Does Crypto Make Trade Easier? Part 3 of Our Interview With Vandross

[00:00:00.850] - Dan Paulson

This is part three of our interview with Vandros Ediake. He covered so much as far as what we were talking about with crypto. I just couldn't get any of it out, so we broke it down into smaller parts. Here, he's going to talk about how you can use crypto internationally and how it works with different currencies. And we thought you might be interested in that as well. Take a listen.

[00:00:21.780] - Dan Paulson

Here's the hardest part that most people are going to have to wrap their heads around. Again, related to traditional banking styles and whatnot. But you I'm pointing out stocks. Well, would you consider Amazon a bubble because the stock values appreciate by 90 %? I think when people buy stocks, though, there's something tangible there. And that, to me, is probably the key weakness with a lot of people who don't understand cryptocurrency and things like that is this isn't something you can put your hands on. This isn't something you can hold like gold or silver or even your home. I mean, your home, yes, that value might fluctuate, but you You can sit in your house, you can touch the walls. There's a certain amount of tangibility there. With crypto, though, it's digits on a screen in the Ether. I think that's what's harder to wrap people's head around is how does something that is nothing more than electronics really adding, creating this value? And maybe you can explain a little bit of that.

[00:01:24.770] - Vandross Idiake

Yeah. When you look at stocks, stocks are pretty digitized, too, as well. If you look at our generation, how we I agreed, but I can walk into an Apple store.

[00:01:32.970] - Dan Paulson

I can hold my Apple phone and know if I invested in Apple stock, that essentially I'm creating a tangible product that I can see, feel, and touch. I think that's the part that a lot of people struggle with.

[00:01:45.430] - Vandross Idiake

Absolutely. I would say, it's a struggle for sure, but because the technology gives you a way in which you can verify that what you have is true, and no one else can replicate that, which is the technology. You encrypt things on-chain, and then you can verify that that value is yours. Whereas if I have, let's say, $100,000 in my bank account, how can I prove that that value is there? They're just basically telling me that I have $100,000 in the bank, but I can't necessarily really prove that. And if everyone were to collectively, as a whole, go and do a bank run, well, we know what happens then because of the fractional reserve banking system. I think that this is where the cryptocurrency comes in, and it solves that problem because everything is encrypted on chain. So it's all verifiable. You could see it on a blockchain Explorer, right? If you go to etherscan. Io, you have to Bitcoin and explore and look at that, too, as well. You can see exactly, hey, if I ask you, hey, to send me money, and I send you my public address, I don't need to go to the bank, the intermediary, to be like, hey, what's going on?

[00:02:57.090] - Vandross Idiake

It's been a couple of hours. No, no, no. I just go on chain and then see this public address sent this value to this public address, right? Because that's all it is, right? Blockchain is just a chain of blocks, and it shows three important identifying pieces of information, which is the sender address, the receiver address, and the amount, all tied into a hash, a transaction hash. So I think that that's what the solution that it solves is, like you see in Ukraine now, where a lot of people are flooding to the bank to get their money out, and they weren't able to get their money out because of the obvious of the fractional reserve banking system, and people still don't know that that's how it works. The system works in that way where the liquidity, actually, it used to be 10% of liquidity the banks had to keep inside the banking system, but actually, it's less now. I think they're operating, most of them, on 1-2 % liquidity, which is absolutely asinine. So you're working hard with your time exchanging debt for what everyone uniformly agreed upon as a medium of exchange. And you're storing that in what you consider a safe vehicle to store it at.

[00:04:08.160] - Vandross Idiake

And then something happens within the economy. People get scared. They go on a bank run. And then you realize that all that time you spent to reciprocate, to get that amount of value and put it into that system is all gone. So what do you do then? I think it's a great hedge for these type of situations, the catastrophic situations that we have. But I don't know what you guys thoughts are on that.

[00:04:34.880] - Dan Paulson

Rich, you want to jump in on that?

[00:04:36.850] - Rich Veltre

Yeah, I think the challenge for me, like I said, the biggest challenge for me is the fact that we've had this banking system and everybody's ingrained to it. And I think the secondary challenge to it is that the people who don't want blockchain are the people who are somehow significantly invested in the existing system. So we know that. We'll just call that out. Okay. But I guess the biggest challenge with blockchain becoming as big as potentially it could be, the challenge is the overall acceptance across... You need global acceptance. You mentioned transferring money. I think that's fabulous. I didn't even think of the fact that you're transferring money to a monetary system that's different than yours. And you don't lose value because it's still blockchain when you get to the other country. I guess The challenge, though, is from the Western side to get everybody here, I think you need everyone to be able to accept Bitcoin or blockchain, right? And that way, when you go into a store and you say, as you talk about a coffee mug. If I go into a store and I want a coffee mug, I can't pay with Bitcoin.

[00:05:48.770] - Rich Veltre

Nine times out of 10, I can't. They just don't have the accessibility. So for me, I'm seeing that as the biggest challenge. We have to get it to the point where it's accepted. And at every store, I can go in and say, here's my wallet, which might be my phone. It might be another device or something that I'm carrying that shows my wallet. And someone can say, okay, one Bitcoin gets me a mug or whatever it is that I want to buy.

[00:06:15.790] - Dan Paulson

That, I guess, is the piece that's... That's expensive. I said that's expensive.

[00:06:20.270] - Vandross Idiake

That's very expensive.

[00:06:21.570] - Rich Veltre

No, I understand. I was trying to get it down to some small... I knew, because that's the other challenge that I have in my head. But that's my first challenge is You got to get worldwide acceptance to it. And then that's the other thing I think maybe you can get through my blockhead, that we're not adding anymore. At some point, the number of Bitcoin out there has been finite, right? So it solves the problem of the monetary system. But somewhere along the line, just calculating how much that mug is going to cost because it's no longer Where one dollar gets you a dollar store. Now you need a Bitcoin store, and everything in there is going to be 60 grand now and going up and down in price because it's going to be based on Bitcoin. So you follow what I'm saying? The first thing is we why it's for an acceptance. And the second thing is, how do we get it to the point where somebody who can't do math in their head at four o'clock in the afternoon is going to know that's a good deal when I go and I buy a mug for one Bitcoin and realize I just spent 60 grand?

[00:07:30.000] - Vandross Idiake

Yeah. Well, here's what I say. I say currencies are always fluctuating, right? I mean, it all depends on what it's traded against, right? If you look at the US dollar versus the Bulgarian lead or the US dollar versus the Euro, they're traded against each other, and those prices tend to fluctuate, too. So one could argue that those are volatile currencies, right? And it's the same with Bitcoin. It depends on what you're trading it against. If you're trading it against US dollar, then It's close to $40,000 right now. But if you're trading it against, let's say, the Argentian peso, well, it just reached an all time high recently, an Argentian peso. So it depends really on what you... It's the same with every other currency, I think. You're never going to get the exact amount for that day, that it will be the same exact amount for the next day, because currencies always fluctuate slightly. Obviously, it doesn't fluctuate as much when you're talking about US dollars and euros, but they are volatile. That's why you have these forex markets, where people penetrate those markets and they do high frequency trading in those markets. So that would probably be my answer to that.

[00:08:41.290] - Vandross Idiake

In regards to the denomination, they are It's El Salvador. What they do is they denominate everything in Satoshis. So 100 million Satoshis equals one Bitcoin. And so that way it alleviates you saying, oh, I paid 0.000, one Bitcoin. You know what? With this mug. That would be 0.000, 2, 3 Bitcoin, please, for this coffee mug. So to alleviate that, they've denominated everything Satoshis. So it makes everything more sensible, I guess, for the long term. And I guess that's the best way I could answer that.

[00:09:16.920] - Rich Veltre

So you still have to tie it. So I think 100 % we're getting to the same point, right? That right now, cross-border, it definitely solves a cross-border problem, right?

[00:09:31.570] - Vandross Idiake

Yes.

[00:09:32.210] - Rich Veltre

If I think about just within the United States, if I want to get the United States to become a better proponent of the of Bitcoin, of blockchain, in order to do that, it's almost like if I still have to tie it to the US dollar, then I see all kinds of problems with that because of somebody else is going to be, hey, well, it's tied to I have the US dollar, so I'm going to be... I can't use it as a currency because I still have the US dollar as my currency. So really, at that point, it's just an investment in the US, right? It doesn't become transactable. Am I saying that wrong? That's the challenge.

[00:10:16.700] - Vandross Idiake

 no. So the idea is technically for over the course of time, if you look at the charts, right? So the dollar is decreasing value, and Bitcoin is increasing against the dollar. So the idea is, let's say, 20 years from now, the dollar is going to be so insurmountable compared to Bitcoin in terms of price, that people will then switch from a dollarization standard to a Bitcoin standard, because then it would be liquid at that point. And also it will have more purchasing power at that point, where the dollar is just diminishing in value every single year. And that's the idea is for right now, yes, You have to price it to against something. But at some point, the idea is that then you price everything to Bitcoin instead of pricing Bitcoin to currencies. And that's when that inflection point, that's when that shift will happen. Okay.

[00:11:16.260] - Rich Veltre

I see that. Okay. That makes more sense. And then you're on a global standard, where right now, other countries are still standard to the US. So now you'd be switching to an international standard that's based on free market.

[00:11:29.920] - Vandross Idiake

Yes, exactly. And there's also a couple of experimental projects in the crypto space. A lot of these things are experimental that are trying to create this basket of cryptocurrencies and make their own stablecoin based off of this basket of cryptocurrencies. So it's very interesting. It's very nuanced. And I don't want to get too much into technicals. It would confuse a lot of people. But what I would say is that the The free market is trying to make better alternatives to the current currency systems that we have in place. Even me, I've had issues, and it was super annoying that luckily for me, the bank account that I had, I could just send Bitcoin because they adopted Bitcoin, and I just swapped it into Bulgarian lives. Because I live in Bulgaria right now. And it was so simple. It was like, okay, because I needed to send money over from my US bank account and put it into Bulgarian lives. And it was super complicated. I had to move it over here, swap it over there. And then it was freezing in between. They were like, hey, what are you doing? Why are you sending that amount of money?

[00:12:35.740] - Vandross Idiake

It was just a super exhausting situation. So I just simply just sent Bitcoin, and it solved the problem within a matter of minutes. I sent my bank Bitcoin, swapped it into Bulgarian labs, and then it was easy. And so this interoperability solution, I think, if it's adopted through all FinTech, I think it would be a really good alternative. So that way there's one uniformically agreed upon standard that's global, that everyone can say, okay, just send Bitcoin. I don't want your Ken and Shillings. I don't want your Argentine pesos. Just send Bitcoin to my bank, and then I can swap it. And that already is solving a problem. That's currently with the frictionalized system that we have in the banking system. And also when things move and they're more frictionless, it's going to increase the amount of liquidity flow within the entire market, which is great because then people people get their money faster. And when people get their money faster, they can spend it faster to businesses. So liquidity in and out flows will create this hyperactive type of flow state that we have within the economic landscape currently. And so I think that we need to remove the friction, especially because that's another thing, too, that I like is the fact that liquidity markets in the crypto space, it's open 24/7 because it's completely free market.

[00:13:56.480] - Vandross Idiake

Whereas with stocks, they close down at 6:00 PM. I don't I believe it's four.

[00:14:03.070] - Dan Paulson

There's aftermarket trading, but for the most part, it's done at four o'clock.

[00:14:07.000] - Vandross Idiake

Yeah. This is like for my generation, sometimes we want to trade Bitcoin. We want to be degenerates and just trade Bitcoin at 12:00 PM or midnight or whenever we want to trade it in a Saturday night eating a pizza. And this is what we like to do. We like things now. We don't want to wait for things. We like things now. We like this instant gratification of doing things now. And I think this also is a great technology to cater towards the millennials, the generation, the zoomers, the Generation Z. And yeah, I think the technology is just it's beautiful because of that, too, as well. You don't have to wait. It's permissionless. And I think this is the beauty in the madness behind the technology.

[00:14:48.660] - Dan Paulson

Sure to catch up part four next. That will be coming soon. Take care.