Whether you’re a Bitcoin expert or someone that’s just interested in understanding what all the hype is about, this episode is for you. Cory Klippsten is the founder and CEO of SwanBitcoin.com. He also serves as an advisor to Unchained Capital, Bitcoin Venture Fund, and Riot Blockchain, and is a partner in Bitcoiner Ventures. As an advisor he has supported more than $250M of fundraising since 2016, and as an angel has funded 20+ early-stage startups.
LISTEN to this pod right here by clicking play or choose your favorite listening platform below. You can also WATCH the video podcast below that! Check out the show notes at the bottom to get more details about the contents of this episode. Enjoy!
Show notes in order of appearance:
- Bitcoin hype.
- Cory’s last oh shit moment.
- How Cory and Sebastian met in LA
- Sebastian’s lessons he learned early on from Cory.
- Never invest in something that you don’t understand.
- What is Bitcoin? Cory goes overview and also deep on this question.
- Why Bitcoin? The smartest money ever created?
- Cory’s take on Bitcoin’s potential total market value.
- Blockchain. What it is and how it plays a role.
- Importance of blockchain in other areas (or lack thereof)
- Exchanges Vs Wallets. People freak out about this notion of “losing their password.” As they say “not your keys, not your bitcoin.”
- Coinbase, Robinhood, PayPal and Swan Bitcoin. How they play a role.
- Why is Bitcoin conscious currency?
- Can Bitcoin be used as a force for good?
- How can Bitcoin help end wars?
- The controversy about Bitcoin’s energy consumption.
- How is Bitcoin helping in times of crisis in Venezuela?
- Cory talks about the name Swan Bitcoin.
- Cory’s 2 most important traits for a conscious leader to embody.
- How people can get started with Bitcoin.
- Cory’s Bitcoin predictions for 2021
Connect with Sebastian on Instagram
Below is a transcript of the video podcast created by Seb’s Robot buddy, Zekton. He tends to make mistakes so please forgive him if you find errors or some funky sounding sentences. For the real deal, watch the video or click on your favorite audio Podcast platform above! Enjoy!
Sebastian Naum (00:09):
What’s up fam. Today, we hit up a majorly trending topic. Bitcoin. What I loved about my interview with CEO of swamp Bitcoin, Cory Clifton, is that we really got into the weeds of Bitcoin, but we started with the basics. And what I mean by getting into the weeds through the basics is that Corey did an awesome job of going way deeper into the basic questions themselves. So whether you’re a Bitcoin expert or someone that’s just interested in understanding what all the hype is about this episode is for you. Courtney clips then is the founder and CEO of Swan bitcoin.com. He also serves as an advisor to Unchained capital Bitcoin venture fund and riot blockchain, and is a partner in Bitcoin or ventures as an advisor, he has supported more than $250 million of fundraising since 2016. And as an angel, he has funded 20 plus early stage startups before startups. Corey works for Google McKinsey, Microsoft and Morgan Stanley. And he also earned an MBA in finance and entrepreneurship from the university of Chicago. He grew up in SF in Seattle, and he now lives in LA with his wife and daughters, which is where I personally met him. Some of the things you hear in the show, you may not agree with some of them. You may not understand. And others may enlighten you in a way that you hadn’t experienced before one way or another. This is a bad-ass episode and I hope you enjoy it.
Sebastian Naum (01:32):
Corey, welcome to the show brother. How you doing? What’s up? How you doing? Good. Good to have you on. Great to have you on dude. You know, it’s an exciting time. Cause like when you get, like, when you got like, grandma’s asking about Bitcoin and, you know, that’s when that’s, when things are real, that’s when stuff gets to like, Oh, this is real mainstream, you know? Yeah. Yeah. And I mean, we’ve been here before. It’s just, it’s just back in bigger than ever. So that’s why man, I also dig the, uh, I dig, it looks like you got some long hair going on, man. I haven’t seen him in it. What would he, are you hiding some a ponytail? Well, there wouldn’t be a point of sale. It’s in, it’s in the man bun here, but uh, this hairdo is called the horse warrior.
Cory Klippsten (02:15):
This is when you like flow down through the steps of Western China and then come down into Anatolia and conquer Constantinople. So this makes the Turkish wife, he really happy. Oh hell yeah man. That’s amazing. That’s that? That’s how you know, you’ve got a good wife when that’s what she wants. That’s what she wants. Yeah, exactly about that man. That is Epic. Um, well I typically don’t do this, but I’m going to announce, uh, ahead of time, like kind of where this show is going, because there may be some people that know a lot about Bitcoin and they don’t necessarily want to like go through the basics and the one Oh one stuff, but then there’s people that are kind of getting their feet wet and really want to maybe get a little bit of that extra one-on-one as they’re kind of making decisions to invest. So we’re gonna probably spend about 15 minutes or so going through the one-on-one and having you explain, uh, our audience a little bit about it, and then we’re gonna get into some deeper, uh, we’re fun.
Cory Klippsten (03:03):
It is because I spend a lot of time talking about Bitcoin is that even if you think that, you know a lot about Bitcoin stick around and listen to the whole thing, because the analogies and the stories just keep on getting better. You know, Bitcoin is kind of a meme factory. And the way that we tell stories about Bitcoin and place it in historical context and societal context just keeps on getting better and better. So you might enjoy some of what you hear.
Sebastian Naum (03:30):
I love it. I love that, man. Well, Corey, I start all of my shows, asking my guests, when was your last, Oh, moment. Whatever comes to mind.
Cory Klippsten (03:39):
Oh man. I mean, it’s probably child-related, I’ve got two kids, so probably some sort of environmental disaster downstairs. It’s like, Oh. Where did she get those markers? And why did she have to draw on the wall? That kind of thing. That’s perfect. But no, no one of them keeps on actually the younger one keeps on getting into glue somehow. So she keeps, she keeps on gluing things. That’s been the latest disaster. She’ll glue like a table mat to the table or, you know, a book like she, she glued a bunch of stuff to like the front of our wedding album, which was probably like the most expensive book that I’ve ever owned. But she climbed up on a chair. It was supposed to be out of reach. He climbed up on a chair and started gluing things to the front cover. That’s like a glossy, you know? And it’s not like, it’s not like pasted on there. It’s not replaceable. Like it’s part of this thick cover from our, our wedding album anyway. Yeah. So now it’s like sort of covered in like patchwork ripped off glued paper.
Sebastian Naum (04:37):
That is, that’s a, that’s definitely an ocean. Yeah, definitely. No, there was, there was definitely an Oh moment. Yeah, for sure. Well, just to give, uh, a little background Corey, and I know each other because we shared a workspace together and by saying that it’s just, it was really just a bad-ass trendy coworking space in Santa Monica. It felt like, dude, I felt like we were living like in a bad-ass bachelor pad or something with super tall ceilings. Yeah.
Cory Klippsten (05:00):
It was like the real world startup style or something. It was ridiculous. Yeah.
Sebastian Naum (05:05):
It was sick man. And I gotta stay, you know, I always heard you be passionate about all of your startup advising projects that you had going on and everything, but I had never heard anybody speak so passionately about Bitcoin until I met you. And it wasn’t the first time I heard about Bitcoin obviously, but you were really that kind of trigger that little last push that got me to really investigate more into this. And I don’t know if you remember, but um, you know, certain things stick to people in their memories more than others. And to me, one of the things that stuck the most that you said Corey was never invest in something that you don’t understand, that you don’t understand, its value that you don’t understand why. And because as a lot of people get into Bitcoin, they go into the route of like, Oh, crypto. And then they look at all these things. Nobody understands what the F is going on anywhere. And so what I did then was I went out and I read this like 50 page dissertation on a technical explanation for Bitcoin, for non-technical people. And I started getting into it. And well, long story short, I really kind of got inspired by you and I got really into it and I’m glad I did. And uh, well, here we are now. So let’s hit that basic one-on-one question. What the F is Bitcoin.
Cory Klippsten (06:25):
Yeah. So this is fun. It is, it is the first good money that we’ve had for humans on this planet. And I’d say the simplest way to think about it is probably what you want a good money to do is you want it to be able to transport value across both time and space and traditionally, you know, for the recorded history and probably pre-history as well. We’ve had two kinds of monies that people have used. You’ve had gold. A lot of people refer to gold as a as God’s money. Cause it was just kind of like here when we got here or whatever, and gold is very good at transporting value across time, it holds its value. You can still buy a suit on Savile row for an ounce of gold, just like you could 400 years ago. Uh, it’s really bad transporting value across space.
Cory Klippsten (07:14):
Like it’s, it’s heavy, it’s easy for somebody to take your gold with, you know, guns or fists or whatever. And usually it just ends up in vaults owned by the central bank, which then abuses it by printing out paper slips, allegedly corresponding to the gold, but they always lie. And eventually you get inflation, um, Fiat or paper money, which is the government’s money, uh, is actually quite good at transporting value across space. You can send it either digitally or it’s, you know, you know, light paper that you can ship on a plan and you can ship billions of dollars to nefarious actors around the world or whatever it is. It’s really bad at transporting value across time. Uh, it inflates away and every single Fiat currency in the history of the world has died except for a couple that are still around today. We’re in, you know, kind of year 50 right now of the United States is full Fiat experiment and it’s going really poorly, um, as expected.
Cory Klippsten (08:07):
And uh, so with Bitcoin for the first time we have, uh, money that is, uh, excellent at transporting value across both time and space. Uh, so it holds its value across time. It’s designed to do that. And then it also can be sent, you know, near instantly and near for free, uh, across the world, uh, over the internet or any other sort of network that would, that would allow you to broadcast, um, transactions on the network. Um, so some basics about the Bitcoin protocol and that’s what we call it. Bitcoin protocol or the Bitcoin network. There are 21 million Bitcoins that will ever exist. Um, each one of those is made up of a hundred million Satoshis so that’s like eight decimal points. So instead of 2 cents per dollar, we have a hundred million Satoshis per Bitcoin. So the base unit of Bitcoin is actually the Satoshi and there’s 2.1 quadrillion of them, but it’s just way catch here to talk about 21 million.
Cory Klippsten (09:02):
Um, which is why it’s on the shirt. Wait that way, there we go. Yeah. Few understand this. That’s another common Bitcoin meme, if you understand, Sam understands. Um, so essentially, you know, if you think about it, there’s some fun ways to think about this. So we we’ve been around as humans for 300,000 years, which means that 4.0003% of human history we’ve had good money for the last 12 years. And more than 1% of humans on earth have had good money for like 0.00006, 7% of that time. The last two years is when we sort of crossed over where at least 1% of people on the planet actually own even the littlest tiniest sliver of a Bitcoin. So it’s just super early what we’re in the middle of seeing and the reason that there’s so much volatility and there’s so much just sort of excitement and the ebbs and the flows in the Bitcoin market, you know, we’ve had massive price spikes in 2013, 2017.
Cory Klippsten (10:00):
And then again, in this, this one 20, 20, 20, 21 is, uh, essentially just watching in real time, the monetization of a new asset, that’s better at being money than anything else that’s come before. And I think it may be a good opportunity to say like where we could be going. So the total addressable market for store of value, which is the first function of money, there are three there’s store value. There’s medium of exchange. There’s unit of account, the most important one for essentially figuring out which money is going to win in, in the money Wars and seeing like which currency dominates it’s, which one stores value. The best Bitcoin is better at storing value than all of the competition. It’s better than gold. It’s better than, than Fiat currency. So over time it should take a large share of the global market for store value.
Cory Klippsten (10:52):
So what is that? That’s 12, 12 and $12 trillion for gold. It’s a $90 trillion for a broad money. So that’s like all the dollars in pounds and yen euros out there in the world. It’s maybe another a hundred trillion for, uh, for debt, which is used as a store value. Um, obviously some debt is productive, but a lot of it is actually just people with nowhere better to put their money because they believe Ray Daleo when he says cash is trash because it is, it just inflates away, right? Uh, you got stocks and bonds. Um, so stocks, a lot of times, you know, a lot of that is really people looking to store value. It’s not because of the earnings of the companies, the S and P S and P 500 price to earnings. Multiple is more than double the historical mean right now. It means a lot of people are actually using stocks as a store of value instead of actually saying, Oh, this is what I’m paying for.
Cory Klippsten (11:39):
This stock is really like the future earnings of the company, discounted back at a fair interest rate or a fair hurdle rate back to the present value. You saw Apple stock double in 12 months without their dividend going up at all and their profits didn’t increase at all. Right? So you’re showing that people are plowing money into Tesla, into, into Apple, into Google, Facebook, whatever, essentially looking for these tech stocks to be, uh, stores of value real estate is another one. So a lot of real estate is not for productive use if you’ve ever walked on the strand in Manhattan beach and noted that 90% of the houses on the front row there are empty it’s because it’s just Chinese and Russian guys and gals buying up real estate as a store of value. Same thing with like downtown Vancouver, you know, Chelsea district in London, like a lot of these places around the world, or just your local suburb in any state in the country.
Cory Klippsten (12:31):
You know, a lot of that is not really for productive use. It’s basically like buying this thing, hoping that it kind of goes up hoping that real estate holds its value versus inflation. Um, so I’d say like conservatively, you know, at least 15% of real estate value globally is actually store value and not productive use. And it could be as high as 50%. So anyway, if you kind of add these up art would be another market that would just, you know, basically a lot of that historic value, not just appreciation of, wow, that’s a pretty painting, right? So if you add these up, I’d say conservatively, the total addressable market for store value is 200 million and more aggressively. It would be like, I’m sorry, 200 trillion more aggressively, it’d be like 400 trillion. So the market that Bitcoin is going after, if you divide those numbers by 21 million Bitcoins, you’re basically looking at, you know, an equivalent target market of 10 to $20 million per Bitcoin. And right now we’re at 50,000. So essentially what you have to think of is like, what, what percentage of that market do you think Bitcoin will take over time and over what timeframe? And that’s how you have to start thinking about, you know, how much of your own portfolio are you comfortable putting into Bitcoin?
Sebastian Naum (13:42):
Or just to go back there a little bit to the basics, like some of the technical basics, um, Bitcoin, uh, a key part of it is blockchain. So can you explain a little bit of blockchain for dummies and its value in Bitcoin and maybe some other things as well, too?
Cory Klippsten (13:55):
Yeah. So this is, um, Bitcoin is made up of a few different, uh, technologies. So it’s really common tutorial, creativity that, you know, Satoshi Nakamoto put together to create the Bitcoin network and a blockchain, which is a technology that’s been around for like 40 years is notoriously slow and inefficient. And essentially it has never had a use either before or after Bitcoin, other than for a proof of work blockchain that, uh, essentially, uh, keeps money from being usurped by state actors or any actors. So it’s basically a way to make state free money. Um, blockchain outside of Bitcoin is kind of like an airplane wing without an airplane. It doesn’t really have anything going on there. And basically the reason that we’re still in this weird sort of cycle where people still talk about blockchain is because a bunch of people raise money around Bitcoin thesis in 2013 and 2012 in that initial run-up in Silicon Valley.
Cory Klippsten (15:05):
And then basically had to look for narratives to keep their companies going. And so a lot of people said, Oh, well, I’m not into Bitcoin, but I’m, I’m interested in the underlying technology. Well, but underlying technology isn’t useful for anything other than state free money. And that’s why you have things like fidelity. Having gone through 50 proofs of concept over four years, looking for some way to make any sort of ROI out of blockchain without Bitcoin giving up completely and shutting it down. You also saw two weeks ago, IBM after many years of having a bunch of people with their reputations hinged to trying to find some productive use for blockchain without Bitcoin. And they basically took that unit to zero as well. So that’s actually all just a big marketing scam from Silicon Valley.
Sebastian Naum (15:50):
So that’s in terms of how it affects other areas, but just to understand the basic then of how it comes into place. Yeah.
Cory Klippsten (15:57):
When like it requires like public key cryptography, it requires, uh, you know, shot two 56, um, hash functions, uh, a proof of work blockchain, which is basically, um, you know, kind of the underpinnings of Bitcoin I could actually offer to you guys. Um, we give away a great book called inventing Bitcoin by Yon Pritzker. So you can go to Swan, bitcoin.com/free book and pick that up. It’s about a two hour listen or read. Absolutely fantastic. And you really will have like a good understanding of what Bitcoin is, uh, by the time you’re done with that. But at its sort of highest level, it’s a, it’s a way to, uh, send either cash or digital cash, a bearer instrument, um, from one per one place on the internet to another, without an intermediary, without a trusted third party in the middle. And that is a problem that’s been around or it’s at least it was identified for the first time in 1982 called the Byzantine General’s problem.
Cory Klippsten (16:55):
And essentially the next 36 years was a bunch of cryptographers trying to figure out how to solve this computer science problem. Um, it’s interesting because, you know, we have in all of the cipher scifi novels from the, you know, forties onward, or even, you know, back in, you know, Henry Ford talking about it in the newspaper in 1912, like we always kind of assumed there’d be this, uh, state free money of some kind and the cryptographers and the CII writers all assumes that it would be built in the internet and that it would exist on the internet. Um, and it just took a while to get there, but now we have it and everything after that is more or less inevitable.
Sebastian Naum (17:33):
So a way for someone that doesn’t want, or maybe can’t grasp that either a way I would say is just, it makes it really safe. Basically it makes it so that it’s not being duplicated. People think of like, maybe it helps with the hacking essentially of, you know, this digital cash that you’re saying so that you can’t say that, you know, you sent me money and that could be duplicated. So that money is now duplicated. So the blockchain allows for the safety of that to state that this is what happened at this time. And that’s confirmed that it happened at that time. Yeah,
Cory Klippsten (18:07):
That’s right. A lot of people refer to it as a time chain as well. In fact, Sitoshi called it a time chain a bunch of times. Um, but that is essentially what it is that the problem that got solved is saying like, Hey, I’m going to send a message to Sebastian and we can prove mathematically that he gets that message that I no longer have that message. And that that message was not tampered with in between me and Sebastian. Exactly. If you can do that, you can send value. That message can be value. And so I often say like a little tricky turn of phrase, but like, you know, we’ve got the internet. I think we’re going to look at the first 20 years of the commercial internet as essentially just a stepping stone to get to Bitcoin. And Bitcoin is actually bigger than the internet itself.
Cory Klippsten (18:52):
It’s a much more important innovation, but it couldn’t exist without the internet, just like the internet is, you know, as we think of like the internet, the internet is more important than FTP, which is like a layer two technology on top of internet protocol, but you couldn’t have the internet without FTP. You know, we like that. We’ll look at this ad fueled, you know, wild garden, Facebook, YouTube, Instagram internet, where we all felt super creepy and horrible things happen. And they all mind our data and like we’re breaking out of the matrix now and heading into a bright orange future.
Sebastian Naum (19:24):
I love it. Hello man. Hey guys, I just want to remind you, if you want to find more content like this, you can visit Sebastian nom.com. That’s Sebastian N a U m.com. You can also get a ton of other marketing resources for myself and my agencies ranging from SEO to social media, influencer, marketing branding, web development, and more again, that’s Sebastian nom.com. Thank you and enjoy the rest of the show. Um, there’s this whole thing Corey, where people will have, they’re afraid of jumping into investing in Bitcoin because they heard of this concept where, you know, I, if I lose my password, I can lose it forever. And there’s, you know, there’s not your keys, not your Bitcoin. And so that comes into play when we start talking about exchanges versus wallets. So if you know, you don’t really, if you’re kind of new, you don’t really need to have your own wallet. And most people are getting their feet wet and popular exchanges, right? So they’re getting their feet wet with now PayPal or your Coinbase or whatever. And of course, you know, you could do that on Swan, uh, Bitcoin. And so can we explain a little bit about how people don’t they have to go that route and how, you know, uh, for example, Swan can hold that money safely, uh, you know, in a trust and how that works in terms of wallets.
Cory Klippsten (20:32):
Yeah, sure. So if you want to go a little deeper on this, we spent a lot of time on this. So Swan bitcoin.com/wallets will take you through sort of the basics there, but, um, essentially, yeah, you can take self custody of Bitcoin and that’s what it’s designed to do. So Bitcoin has never been hacked. The network has never been hacked, but lots of people holding Bitcoin for other people have run away with the Bitcoin or I’ve had that Bitcoin stolen from them. And thus from you, the person you gave, you gave them your Bitcoin to hold for you.
Sebastian Naum (21:03):
It’s like having a bank where you give your money to in the bank leaves with your money.
Cory Klippsten (21:07):
Either the bank leaves with your money or somebody robs the bank and you’re not insured basically. Um, so that happened a lot in the early days, uh, Mt. Gox being sort of the most famous example. It was the world’s biggest Bitcoin exchange in 2012, 2013, and it got hacked. And, uh, a lot of people lost a lot of Bitcoin. Uh, the technology behind, you know, custody and storage of Bitcoin. It’s not the nuclear codes. It is tough, but it’s not sort of undoable. Um, so there are actually a lot of good custodians now, uh, and a lot of the exchanges, you know, functioning as custodians for their clients. And that’s fine. Uh, we do always recommend, especially anywhere where, like, if you have any worries whatsoever about the government coming for your money one day, or you live in a country where that’s actually like a realistic thing, uh, then self custody is absolutely crucial.
Cory Klippsten (21:56):
Uh, we educate people about self custody. There’s also things like collaborative custody or multisignature custody, where you can essentially contract with a third party company and they could hold like one or two of your keys in a multi signature setup, basically where you can kind of spread the security across a different, a few different places. Um, we set up someone to make it super easy to take self custody, but we encourage people to do that when they are able in the, like, when they feel up to it. Uh, and then, you know, if you have a family and you know, maybe your spouse or your partner, isn’t quite up to, uh, understanding self custody, then I suggest things like Unchained capital or Casa, where, uh, you can do collaborative custody and, you know, they, they work with, you know, trusts and inheritance and things like that. Um, that’s what I do for my family. We use collaborative custody other than a little bit that I like to just kinda play with and stuff like that.
Sebastian Naum (22:50):
Cory Klippsten (22:51):
Custody that’s one is totally free by the way. And so our withdrawals, which is nice.
Sebastian Naum (22:57):
Got it. And, you know, I was going to ask you, um, why, you know, Bitcoin, why you believe it’s the way to go, but to be honest, you’ve, uh, you’ve already kind of said that passionately already. You’ve already laid why you believe that. So let me take that a step further. Corey, why is Bitcoin a conscious currency? How can Bitcoin be used as a force for good. And let me take that a step further, because I’ve heard you say this in the past, how can Bitcoin help and Wars? Yes. So most
Cory Klippsten (23:31):
Of these Wars, these Fiat Wars of the last century, plus since we kind of started breaking down the gold standard and created the federal reserve, and everybody started printing money like crazy, uh, that is how you were able to finance world Wars and then sort of endless war ever since then. It’s because you don’t have to ask anybody. You can just print money. The U S government just prints money and it doesn’t come from the tax base. Uh, and we’re seeing that now, right? People are questioning, they’re saying like, okay, wait now, where is all this money? When did I vote for the tax increase to pay for this stuff? And then you see like Neel Kashkari on 60 minutes, the, the fed board governor, uh, from one of the branches saying like, we can print infinite money and his eyes get all big and scary. And he ends up on the internet full of memes. Right. Um, but that’s, what’s going on basically. Like we are all being sort of, um,
Cory Klippsten (24:24):
Stealing from us every day by printing money. Cause it basically causes inflation. It hurts savers. And so essentially makes you flee the money because the money doesn’t hold value. And then you have to buy a speculative assets. You have to go further out on the risk curve and you have to find somewhere to put your cash. Uh, if you don’t have excess cash, then you’re even more screwed because you literally can never get off the treadmill and you’re just stuck. So that’s why you see with Fiat money. It, uh, inherently centralized as wealth and all of the gains from this money printing pretty much go to the top 0.1% and the 1%, um, that actually is a real thing in our system. And you can be a university of Chicago, MBA grad like me, that’s, you know, more or less anarcho capitalist, Austrian economics pull yourself up from your bootstraps and still recognize that the current system is just completely crony capitalism and the whole point of society and the media and academia is getting as close to possible, as close as possible to the nexus of power in DC and New York to get close to the banks and the government so that you can be close to the money printer and get it and take your rip on it.
Cory Klippsten (25:32):
Take your little slice of it before it gets to everybody else. That’s why the most expensive zip codes are now outside of DC, which has written ridiculous. Didn’t used
Cory Klippsten (25:40):
To be like that.
Sebastian Naum (25:43):
That’s really interesting, man. That’s
Cory Klippsten (25:45):
Wait, if you can’t print the money, you can’t fund the Wars. The Wars are unpopular and people won’t vote for them. If we actually had to pay for them overtly through tax increases, we wouldn’t fund the Wars. Right.
Sebastian Naum (25:58):
Okay. Yeah. I mean, I had, I had never, I had never heard that point made that way. It’s a really interesting point. Um, I know how is Bitcoin and I, I saw that you guys are one of, uh, the guys on your advisory team was posting about this, but, um, how is Bitcoin helping, um, in times of crisis in Venezuela?
Cory Klippsten (26:19):
Yeah, I mean, it’s, it’s an outlet. So if you, if you’re savvy enough to get a hold of like a way to get Bitcoin and to be able to exchange either Boulevard directly for Bitcoin or boulevards into dollars or into Colombian pesos and store some of it in Bitcoin, then you’re storing your wealth the same way we are here in the U S and you’d benefit from an entire globe of people and, you know, machinery running this network and all of the other good things that are going on with Bitcoin. And that’s the money that you’re choosing to hold instead of your local, you know, trash in the gutter currency.
Sebastian Naum (26:54):
Gotcha. Yeah. Um, there’s, uh, you know, I actually, I posted a story on my Instagram that, um, that I was going to be interviewing, uh, you know, an expert on Bitcoin and somebody, you know, I got several DMS with, you know, people being excited about it. And somebody asked me to ask you about the controversy behind, uh, you know, behind the aspect of mining, taking so much energy because of the supercomputers so on. So how can that be combated in terms of a energy crisis?
Cory Klippsten (27:23):
Yeah. So if you play out the what’s likely to happen in the game theory of, of mining, uh, Bitcoin. So this is basically every 10 minutes that all of the transactions that have been started on the Bitcoin network are put into a block and then added to the chain. That’s why they call it a blockchain, right? So they kind of hash the transactions and add it to the chain. That’s what makes the Bitcoin blockchain. So every 10 minutes, we’re just about at block 700,000 right now. So it’s been going since early 2009, creating this long blockchain of all these transactions. Uh, the, the incentive to run the network is that every 10 minutes, there’s essentially a lottery. And basically all these computers are trying to solve this math problem, which is basically to just find like the solution to a math problem. And you can’t game it through any sort of algorithm. It’s totally just a brute force. You have to try, you know, 5.5 quintillion, different options on average right now, something like that, just
Sebastian Naum (28:30):
Trial and error, basically.
Cory Klippsten (28:31):
Yeah. You’re just keep on trying, try this number. Did that work? No, try this number, try this number. And it’s it’s, uh, and it just, this whole, it’s a hundred times more computing power than the next biggest, you know, supercomputer on the planet is, is being run by the Bitcoin network. And what people are worried about is like, Oh, well, you know, there’s X number of transactions today. If it has to handle like all the transaction volume of like visa in the future, you know, well, that’s gonna take up, you know, the energy of the UK and Spain and France or something like that. So there’s a couple of, uh, major logical errors there. One is that all of those transactions would have to be on the Bitcoin blockchain. That’s obviously false. Uh, you know, not all transactions in dollars are running on the Swift network, which is ridiculously slow and has less capacity than Bitcoin.
Cory Klippsten (29:21):
Um, so essentially you can just swap out a dollar sign and swap in Bitcoin, just like you could swap in euros or yen, and you can, you know, have centralized companies doing things, you know, just using Bitcoin as, as the currency. And they just net it out on their internal ledger. And every once in a while, they have to settle out with people or with other institutions. And that’s the only time you’d have a transaction actually hit the chain. So that’s just ludicrous on its. Um, the second logical fallacy is thinking that we’re done that the base layer is the only layer of the protocol that would be like saying the internet stopped with internet protocol while we’re on layer seven or eight of the internet. Now, as this internet stack keeps on growing on top of IP, there was, you know, FTP and SFTP and like HTTP and all these different things on top of it.
Cory Klippsten (30:03):
And now we’re on level seven or eight. It’s like that now. So layer two is basically mainstream now, which is the lightning network. And that lets you send transactions of, you know, as small as you want. That’s for buying coffee, you know, like Bitcoin is for buying coffee plantations. The lightning network is for buying coffee. Um, so you can send now, you know, a tiny sliver of a Bitcoin completely for free anywhere in the world instantly you can send a penny instantly for free to somebody in the Philippines if you want to. Um, so that’ll just keep on getting better over time and it’s scaling really fast. And then the other thing is with the mining itself
Cory Klippsten (30:41):
Cory Klippsten (30:45):
Are basically just converting energy into money. And so your cost is the cost of energy. So the incentive of the miners is to find the cheapest cost of energy possible. They want zero cost, energy or negative cost energy. So all of the mining projects that come up are looking for, uh, excess hydro-power. That’s not going to anybody. That’s the big spike during ratings rainy season. And a lot of the hash power goes to China because they have all this excess hydro. And so they just put it toward Bitcoin mining, um, just from the flared natural gas at oil and gas Wells around the world. So this is basically saying like there’s guests that leaks out when you, uh, drill for oil, uh, in any Western country, in most Eastern countries, it’s illegal to leak that gas into the air. You have to either cap it and like ship it somewhere or you have to flare it off with a flare stack and essentially burn it.
Cory Klippsten (31:41):
So this is why you always see like flames by oil Wells. If instead you take that gas, you put it into a generator and you put Bitcoin mining there and your car and you have an internet connection anywhere in the world. You can mind that coin with that. And you can do that for free because you can split the profits with the oil and gas rig basically. So this is just exploding and just the leaked natural gas today is between like 30 and 150 Bitcoin networks. Wow. Just the amount of natural gas that’s leaking out into the atmosphere from oil and gas operations around the world today. So this idea that like you don’t have, uh, enough power, you know, it’s going to S it seeks solar. So all these people are setting up solar farms all over the world. It seeks wind. It seeks renewable is more than anything.
Cory Klippsten (32:29):
And the trend has been like hardcore moving toward, um, toward renewables. And so what happens is if you have a constant, if you constant demand for renewable energy because of Bitcoin, because of Bitcoin mining and that industry exploding, what it does is it brings the production costs down the cost curve and accelerates because if you can produce more you’re at scale faster, and then you have, you’re able to drive down costs for everybody. So then the whole world benefits because of that positive feedback loop of the demand from Bitcoin, which doesn’t care about being near the grid, right? You can’t do solar in most places because it’s not always on and you need always on power. So then you have this problem with batteries and you need, like, if you want solar, you need solar near a population center and you need batteries. If you’re going to use it at scale, because you have to store that power for nights. So it ends up being really inefficient and cost cost inefficient with Bitcoin. You just mind when you have power and you don’t when you don’t. So solar is perfect for that. And so Bitcoin is driving down the cost of solar panels because it’s this, this amazing source of demand for that. So really Bitcoin is actually the solution to the climate crisis. If there is one
Sebastian Naum (33:40):
Interesting, that’s really interesting, man. Corey, why the name Swan?
Cory Klippsten (33:48):
Um, I’m a big fan of, um, no SIM to lab. The author had been a fan of his for 19 years now since his first book. Um, and he wrote a book called the black Swan and a black Swan is basically like an unforeseen event that has a massive impact. And a lot of people think they can only be negative, but they can also be dramatically positive. And I think Bitcoin is the biggest black Swan in history by far positive or negative. Um, very few people were expecting it and we’re seeing the massive impact that it’s having. And it’s just going to, uh, you know, it’s, it’s just going to continue to sort of, uh, ripple out through the world as people come to understand it and adopt it. So that’s where the name came from. And then, uh, my co-founder Jaan our CTO. Uh, he really likes the analogy of, uh, the other side of Swan, which is like, you know, Bitcoin was once this ugly duckling in its early days. And it was just like used for dark net money and drug deals and stuff like that. And now it’s become this beautiful Swan. Um, we kind of use both of them.
Sebastian Naum (34:48):
I liked that man course, you know, this, uh, you know, my show is about conscious profits, which is about conscious capitalism, conscious money, um, and conscious leaders. And I think that one of the things for being a contemplator, you got to look at a win, win, win situation. And so the reason I see you as a conscious leader is because you’re, you’re essentially doing that, right. You’re making sure that all stakeholders involved are benefiting from it, your advisors, your employees, your team, the people that are using your product right. That are getting the value from it to education, a store of value, but also you believe strongly in this being as a force of good to the world. So it’s not just you or the people using your product, but also to the world. So I can, should I consider you a conscious leader for that reason? And, uh, what do you think are two traits that a conscious leader has to embody? Hmm,
Cory Klippsten (35:43):
Well, I mean, I’m imagining you have a lot of, uh, people like running businesses or on sorta like management teams that listen to this. And so I would say like the one thing is, uh, really, I always just try to shine the light on other people as much as possible. Um, I grew up playing point guard in basketball and like, I just always try to set people up and also just think like
Sebastian Naum (36:06):
It’s such a
Cory Klippsten (36:07):
Tight line to walk, to try to be like the leader and the icon, because most people just want to tear that person down. So there’s only a few people that can pull off, uh, coming across as like super smart and capable, but also have people like them. There’s basically like Elon and like six other people that are actually able to do that. And so, so many people try to be Ilan and Steve jobs when they don’t realize like the other, the other 10 million effective leaders or the other, you know, a hundred million effective leaders are actually just in service of the people that they work for and their customers. And that you, in that most of the, most of the top leaders are actually more like that. The, the Jeff Bezos and the Tim cook and the bill Gates, and like most of these other people, you know, the Warren buffets like that, they’re not out there trying to be superstars leading from the front. They just kinda like sit, sit back with the crew and like try to like, you know, keep everybody happy and give people a mission and, and spread the credit around. And that’s guaranteed
Sebastian Naum (37:07):
Cory Klippsten (37:09):
Like if you have a good company, like if you a good company, good team, good market, good idea. And you’re not trying to be a superstar.
Sebastian Naum (37:17):
Cory Klippsten (37:19):
Like, unless you just like naturally, you know, are that frickin superstar and running your company and you feel totally comfortable. And like, that’s just, that’s just your zone and it makes you totally comfortable. We’ll be out front, you know, trying to throw all the attention to yourself. Like don’t bother you don’t have to be a star.
Sebastian Naum (37:37):
So shine the light, be a point guard, basically give rules to get your team to succeed. Yeah.
Cory Klippsten (37:42):
That’s I think, I always say like, uh, I think chief enablement officers a lot more, um, apt description of the best CEOs than executives.
Sebastian Naum (37:51):
I like that, man. I like that a lot. So Corey, how can people get started on, uh, with Swan? Yeah, so we, uh,
Cory Klippsten (37:59):
Swan, bitcoin.com takes a few minutes to sign up. Um, you know, you basically just, uh, decide how much you want to pay yourself in Bitcoin or how much you want to save. Like a 401k. Usually think about it as like a percent of a percentage of a paycheck or something like that. And you can set it up to buy automatically every day, every week, every month, our fees are about half of cash app and about 60 to 80%, less than Coinbase or the cheapest in the us for that. Um, we have incredible education. So got a great YouTube channel at youtube.com/swan signal. Uh, we have, uh, an incredible, um, club on clubhouse, um, which you should all check out and download that and make somebody give you an invite, just got featured in the wall street journal today for that club. It’s pretty cool. Congrats. Yeah. My first wall street journal quote is awesome. Awesome. Yeah, that’s pretty fun. Uh, and um, yeah, I know we’re active on Twitter and I’m on LinkedIn and easy to find I’m Cory clips done everywhere.
Sebastian Naum (38:57):
Awesome. And I love it. Well, I can’t let you go without just kind of putting you on the spot and asking you for like a, you know, a little bit of a guesstimate here because people listen to podcasts after they’ve been recorded. So what do you think Bitcoin hits by the end of 2021?
Cory Klippsten (39:11):
Oh, I don’t know. I mean, I I’ve been saying like, you know, these things can be really volatile too. So again, I, I’m going to tell you something very important before I say that, which is, uh, the amount of value that someone is willing to store in the Bitcoin protocol is directly correlated to their understanding of Bitcoin. So as you’re thinking of investing money in Bitcoin, if you don’t also invest in educating yourself about Bitcoin, you’ll have weekends. And what you’ll do is what 96% of traders do, which is buy high and sell low. So a lot of people that bought Bitcoin in early 2019, you know, were happy that it was running up as it went from like 3,100 to 13,800 in June of 2019. And it proceeded to crash down to $4,000 or 4,500 bucks in March of 2020. And they freaked out and they sold, you know, during the pandemic.
Cory Klippsten (40:07):
And what’s it done since then it went from four grand to 52 grand. So 13 X since then, you know, so if you buy now and we just saw dry down, like two weeks ago, it went from when, all the way up to 42 and then back to 28. And then it went from 28 to 52. So like you just got to really think about understanding Bitcoin, consistently buying all of the people that have been around Bitcoin for a long time, like 99% of them just buy regularly. They don’t try to like time dips. They don’t try to save up a bunch of Fiat on the side and like dump it in at once. They don’t wait for a pullback. They don’t wait for the next bear market. They just buy Bitcoin all the time. Over the course of many years. Think about it as like a five or 10 year thing. By the time you get to like year three or four, you’ll already be thinking about passing along your Bitcoin to your grandkids, grandkids. It’s like, it’s seven generation money. We’ve never had this before.
Sebastian Naum (41:01):
So what’s it going to hit by end of 2021? Corey, I’m going to put you on the spot.
Cory Klippsten (41:05):
Yeah. I mean, I, I mean, I think we’re in a bar. I think we’re in a bull market. And, um, you know, I think, I think that will hit, you know, somewhere between 150 and 300 K, um, or maybe a little higher, we’ll see, um, before there’s like a massive pullback, but you know, a massive fallback. I don’t know what that looks like anymore because you know, we didn’t previously have the world’s two largest asset managers, heavily buying in BlackRock and fidelity. We didn’t previously have the world’s two best hedge fund managers, you know, publicly into Bitcoin and Paul Tudor Jones and Stanley Druckenmiller. Uh, we didn’t have the world’s richest man buying it for his company’s balance sheet. You on Musk and Tesla, like, and we didn’t have services, you know, that were Bitcoin only that were incentivized like my company to educate people about Bitcoin. Like my, my company’s sales, finance, amazing education about Bitcoin. It was so much harder to get this information five years ago than it is today. And now there’s all these books and all these podcasts and all these people like me. There’s a thousand of me doing a podcast right now in every vertical that you can imagine they’re going on with physicists, they’re going on, SEO podcasts. They’re going on every kind of podcasts, because everybody’s curious about Bitcoin. They’re talking to musicians and rappers and athletes like it’s going everywhere.
Sebastian Naum (42:26):
I love it, man. Well, Corey, thanks for being on this podcast today, brother. We appreciate you, man. And thanks for passing on. And I hope people love this and get value and hop on Swan and hop on the train with us. Yeah.
Cory Klippsten (42:39):
So seven, we’re going to have you on our podcast next.
Sebastian Naum (42:42):
Cory Klippsten (42:44):
Okay. Because we’re going to have you on a Swan lounge, which is our Friday show. So either tomorrow or in the coming weeks, we’re going to get you on there. That’s more of like our casual, like hangout Bitcoin show where you’re not going to like be intensely questioned and we kind of just hang out sometimes there’s alcohol involved. So
Sebastian Naum (43:03):
I got intimidated when you said I was like, Oh, I got to prep. You don’t have to prep for that one. Just try it out, man. Well, that’s awesome, man. Thanks again, Corey. Thanks so much for being on pleasure. Good to see you. Hey guys, I really hope you enjoyed that episode.