficient before. So there's all these new ideas that are just very, very slowly starting to get some traction. People starting to be like, “Wait, this is actually a real thing. This is a real technology that can make real money.” Because that's the big piece is that even when people get the technology, like, “Yeah, but show me where the revenue is”, right? How is this worth this much money? And once that starts happening, then it's going to be the real thing.
Jordan Harbinger: [00:11:14] Right. Because we don't necessarily need it to equal something in dollars. We just have to have a function for the token. And can you tell us, where's my blockchain? Because of course, one of the first things that people ask me when I tell them to put their coins or their tokens on a hardware wallet like we were talking about with security, they say, “Yeah, but what if I lose this thing? I'm never going to lose my computer. I leave it at home. But what if I lose this little thing?” And I had to have this explained to me as well, your currency is not on that little thumb drive. Your currency's not on your phone. It's not on your computer. It's on the blockchain, which is one of the reasons why it's so useful and of course why it's so freaking risky if you don't handle it correctly. It's kind of like having your money in every single branch of every single bank or every single business in the entire planet at the same time.
[00:12:00] And nobody can lie about it, but people don't really get that. People, even very intelligent people that I try to explain the blockchain, they just go, “Well, if everyone has it, it's not secure.” When really it's the other way around. Can you tell us kind of what the blockchain even is, without using that please?
Carter Thomas: [00:12:14] Totally. So I think an interesting analogy is how ATMs work. So you could walk into any ATM right now and theoretically, there is money inside that ATM, but until you put your private ATM card in with a password, you can't get access to that money, right? So you're essentially saying, “This is how much, here's my account, you know, I can access it now.” But that money is being registered against one central spot. So maybe you have a Chase account or Bank of America or whatever, and you rely on that bank to verify that information for you.
[00:12:50] With the blockchain, that information is actually public, but it's all encrypted. So any given moment you can go out and see the 10 billion lines of stuff that's saying, “Hey, this is everything that's on Bitcoin and here are all the different transaction values here.” The wall is sort of available. But to get access to it, you have to put in your own ATM card to redeem it from the blockchain. And that blockchain is being redundant on thousands of computers. So if one goes down, it doesn't matter. Versus if Bank of America goes down…
Jordan Harbinger: [00:13:21] Yeah, that ATM is not helping you.
Carter Thomas: [00:13:22] That's -- you’re done. You know, I mean the FTC may be, but you know. Yeah. And so that's the difference is that it's just being copied so many places. But the idea of going up and redeeming your amounts is the same.
Jordan Harbinger: [00:13:35] A lot of people that I know don't really see the need for this. And I totally understand that and I think it's going to become apparent later. It reminds me of when I told my dad, and I've told this story on my show many times, but when I was I think 13 or 14 I said, “Dad, we've got to invest in this Yahoo thing because you can search for things on the internet.” And it was the first sort of type in a word that you want to find and it will find documents with that word in it. And he said, and I totally understand his logic, 2020 hindsight, “No one's going to use this. There are libraries everywhere and everyone knows how to find the books that you need.” And I thought this is not the way that I'm thinking because I'm learning the Dewey decimal system in middle school here and I hate every second of it.
[00:14:13] And this I can do from home. It's a little slow because I have to use America On-Line dial up. But that's kind of the phase that we're in now and people don't really see the need for this. But if you go and we have show fans in Venezuela, this is not a country that's well-connected on the internet. It's not a country full of rich people. They're undergoing essentially a revolution right now, even if it's a slow burn. And there are people there that are using mining rigs to mine Bitcoin and using that to try to get foreign currency because it's really the only thing that's between them and starvation is this like little ant miner of the size of an iPad or something. And this is their lifeline because they don't have the stability around them of anything else. But what it sounds like blockchain can do is bring stability like that to places that don't have it but can also invent entirely new industries.
[00:15:02] And this is something I don't totally understand. Maybe you do. There are other applications for the technology other than currency, right? There's medical records and identity data. I remember I bought a ton of, I think it was like Verge or something a year or less ago. That was a really good purchase by the way. You know, I remember going, “Oh, nothing's doing anything”, and I just forgot about it. Got really busy. And then someone said, “Hey, you should sell some of your Verge because it's like 21X what you paid for it.” And I went, “How much of this did I buy? All right, here's my mortgage payment for the next year.” And there's a lot of really interesting stuff going on with medical data. Things that people theoretically don't want on the internet but are actually much more secure on the blockchain. Why is this the case?
Carter Thomas: [00:15:44] That is the thing, right? I think the currency solution is going to be a big deal and it already is for those reasons -- censorship resistance and for just store value and potentially for payment processing. But I look at anything that could benefit from greater efficiency and or transparency, which is basically everything, right? Every business, every industry if it was massively efficient, if everything happened in real time and like, you know, identity, medical records, things like that and the amount of money that would be unlocked from those kind of secondary industries that are built on protecting your data or you know, securing the data or whatever would be gone because all of the data would be encrypted, but it would be public, right? And so you could go get access to the data, you could verify that the data is there, you just wouldn't know whose is whose until you put in your private key to get your own data.
[00:16:42] And so you'd really remove, you know, for lack of a better term, you're like you'd cut the fat from the business world, which is just an unbelievable amount of money that would be replaced or displaced I should say it with a superior technology that's faster, easier to use and you know, just change, revolutionize everything.
Jordan Harbinger: [00:17:02] So instead of having Equifax protect my data and then lose it and then not report it for three months while the executives sell off their stock shares and hopefully those bastards go to jail for it -- we'll see about that. We could actually have it all on the blockchain. It could be verified by any party, anywhere in the world, in real time, cost basically nothing and be monitored by us or by anybody in real time with the transaction costs of a few electrical signals essentially. And it would eliminate the need for credit bureaus and things like that. And that's just credit checks. We also have medical data. We have identity verification for passport control, immigration. All of this stuff could be linked to us as people, which is a little 1984 but I feel like every bit of revolutionary technologies, kind of 1984 in a way.
Jason DeFillippo: [00:17:55] You're listening to The Jordan Harbinger Show with our guest, Carter Thomas. We'll get right back to the show after this brief word from our sponsors.
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[00:19:42] And you can choose from over 100 mobile-friendly templates so your site will look great on any device like your smart phone, your tablet, your desktop, whatever is in vogue this week -- maybe your table, maybe your kitchen table one day will have a web browser and it'll look great there too. HostGator gives you a ton of add-ons so you can do things like increase your search engine visibility without being an expert in SEO and you can also integrate PayPal buttons really easily so customers can give you a tip or buy some stuff from you. Whatever you have, it's easy. They just do it for you and you'll also get a guaranteed 99.9% uptime and their support team is there to help you with any issues you experience 24/7, 365. HostGator is giving you guys and gals up to 62% off all their packages for new users. Just go to hostgator.com/jordan right now to sign up. That's hostgator.com/Jordan. Thanks for listening and supporting the show. To learn more about our sponsors and get links to all the great discounts you just heard, visit JordanHarbinger.com/advertisers. We also have an Alexa skill so you can get inspirational and educational clips from the show and your daily briefing. Go to JordanHarbinger.com/alexa or search for Jordan Harbinger in the Alexa app. And now for more from Carter Thomas.
Jordan Harbinger: [00:20:51] But I feel like every bit of revolutionary technology is kind of 1984, in a way.
Carter Thomas: [00:20:56] Yeah, I mean, I think it kind of has to be, there's obviously a paradigm shift of this, right? You know, the mindset shift of what's happening and being able to be okay with data being public and realizing that it doesn't change your privacy implications and that partly is generational. It's partly just technological, but I think that's the key, is being able to be okay with data being out there, knowing that it's still secure. In fact, it's more secure because it's verifiable and no, it doesn't have implications on you personally.
Jordan Harbinger: [00:21:32] Yeah, it is funny how we feel like our personal proximity to our data makes it safer. Like, “Oh no, that's safe. It's under my mattress.” What? Are you home right now? No. I mean this is much safer being everywhere at once. And you're right, it's hard to wrap our mind around the fact that if millions of computers have copies of the blockchain, it's actually safer than you having one copy. Or there's one in a safety deposit box in a bank that you just pray never burns down or gets misplaced somehow. And us, being able to keep this also ensures that our transactions with other people are kind of always an escrow in some way, right? So if I'm doing business with you, you can't really not fulfill your end of the bargain because it's almost like it's running on a computer that doesn't care that you're mad at me today or that you should change your mind after I already delivered the goods and services. It's automated.
Carter Thomas: [00:22:23] That's it. And that's a huge piece. You know, the idea of smart contracts or the logic that's built into the blockchain, which is really what Ethereum was built on -- the idea of solving that. And I think that that brings up a really good point where Bitcoin especially has a reputation of, “Oh, this is only used by criminals. It’s used on the dark web.” When in reality , there is nothing more traceable than cryptocurrency. I mean, absolutely everything has a paper trail versus if you got a big block of cash, you're not finding out where that goes. You know, like that's disappearing pretty quickly with the exceptions of a few privacy coins that, you know, don't necessarily have the paper trails. But I think that's also a big piece of it is, it really flips the script on people when they say, “Oh, it's dark web anonymous coin”, and then you realize, well actually it's not, right? You might actually enjoy having cash because of that reason.
Jordan Harbinger: [00:23:15] Right. You can literally see every purchase or every transaction, I should say, that someone's made. And I think that's fascinating because not only is it going to allow for crazy studies of economics in the future because you can see what everyone's doing. You also have the security element of being able to have everything sort of in the spotlight and I'm sure that the NSA slash maybe not even just them, have computers that are going, “Oh, let's just create some sort of visual map of every single blockchain transaction on every chain for every majorly adopted coin”, especially because you can always do it retroactively. If I've got a copy of the blockchain for a new coin that starts tomorrow, but nobody adopts it for a year, I've still got that blockchain on my computer and it can get vacuumed up by a security service and examined and we can see the trail of all the cash and we did a money laundering episode on this show recently and Joshua Fruth talked about how international criminal organizations are using all of this. If you're resisting cryptocurrency because you're worried that you're supporting criminal activity, find like etherscan.io or whatever and look at the transaction. This is literally the least successful way for criminals to move money around and try to get away with it because you can see every single transaction.
Carter Thomas: [00:24:29] Totally. Yeah. I mean, the SEC just did a big deal with CipherTrace, I think, is the name of the company where it's exactly what they're doing. They're saying, “Give us a full audit on everything that's ever been run on every public blockchain out there. We're going to be able to match it up to all the transactions we need so that we can determine securities laws. The IRS will probably get their hands on that.
Jordan Harbinger: [00:24:50] I can't wait for that.
Carter Thomas: [00:24:51] You know? It's like, then all of a sudden there's a whole new set of challenges and solutions within the blockchain world. You know, there's a lot that comes with this sort of idea, this paradigm shift, which is also why I think it's going to take a while before it really starts to go big.
Jordan Harbinger: [00:25:11] How do you counter, I mean not that you spend a lot of time doing this, but for our purposes here, how do we counter the people that say, “Look, this is a fad. It's not going to catch on”, because there's a lot to be fair, there's a lot of smart people saying that. Sure Bill Gates I think said it about the internet or somebody said it about the internet back in the day, some sort of notable and we got to Snopes this, right? Because it might not have been him. They said the internet is a fad, but this, how do we know that smart people who know about those massive glaring errors are not wrong or are wrong about this also being something that's just going to crash and burn at some point?
Carter Thomas: [00:25:44] Well, I think there's a few pieces of it. The first thing I would a hundred percent freely admit is that, any of the coins that are out right now could all go away. But I don't think the technology will ever go away. So in five years -- Bitcoin, Ethereum, you know, you've got it on the top 10 list -- that could all be completely different than what it is. Similar to Quasi, similar with the internet, this was like in 95 or whatever it may be. So I think that's one piece of the puzzle because when you ask the same people, “Hey, do you think blockchain technology is worthless?” That number gets very, very, very small. The thing that people right now are like, “Oh, the valuation's ridiculous.” You know, the fact that people that have no skills, right place, right time or making tons of money, this is the biggest bubble. Because when you look historically, bubbles are really just built on moments in time when valuations can't be compared to anything else, right? You create your own valuation, which is why the bubble can happen, right? And that is what causes a lot of the skepticism. So as soon as that gets worked out, like how to value crypto assets and who knows how that's going to play out and what assets will get valued, it will gain the traction because there's the technology behind blockchain. I've yet to meet someone who thinks of that is worthless. There's nothing there.
Jordan Harbinger: [00:27:06] Can you explain in some degree how the blockchain works in sort of layman's terms because okay, everyone has a copy of it. So what, I have to leave my computer on 24/7 in order to be up-to-date with everything? I mean, that's the part that I think a lot of people have trouble wrapping their head around.
Carter Thomas: [00:27:21] Yeah. So let's say those are called nodes, right? So let's say there's a thousand nodes out there. They all have a copy of the Bitcoin blockchain, just as an example. And let's say you have a wallet, your wallet does not need to have the entire blockchain on it. It just needs to be able to ping one of the computers that has the blockchain and be able to verify, “Hey, all the blocks are there, looks good, takes one second to do.” And then if you have your own private key on there, your key can match against any of those blockchains and say, “Oh yeah, here's my balance in my wallet”, so to speak. So there's kind of like these master people, right, who have big computers running the nodes. And then you have the regular people like ourselves who just have wallets on our phones, on our computers, on websites, whatever, that can just ping it to verify that it's still there and that we can control when we want to, you know, send a transaction to the blockchain. But all that processing can get done somewhere else.
Jordan Harbinger: [00:28:18] And so we're writing in the end of the blockchain, right? So we're only putting links on one end of it, at a time. So you can't go in the middle and sort of splice anything in. And that's what makes it, is immutable really the right term for this? So that's what makes this more secure, right? Is that we don't have to figure out, is this a legitimate copy of the blockchain? Because since so many people have it, they can constantly compare that chain to each other. And if it doesn't look right, then I would assume at some point they get that that sort of black sheep chain gets the boot from the network.
Carter Thomas: [00:28:51] That's also about the, you know, integrity of the network because like some people like to say, “If you want to shut down Bitcoin, he has to shut down the internet.”
Jordan Harbinger: [00:29:00] Right, which the whole thing is designed to be nuclear proof, right? Literally.
Carter Thomas: [00:29:04] Yeah. And so you'd have to shut down all 1000, forever. But that is one of the big, big pieces of it. Yeah. You can look back, back to the Genesis block in 2008, I think it was. Look at the first mined Bitcoin and that's it.
Jordan Harbinger: [00:29:19] That's incredible. Yeah. And I think that should signal to people just kind of why this will be important in the future. Just having that immutable ledger that really truly is something that you could hack one with a great amount of effort and you'd have to hack every single other note at the exact same time without knowing even where they are, who they are. And then you'd still run into problems because someone would have an old copy on a computer that's offline and it would go, “Wait a minute, this thing hasn't been touched in three years. How come it's different back here?” So you'd always, always have the record. It's like having seven bajillion copies of the same video. You play them all at once and someone goes, “Wait a minute, how come this little piece is spliced in here? That obviously didn't really happen. Or either that or every other copy of this video is incorrect, which one is more likely?”
Carter Thomas: [00:30:06] Right, exactly.
Jordan Harbinger: [00:30:07] So I think that's brilliant and that's something that you can really only get with sort of high powered math and a high bandwidth internet and things like that.
Carter Thomas: [00:30:15] Yeah, and I think that that's one of the overarching themes of, especially with Bitcoin, but really with all the crypto currencies and crypto assets is that it's international. It's a global thing. So you could have those thousand nodes running the blockchain. You could have 50 in America, 50 in Brazil, 50 in Germany. I mean it can be everywhere. And that's when it gets really interesting from a censorship resistant standpoint of, “Hey, we want to shut this down.” So the idea of like the Venezuela, maybe they tried to shut down Venezuela but they can't shut it down in Chile or shut down Australia. So you got all these redundancies all built in. It's very different from equities where it's very clear that the security is a, let's say, US company. The securities laws where you can trade the security, you can shut them down. So it opens up a whole new world, for basically all the agencies out there.
Jordan Harbinger: [00:31:08] So crypto, it tanked in the last couple of months. The currency valuations anyways, obviously blockchain companies are still going full steam. People seem to forget that, by the way. Have you noticed that? it's like, “Oh, Bitcoin, Oh, it's low now.” So everyone just sort of stops. It's like, no, people that you know that are just trying to make money every day, don't talk about it as much anymore because they went back to work or they're on their mom's couch trying to figure out what the next thing is. But this type of thing, when you see this, I know the answer to this question already, but are you worried? Right? Are you worried? “Oh no, this is coming to a halt”, because like we discussed before, a lot of smart people think this isn't going to work or it's foolish. When you see these downturns, what are you looking at? Because I know that you look at the markets as a whole and not just, “Oh this is what happened this week. Guess I'm shutting down my YouTube channel.”
Carter Thomas: [00:31:55] Sure. As you can imagine, [indiscernible][00:31:57] not worried about this long-term? But I do think, I've always looked at crypto as a social phenomenon more than a financial one. And even though 95% of what I talk about and want to think about has to do with tech and pricing, the basis of all this is that there's some deep-seated revolution, you know, generational level revolution and guys like Ray Dalio talked about this all the time, kind of once-in-a-generation type of cycle. And this may be the catalyst for that. But I think what's the most fascinating is seeing what happens during the downturn, especially when it happens this quickly to people that have never really invested before. And that's one thing that's been super interesting on my end is I see so many thousands and thousands of people, they've never bought stock before. You know, they've never like to put it in bond index fund. And so they go into crypto and then they go read the intelligent investor and they're like, “Oh well, I'm just going to buy and hold. That's what you do in the stock market.” And that to me is really fascinating because I'm like, “This isn't the stock market. This is totally different.” And watching what happens as it goes up and down, especially as it goes down from an emotional standpoint, like the psychology of all of these people that have never really experienced not only a crash, but just an investment and feeling what that's like, that changes a lot of the demand curve, right? It changes a lot of the price. And so I don't think it necessarily is down whatever, 70%?
[00:33:34] I just think that it was massively overvalued. And so now we're getting down to the reality, the kind of like, “Okay, here's where we're at. And maybe it goes back up. Maybe it comes back down. Who knows?” But what I do know is that over the long-term, investments aside, there is enough people, there are enough people I should say, who believe in what it represents. There are enough people that go on Twitter and be like, “This is going to take down the banks. This is going to free me from the government.” There's enough people that own enough crypto that will not let it die and that is, it could go down to 50 bucks and there'll still be enough people that will keep the tech. And that is why I don't think it's, you know, I don't know, if blindly holding the entire time is the way to do it, but I think
Jordan Harbinger: [00:34:26] That's my strategy.
Carter Thomas: [00:34:27] I'm going to think that if you're in it for a long haul, not about, I mean, it's a good move.
Jordan Harbinger: [00:34:32] My strategy generally is, “Wow, this is really depressing to look at. I'm just not going to look at it for like four months.”
Carter Thomas: [00:34:37] Yeah, which is probably, I know for most people, I would say that's the right thing to do.
Jordan Harbinger: [00:34:43] I’ve noticed and I'm sure you've seen this, because you're teaching people how on coinmastery.tv. You're teaching people how to make pics and think about investing. Think about the mindsets. It's got to be fascinating for you. Just as it was for me, which was one of the things that sparked this interview. Watching people who really know better. I mean I have friends that make millions of millions of dollars and they'll buy something and they'll go, “Damn it! It's going down. I got to sell it.” And I'm thinking, what are you talking? Have you never handled money before? What is wrong with you? Or “Oh, it's going up. I'm going to chase that green candle. I'm going to chase that upward trend.” And I'm just thinking you are one of the smartest people that I know, and look at you, just high on crypto right now. Totally high on your valuations. You have chicken block folio. I can have a conversation with you. At the dinner table, people get so hooked on this and then it goes down and you see these both sophisticated and unsophisticated investors making massive emotional mistakes both with buying and selling. And I think that that is probably not a good sign, but maybe we just all need to learn the hard way. I don't know. What do you think about that?
Carter Thomas: [00:35:51] I think that, you know, markets are markets and I will say one of the greatest parts of this journey for me has been how much it's forced me to study history and how many books and just diving in, not only of bubbles, but just how people have reacted through these things and talking to people that have been through these different scenarios. But I think when you drill into the micro decision-making of everyone, you know, the day to day decisions, I think crypto represents something very emotional to people. I think because of the speed and the volatility of it all. I think that there's a lot of people that feel like this is their only shot and that they're never going to get a shot like this again in life.
[00:36:39] And if they don't get it right this time, when are they ever going to get it? They know they got to go back to a life of working 80 hours a week or working 50 hours a week at something you don't like to do. My personal perspective is there's a bit of escapism in there where crypto represents this -- the unicorn does. Yeah. Lambo is, but it just like freedom. That's it. Just like, “Oh my gosh, I'm finally out. I'm done.” And as soon as many people know, as soon as you feel like you're getting that, it's when it crashes, right? That's like how it works.
Jordan Harbinger: [00:37:17] Because guys like me and my friends go, “Oh crap, everyone's really happy right now. I'm going to sell some of this because I'm nervous.” And then people go, “Wait, did that just go down? Oh crap. This is the beginning of the end. Dump it.” Right? Yeah.
Jason DeFillippo: [00:37:31] We'll be right back with more from Carter Thomas after these brief messages from our sponsors.
Jordan Harbinger: [00:37:36] This episode is also sponsored by Stamps.com. We've been using this service forever here on The Jordan Harbinger Show and even before then. You can get practically anything on demand these days like our show, listen whenever you want, when it's convenient for you. You can even get postage on demand. All you need to Stamps.com and you don't have to go to the post office, you print and buy real US postage for any letter, any package, 24/7 – click, print, mail and done. Stamps.com will even send you a digital scale so you can weigh the letter in the package and print the exact amount of postage every single time. You know, no more like slapping on 20 stamps and no praying that it makes it to the destination. So we send swag all over the place when we had it especially and we send all kinds of things all over and it's really nice to get an exact quote and then just print it off and use it. And we've got a special offer for you, Jason. Tell them how to get that.
Jason DeFillippo: [00:38:27] Right now, use JORDAN for this special offer. That's right. We always like to use JORDAN for a four-week trial that includes postage and a digital scale. Go to Stamps.com but before you do anything else, click on the radio microphone at the top of the homepage and type in JORDAN. That’s Stamps.com enter Jordan. I'm not going to enter Jordan, that would be gross.
Jordan Harbinger: [00:38:46] Gross. Oh hey, by the way, I'm going to Fireside Conference in Canada here in September. Should be a lot of fun. Jason's coming with me, aren't you, Jason?
Jason DeFillippo: [00:38:56] Yes I am. I cannot wait.
Jordan Harbinger: [00:38:58] And Jen's coming with me. It's kind of like entrepreneur camping. I don't really know how else to explain it. It's a conference, but it's kind of an unconference. Imagine campfires and probably some beer and some good food and stuff like that and a lot of goofing around. No cell phones. It's not too late to register. This is not my event. It's the Fireside Conference. It's going to be a lot of fun. A lot of entrepreneurs and business folks and they've got 50 spots left. It's the final 50 as they say, and I just think it's going to be a really fun time. It's going to be sort of unplugged. It's going to be taking place about three hours from Toronto, Canada on 750 acres of private green space on a beautiful lake.
[00:39:37] So should it be a lot of fun. A lot of mindfulness slash mindless stuff like water skiing, canoeing, rock climbing, yoga, fitness bootcamps, meditation, real campfire chats, not the fake Fireside chats that are on a stage. I mean there'll probably be some of that too, but also lakeside keynotes and stuff like that, so should be really fun. A lot of cool people going. There's no VIP, there's no restricted access. Everybody's sort of hanging out together and you get a $500 discount if you apply and you're accepted. That's $500 Canadian, so it's September 6th through 9th and I'm looking forward to it. You can find info at firesideconf.com/Jordan, firesideconf.com/Jordan.
Jason DeFillippo: [00:40:18] Thanks for listening and supporting the show. Your support of our advertisers is what keeps us on the air. To learn more and get links to all the great discounts you just heard, visit JordanHarbinger.com/advertisers and if you'd be so kind, please drop us a nice rating and review in iTunes or your podcast player of choice. It really helps us out and helps build the show family. If you want some tips on how to do that, head on over to JordanHarbinger.com/subscribe. And now for the conclusion of our interview with Carter Thomas.
Jordan Harbinger: [00:40:45] And then people go, “Wait, did that just go down? Oh crap. This is the beginning of the end. Dump it.” Right?
Carter Thomas: [00:40:50] That’s it. Yeah. It's a very, very powerful emotion. I mean, FOMO is just so underrated for people, really all, you know, like even if you don't have that much money in it, you're like, “Oh, whatever, I'll be fine.” But man, you watch that price start going up and it's insane. Like, “How could I miss this?” You know, how could I miss? Because if this is the run, if this is the one that goes big and I missed this, how can I ever be okay with that? And you know, that's one of the hardest things to turn off.
Jordan Harbinger: [00:41:23] That's why every telegram group -- telegram is an app where a lot of people discuss cryptocurrency, I'm not sure why it's the number one app for this, but I think it's just the way that it handles groups and individual communication supposedly secure, way less secure than other apps. Yeah, TBD on that. That's another story. But you see people, at the height of these things, there's five or 10 a day, “Hey, has anyone heard of Carter coin? Where's Jordan coin? What about Wrecked coin?” And there's just one after the other, after the other, after the other. This one's big. This one's going to be huge. My friends said this one's going to be huge and you have what essentially like look like penny stocks, which scare it a lot of people away. But it sort of wraps into the question, “Is it too late for people to get into this?” Because look, I've been doing this for a couple of years or a year and a half now. You've been doing it for awhile. But the learning curve, in my opinion, going from when I knew nothing about it other than yes, I've heard of Bitcoin and I think I have some somewhere if I can find the file that has the wallet, to knowing how all this works, having deep roots connected into the industry, seeing some of the new products coming out, understanding the tech behind it to some degree.
[00:42:28] I feel like that all took just a matter of months because of the level of obsession that people have with this, including myself. But also I think a lot of folks think, “Oh, I missed the boat on that”, and I kind of think you didn't miss this like you missed free music on the internet, right? I mean you can still, there's always, always, always time, especially right now.
Carter Thomas: [00:42:46] The 2017 run into January 2018 run was obviously a unique unicorn event and I think it was a perfect storm of critical mass of people, of technology, which allowed for the speed and lack of regulation because that's really what the fact that these could be manipulated the way they were is what drove a massive amount of this growth. And so I think that moving forward we may have some interim, you know, three-week everything goes up by 50% type of euphoria, but I don't know if we're going to get a sustained across the board everybody-gets-rich type of situation or you know, a verge going up 8000% of revenue maybe. What I do think is going to happen now is that the entire market cap, so let's say market cap now is 320 billion,
[00:43:41] I think that the market cap may go to let's say 10 trillion in a couple of years. But the problem is there's going to be a schism where there's the financial side of crypto and there's the venture capital side of crypto. Because what one thing that you find out, especially in the United States with these kinds of situations, is that the regulators are not interested in creating new agencies. They're interested in taking the new stuff and boxing it in to what exists.
Jordan Harbinger: [00:44:09] Hammering that square peg through round holes.
Carter Thomas: [00:44:12] And what exists is securities laws for finance, I mean securities to for venture capital. So what I would tell people is that there's obviously still a huge, huge opportunities, but it's going to be more of a science to find the winners and it's going to look more like finance and venture capital. That being said, 97 to 99 that was all on New York Stock Exchange and those were still going up 900% so it's still possible to happen with the regulations in place. But I think that there needs to be another like kind of rebuilding of the support of the general faith in blockchain and crypto for that to kick off.
Jordan Harbinger: [00:44:53] Yeah, and I think you're right on that. And I also see huge gaps between newbies and advanced that get closed with record speed. I mean there'll be somebody, a friend of mine went to a meetup of yours a long time ago, I think it might've been the first one. It's like standing room only, hugely popular. And there'd be people in the room asking about, “Well, is China regulating this and causing all this fear, uncertainty and doubt. What do you think is this guy?” And then the next question is like, “How do I buy Bitcoin cash?” Right? Or something, [indiscernible][00:45:21] Bitcoin? And so there was this huge gap, but then you can find those same people who want what's a hardware wallet and in three months later they're telling you about how the tech of this one ICO is doomed to failure because it doesn't something something. You're just thinking the gap is closing so quickly.
[00:45:36] This is no longer teaching your parents how to dial into the internet. This is like, you can learn how this stuff works with just like you can learn how Spotify works if you've never used a music player on the computer before. Just like you can learn how an iPhone works by picking it up, messing with it for about 20 seconds and you go, “Yeah, I think I got the hang of this.” It becomes not quite as intuitive as an Apple product, but if this is the rough Wild West stage of it and you can figure it out by reading articles online and messing with it, then it's not going to get more complex. Most likely it's going to get easier, especially as companies decide to bring this to the mass market so they can make more money.
Carter Thomas: [00:46:12] Yeah, that's a huge piece. I mean from adoption, which I think is the next big thing in crypto is people using the products and the currencies or whatever it maybe, that's going to drive so much of the growth. And then the other piece is, yeah, the investment side, right? We've got thousands, if not millions of people that are, you know, technical analysts now. Yeah. Air quotes around that. Yes. And you know, people that have, you know, killed it on ICOs, think they're venture capitalists. And what you're going to see now is the people that are in those established industries are already seeing companies only opening up trading desks, are seeing venture capitalists get into cryptocurrencies, getting into the seed round stage. That's all going to fuse together and it's just going to become a more competitive space, but there's going to be way more money. I'm really excited about it. I thrive on that sort of thing. I love when it gets bigger and bigger and I think that, but I also think that as it gets more competitive, one thing that people are going to miss is that they're going to chase the tactics that worked in 2017,
[00:47:18] and even 2018 like, “Oh, let's talk on exchange. You get a 20% bump. That's my move.” “Oh, there's a fork come in.” “Oh, the price is going to spike if people want to get the airdrop”, like those tactics, they will die, you know, and then the lower quality coins will eventually die. All this stuff that kind of works, will stop working. And then the fundamentals of -- who's on the team? What problem are they solving? It’s just classic fundamentals of investing and of product development, which is stuff that just takes time to learn. You know, you can't just kind of open up Coinbase, you're an expert on. You have Fibonacci retracements or whatever.
Jordan Harbinger: [00:47:55] Yeah, Fibonacci...all that stuff where it's sort of, “Oh this is what the markets do.” It just to me it seems like reading tea leaves, except it sounds fancier than reading tea leaves. So people who are smarter believe in it, but it's still the same set of logical bias that you see anywhere else.
Carter Thomas: [00:48:14] I've come around kind of full circle on technical analysis in the sense that at first I was like, “This is what is this.” You know, there's a lot of lines like come on. Then I went all the way to the other side of where I said, “Wow, there's actually a lot of this is telling me everything I need to know.” And now I'm kind of in the point where it gives you a bit of a guide. It gives you some level of probabilities, but it's by no means is it going to…because everybody's looking at the same thing. Like, if everybody's looking at it then there's a whole game theory side of what happens when everyone looks at it. And so I think that that's another piece of the puzzle that's going to, you know, slowly work itself out. [00:48:58] Because you go talk to traders on equities or futures or Forex or whatever and you show them, “Oh yeah, yeah, I'm just going to draw ascending wedge or you know Elliot wave like dude…
Jordan Harbinger: [00:49:10] cup and handle.
Carter Thomas: [00:49:11] Yeah. Like what are you talking? This is a $5 trillion market, that does not work.
Jordan Harbinger: [00:49:15] Yeah. There's too many players, there's too many people and there's too many smart people trying to figure out how to turn your cup and handle into whatever, you know, it’s something else. “Oh, this flag up. Just kidding. It's a [indiscernible][00:49:25]. Just kidding.” Now we're going to be competing as computers that are betting about what we're going to do based on numbers that they can calculate in real time versus what we think is going to happen, which is not quite the same level of accuracy. On your channel and your YouTube channel, Coin Mastery TV, you teach a lot of mindsets. So instead of, invest in this -- buy this, this is what I'm buying. Which like you said, that was the first maybe two dozen episodes of your show. Now you're teaching mindsets instead of doing this and that, and I read on your Twitter ages ago that the reason you do that is because if you just tell people what to buy, one, they get pissed off when you're wrong, but two, they don't really apply anything. Can you sort of explain the psychology behind this? Because it seems like you're more interested in people learning how to do this or to teach a man to fish versus being Jim Cramer predicting, “Hey, Oracle's going to go up tomorrow. Hit the bell, the product announcements on tomorrow. I’m betting on this one.”
Carter Thomas: [00:50:21] I started this channel because I couldn't find information on the internet and I was really fascinated with crypto. I bought a little bit of crypto and I just wanted to learn. And so in Gary Vaynerchuk style, I was just like, “Why don't I document my journey here?” And I also had a pretty good amount of experience as an entrepreneur that I can hopefully apply and as an investor of venture capital a little bit, whatever. So the premise of the whole show is how do you make better decisions and capitalize on this revolution, financial revolution, technological revolution. And that's always been the foundation of how it started. But obviously, you know, people want to hear about, “Hey, what do you think of this coin?” So I try to blend those, but I think the big piece is that when I look at the bell curve and I know that 20% of people are going to win huge in crypto, maybe even 10% over the next couple of years, I tend to believe in, from my experience and just from researching and talking to people, the thing that gets people to that 20% in finance is the ability to connect dots, is the ability to see a set of things that are happening and say, “I know that this is going to impact this.
[00:51:39] This is going to impact this, this is going to impact this.” Just kind of like how macro trading works and the more I can help people do that, or at least give them insights into what I'm trying to figure out how to do because by no means, I'm just trying to do it like everyone else, you know? I think it helps a lot of people that are more naturally left-brained who are thinking, “What's the coin? What's the price? When do I like, what do I do? Give me the instruction book.” And I'm more about, Well there's a little bit of an art to this science that will help you stay at least at the level where you can keep winning over the long-term and that you don't wake up in April of 2018 and be one of the people to delete your Twitter account because you're done with crypto.
[00:52:23] Because you're done but you know, it'll never come back and you're over it. So I think that that's just something that I firmly believe in, like a value of mine that I've always have. Yeah. Teach a man to fish, but more just how do you stay at the top level and when everybody's making money because it's just like, “Oh, go buy this coin at this time.” It's hard to believe that. But I know where long-term you look at everybody, someone like hears this interview and you look at anybody who, you know, any people who were on these podcasts, they don't talk about the tactics. They talk about like the principles, the fundamentals, the mindset. I'm like, once you start with that and why are we…it seems like it should be a winning.
Jordan Harbinger: [00:53:07] How do you research a technology that most people don't understand? And what's your mindset when you research things that are so new that a lot of us don't really have any context for it?
Carter Thomas: [00:53:19] I think the first thing you start with is obviously it’s got to have a sick logo. I'm just kidding.
Jordan Harbinger: [00:53:25] Yeah. That's kind of got to look rad and have a flash movie when you go to the website.
Carter Thomas: [00:53:29] [indiscernible] The first thing is it's got to solve a real problem. So, if you can't look at that and look at the problem in real life and you don't see that as a problem, that's the first red flag. Second thing is they got to have a real team. Not only with people that have amazing credentials, but people that have built like real businesses before, I think that's one of the highest proxies of success in venture capital is have you built and sold the company before? You know, and most people haven't. They're incredible technologists, but they're not really very good business people and that's a big piece of it. And then you can get into what's unique about cryptocurrency, which is how strong is the community, you know, how engaged are they, how quickly is their development cycle, what is their GitHub repo, which for anybody listening, that's like a place where you can show people your coding history, right? So you can see how much development has been done. And I think that there's more due diligence along that. But I think it really comes down to the basics of -- Is this a real problem? Do I believe that this person's going to solve this problem? Is there an opportunity in the market for this thing to happen? And that's when, if it checks all those boxes, then you can dive into, you know, the details of it all.
Jordan Harbinger: [00:54:45] You mentioned something on an earlier show, and I'm going to butcher this, but I'll try to paraphrase it. You work harder doing the research because that's really the only advantage that you can get when we all get the news at the same time. Do you know what I'm talking about?
Carter Thomas: [00:54:57] Yeah. I think that one idea principle, I would say that I've become very, very, I guess obsessed with over the last two years is this idea of leverage and how constantly trying to leverage your own time, your own skill sets, everything you have. How do you get the most out of it? You're tight and everything. And in crypto in the past year or so, I look at what can I compete with other people on. Some people have quant algorithms and they can compete on the day trading and they can run 7,000 trades a minute and scalp half a cent here and there over and over.
[00:55:35] I can't compete with that, so short-term trading -- not going to happen. There's technical analysis, I can't really compete on that. My skill is right there. You go down the list. Researching companies is something that I've been pretty good at outside of cryptocurrency and within cryptocurrency, so I figured, why don't I just get even better at researching these companies? Finding out which ones win, why they win, what do I believe in? Because when I look at all the things I can compete at, that's the thing that I have a real shot at. I could walk into a room and I'd probably know more about a company than 80% of people there. That's a competitive advantage. I should double down on that as opposed to trying to get pretty good at a lot of other things. And so I would encourage anybody, in crypto or, I mean really anything in business, you identify where you have a natural advantage and you go all in on that, that thing.
Jordan Harbinger: [00:56:32] Yeah. I love research myself. I'm sort of obsessive with it. The other thing that I do that I teach on this show especially is the value of networking and creating relationships because you can find people… I remember a friend of mine said, “Oh man, this ICO is coming up. It's closed.” This is when ICOs were the thing, right? “It's closed, it's impossible. We're never going to go.” And I went, “Oh, I wonder if I can find the CEO.” So I just found out who she was. I asked a couple of friends of mine, I got an intro within like two hours. She was on the phone with me, I think the next day via Skype from like, you know, the old gym or something. And I went, “Yeah, a bunch of my friends want to buy this, but I know that you're really over committed.” And she said something like, “Oh, well, you know, I'm really looking for these few technologist type people.” And I went, “Oh, I think I can connect you to them.” So I did. And she went, “Do you want an allocation of this? I can't give you more than like $500,000 worth.” And I went back to my friends and I said, “Yeah, I mean we could buy like 500 grand worth.” And they went, “Wait, what are you talking about? You joined this group like yesterday. You don't even know what this company is. You make a few phone calls and now suddenly we're able to invest half a million dollars into this amazing thing. What do you, how?” And that becomes a massive competitive advantage as well because you can get deals first, you can get better pricing on things. You can find out what might work and what's a scam because you can find that, “Yes, this is my friend running it and no, I don't give him my own money. You shouldn't either.” You know, there's a lot of things like this that you can find. And do you also value networking and outreach or are you more siloed with your research?
Carter Thomas: [00:58:04] A hundred percent value networking. I think that the most valuable skill in crypto is the ability to identify and provide value to other people that have skill sets that you do not have or have access to you do not have. I think that there's so many people, and I saw this in the app business, I saw this before the app business I was in websites, SC, I mean, every industry I've been in, a vast majority of the people who want the upside the most are waking up and they're looking at the computers. I mean like, “I got to do this on my own. I got to learn the skills myself. It's me, it's David and Goliath. You know, it's me versus the world.” And the more you can collaborate and provide value to other people and they'll help you out in return and they have something, a skill set or whatever, you build that network, whether it be an allocation, whether it be somebody who is really good at doing, like if you're a technical chartist and you don't really want to do the fundamentals or research, become really good friends, like feed someone free charts all day, they're going to feed you research all day and vice versa.
[00:59:13] Or you know, if you want to find someone who's got an algorithm, you know, you go and do whatever for them and they’ll hook you up with the algorithm. And so I think that process is in itself a competitive edge because it is easier to sit there with your computer drinking coffee and being like, “Well I'm just going to refresh it and hope the market goes up.” That's the easy thing to do. And sign up for a couple of newsletters and someone tells you what coins to buy at the right time.
Jordan Harbinger: [00:59:41] Yeah. This is one of those industries where I think you might even underestimate your own competitive advantage because you do so much research. You say, “Well, you know, I read this and then I talked to the person who wrote that article and they got this source and then I read that source and it turns out that this is actually not true at all.” And you second guess yourself at some point, I remember going into a meetup of some kind and a couple of people were talking about something and I went, “I don't know if that's how it works.” And they're like, “Oh, you know, calm down. We know what we're talking about.” And I won't say this person's name here, but I was like, “Well, I don’t know, I was talking with so-and-so the other day and I just kind of total different understanding
[01:00:17] And they went, “Wait, wait. That person said what?” And it was like, “Get out your door. Conversation over. Everyone's on the phone and hang on.” I think that this person might've been wrong about this because this massive crypto influencers said kind of the opposite and I'm like, maybe I should check before you guys, you know, pull your money out of something. But it turned out that I was actually right on this particular instance and I ended up, these guys love me now because I feel like I saved them like a few million dollars, I think in some sort of huge mistaken investment because I just happened to be in a bunch of these different groups and kind of skimming them and lurking because I had the right friend who invited me to this, who had another friend who invited me to this other thing, and these kinds of networks mirror “real-life” networks where you can get jobs, opportunities, massive advantages on people just because you happen to have your ears, you're a fly on the wall in 27 different conversations with people that nobody else has access to. If you can build that type of platform, and I would imagine your YouTube channel has transformed the way that you do this kind of business because I don't know if this is your experience, but you can probably email a lot of people and they go, “Oh yeah, of course I've heard of you and you probably get a lot of email”, ‘Hey, I'll give you a hundred grand if you say that you're buying this crappy scam coin that I'm making tomorrow.’
Carter Thomas: [01:01:33] Yeah, definitely this ladder of that and yeah, I mean that's a huge piece of the channel has been, whether it be an, I want to get it on or just a meeting, I want to get, “Hey, what's up? Here's my YouTube channel”, and they’re like, “Oh, Whoa. Like, yeah, we're totally down to talk to you now.” I think also for anybody who is like, ‘Oh, well, you know, you're in San Francisco or you're in New York or you're in LA, you've got access to these people. I live in Omaha. How am I going to get crypto networks built?” You can do a lot of this online. I mean, you can meet people online, you can set up video calls. It might not be as easy as walking into a meetup and serendipitously meeting the right person, but it's all possible too online. So for anybody who is in an area where there's not a lot of crypto going on, it's still possible to do or you can travel to a conference or something like that.
Jordan Harbinger: [01:02:29] Let's wrap with how markets are about. I've heard you say this a lot, markets are about people, they're not necessarily about rational, logical information. And I'm paraphrasing, you should, if I'm misquoting you, you know, call me out on it, but you seem to use a lot of knowledge about people to kind of predict or try to predict what's going to happen with certain coins or markets. Has that made you money and how are you using your people knowledge to make money or save money? Because in example, case in point, you tweeted recently I think something called Centra. The founders get arrested by the SEC and people are buying the dip and you're just like, “What the hell is going on here?” And I recently also saw you say something like, “I'm genuinely excited to see how many people buy and sell based on April Fools pranks that they just didn't check.”
Carter Thomas: [01:03:16] Yeah, especially in 2017, there was probably within three months I made four or five trade or whatever you want to call it based on stuff like, “What's the sentiment on my YouTube comments? Are people mad? Are they happy that I'm doing longer videos?” And I could tell based on, was it a bull market or bearish market and those kinds of things were like very one-time tactics, but I was like, this is the most emotional ridiculous market. There's no regulation. And most importantly, there is no verification. There's no earnings report. So there's no way to show that Verge isn't worth what everyone says it is. Like if everybody believes it, that is what it's worth. Right? That's why it's a bubble. And so there was a lot of moments like that and I think that as it was screaming up, there was a lot of things that you could see, a lot of sentiment reactions and then as we're getting to the bottom, you starting to see a lot of sentiment reactions and I think that, yeah, it's definitely one element.
[01:04:29] I don't think that I bank on it as much as I used to because I think that there's more complexities to there's more money coming in than it was before. But yeah, I mean at the end of the day, a speculative market like cryptocurrency is purely based on how people feel and what stories do they believe? And I mean the fact that $50 billion can come in in 48 hours like it did last week because there is like a surge of euphoria, that to me means that all this money is just sitting on the sidelines. I mean, it's waiting to come back in. People need to feel like they're back in the bull run for to really come in. So it hasn't been completely exterminated yet, but for now everyone's, you know, there's this cautious feeling.
Jordan Harbinger: [01:05:15] So we can see the influence at work as well. I mean a few months ago, to illustrate your point, China said, “Actually, we're going to ban this”, and everything tanked and then it was I think two days later. “Well, we don't mean we're going to ban everything. We just mean we're going to maybe start regulating things more.” So it went way up as people went, “Oh, okay, I'm relieved about this now.” Then it was, “Well actually we're going to shut down all the exchanges though. Everything tanks.” And I'm just thinking there's some set of bureaucrats in this Chinese government area that regulates this stuff going. All right, so everyone buy right now and then they release some sort of BS media thing through state run media it, you know, goes through the roof. “All right, everybody, sell your stuff. All right. We all sold. You all good? All right, cool.” Tank it again. Buy it, let it fly up again, rinse and repeat until they finally just lost all but every shred of credibility.
[01:06:10] And we see this fear, uncertainty and doubt being manufactured by media outlets, especially state run media where they can really coordinate these things. And so you can see how this market is actually less rational than any other, which most markets are not rational at all. And now we see how this market is based purely, this is like a Snapchat market. This is a Twitter market where McAfee can go, “Oh, I really like Verge. It's really great.” While he's cashing a $250,000 check from the people who created Verge and then he's doing this once or twice a day and laughing his face off at every single one of us. And yet we're still following him on Twitter.
Carter Thomas: [01:06:47] Yeah, I mean, I think it plays a lot into the skepticism. I mean the people who are skeptical of cryptocurrency. It is because of this, and they should be, I mean, the fact that billions of dollars can move based on really anything sharing, I mean…
Jordan Harbinger: [01:07:08] or nothing at all.
Carter Thomas: [01:07:09] Yeah, like just boredom or whatever. That's a problem. Or at least it's not a sustainable model. And I think at the same time, it's an opportunity if you're willing to, you know, ride the lightning as they say and you know, you can be smart about it. But yeah, I mean I tend to be a little bit more of a conspiracy theorist especially as I read more books as I meet more people that have been trading for a long time. And you start to realize that a lot of the fear, uncertainty and doubt that comes is coordinated. I mean, it's not an accident. It wasn't like, “Oh, well we're just going to do this. And whatever happens happens.” There is intent behind plenty of these things getting released. You know, the George Soros and the Rockefellers, “Oh, we're going to start buying crypto.” There was a reason why that press release was all coordinated at a certain time and…
Jordan Harbinger: [01:08:01] they already bought a bunch.
Carter Thomas: [01:08:02] Like it's all a big game to everybody and so I think that, you know, like one tweet I put out, I was like that [indiscernible][01:08:14] these talks about it's not how you play the game, it's how the game plays you. I think that is cryptocurrency for now. It was definitely was last year, and it still is now where there is no formula, there's no script. It's trying to get, remove the Bitcoin out of your wallet. It’s trying to screw you. Like the market is trying to remove it. The game is how do you keep it and hopefully build your stack along the way. But that's the game.
Jordan Harbinger: [01:08:46] It's kind of like surfing in the ocean, right? Either the ocean spits you back out or you drown, right? Nobody stays on the wave forever.
Carter Thomas: [01:08:54] That's it. And it is what it is, right? Markets are markets, they're going to do what they do. I think as regulation comes in, there'll be, you know, especially with the CFTC regulating the exchanges, there'll be more less volatility, potentially less of these, you know, influencers who can move the price of a $500 million coin. But I don't know, just I don't see this dream being given up anytime soon. I still see a lot of people that are like, “No matter what. I will not give this up.” And that's very different than pets.com. It’s very different than what the internet bubble was and that's why there's a big question mark of how does this all play out.
Jordan Harbinger: [01:09:35] It's kind of like a lottery that you have a reasonable chance of winning if you play enough unlike the actual lottery.
Carter Thomas: [01:09:42] Exactly.
Jordan Harbinger: [01:09:43] Although buying lottery ticket is also a bad strategy, whether we're talking about crypto or the lottery itself.
Carter Thomas: [01:09:48] Yeah, very, very true.
Jordan Harbinger: [01:09:51] Is there anything that you want to leave us with that I haven't asked you yet?
Carter Thomas: [01:09:53] I think the biggest thing is especially for people that have been in the market or are have been thinking about the market, being able to recognize that it's not going to happen the way it happened in 2017 again. It may be better, it may be worse, but it's going to be different. And for anybody out there, if you're in crypto or going to get into crypto, you have to accept that and be okay with that and not play the game the exact same way that you played it last year. Because you will get hurt if you try to do that. So I think that's super important. Just stay smart, surround yourself with good people, you know, good information and just all about the fundamentals that really just comes out of that.
Jordan Harbinger: [01:10:41] Yeah. That smart money is going to do the opposite of what smart money did last time because the dumb money is going to expect the rest of us to do the exact same thing again and they're going to be wrong. Exactly right. So the smart money says, “All right, they're thinking three moves ahead while everyone else was thinking two.” Yeah, I think that's brilliant. Thank you so much, Carter, for coming in, sharing your wisdom with us here. CoinMastery.tv. It's a YouTube channel where you are sitting in a small acoustically terrible office, but giving really good information. It's inversely coordinated with the quality of the inclination. Thank you very much.
Carter Thomas: [01:11:16] Thanks for having me.
Jordan Harbinger: [01:11:18] It'll be interesting to see where blockchain technology takes us and I think Carter's got a really good outlook on this. Like yes, he focuses a lot on trading, but he really is a technology enthusiast at the end of the day and has a very rational mind, so it's interesting to see where the stuff is going and what he's teaching us. Great big thank you to Carter Thomas. He's on YouTube, Coin Mastery. He also has the Coin Mastery podcast as well, and if you enjoyed this, don't forget to thank Carter on Twitter. Tweet at me your number one takeaway from Carter Thomas as well. I'm @JordanHarbinger on both Twitter and Instagram. And don't forget, if you want to learn how to apply everything you heard here from Carter Thomas, make sure you go grab the worksheets.
[01:11:57] Also in the show notes at JordanHarbinger.com/podcast. This episode was produced and edited by Jason DeFillippo. Show notes are by Robert Fogarty. Booking, back office and last minute miracles, all by Jen Harbinger. And I'm your host, Jordan Harbinger. The fee for the show is that you share it with friends when you find something useful, which should be in every episode. So please share the show with those you love and even those you don't. We've got lots more in the pipeline. We're excited to bring it to you. And in the meantime, do your best to apply what you hear on the show so you can live what you listen and we'll see you next time.
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