An interview with Jim Hyatt – Let’s Learn About Crypto

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This is such an exciting time to be alive. At any moment, the world may end, our country may crumble, the dollar becomes more worthless…BUT, creating wealth has never been simpler in the history of mankind thanks to the internet. Let’s talk about TRUE passive income, something I’m extremely passionate about building for myself and others. What is passive income? Well it’s basically money you can make without much or any labor at all expended. Rental properties tend to be the first thought of passive income, but these can come with risks and of course having to deal with PEOPLE. 

Crypto. Did you just roll your eyes or clench your butt cheeks a little because it’s scary and new? Well it is the pure definition of passive income in this day and age and it’s helping to create generational wealth for regular folks that you probably know. I got involved just about a year ago now and I’ve seen my portfolio at it’s low at 12% up and at it’s current high of 180% up. This is real money and I started investing $5-25 bucks at a time. 

Today I want to help teach you guys a little more about the basics of crypto with a little help from my buddy. I’d like to introduce a very good friend of mine, we go way back to high school…Jim Hyatt. Jim and I are going to talk a little about something we’re both very passionate about…cryptocurrencies!  Jim digs even deeper and has been involved for years longer than I have. He’s agreed to help folks get started with understanding the basics of crypto, why you should invest, the real world possibilities and potential dangers of investing, when the “right” time to get started, and how to get started. 

“Hey buddy, thanks so much for taking the time and doing an old school ESPN Bill Simmons email interview. Why don’t you give us a little background on yourself, when you started investing in crypto and can you remember your first investment? Mine was a $10 buy of bitcoin in November of 2020.”  

Hey Nick, I’m glad we are finally able to connect with our schedules to have this discussion on crypto. For those who don’t know, Nick and I went to high school together and have become good friends since we graduated. As far as my personal background – I spent 16+ years in law enforcement and I have recently joined a friend in a business venture which is going very well. 

Like many other people, crypto (specifically Bitcoin) was just background noise that I would occasionally hear about in the news from the early 2010’s. I would hear rumblings about how some person became very wealthy by owning this magic internet money but I never really took any time to understand it. Truth be told, if I would have spent the same amount of time learning about crypto as I did researching fantasy football I would be a very wealthy man (albeit probably missing a couple fantasy championship rings).   

In late 2017 I was involved in a car accident at work which resulted in my being home for several months.  During that time I had quite a bit of free time while my kids were at school and this was right when crypto was on fire late 2017 early 2018.  I wasn’t invested but I had the time to learn. 

I made my first crypto purchase in August of 2018 after really diving into one particular cryptocurrency, XRP, and became enamored with the use case and potential of it.   I think my first purchase was about $1,000 worth of Bitcoin which I then used to purchase XRP.  Back then it was still set up to where you needed to buy Bitcoin on Coinbase, send the Bitcoin to Binance, and then buy XRP on Binance with the Bitcoin.  It was confusing, scary, and a bit ridiculous compared to how easy it is now.   

Since then I’ve been researching and learning every day about the whole crypto space and I am invested in many different projects with many different use cases.  Crypto has become a passion of mine and I really believe it is going to have a profound effect in society and become ingrained in our everyday life to the point where we will look back and wonder how we ever functioned without it.

How much would $1000 invested in Bitcoin in August 2018 be worth today?

$ 0
Bitcoin, August 2018
$ 0
Bitcoin, November 2021
$ 0
Your investment now

Absolutely my friend, when I learned how into crypto you were, it made perfect sense to skip talking about fantasy football for a little bit and see if we can’t help create some wealth for other folks like we’ve both seen in the crypto world. Funny that you mention fantasy football and the amount of time we used to spend on that. I think so much of that was we both saw it as an opportunity to make some extra money. At the time working at Paige Group and the tv station, winning a few hundred bucks in fantasy was game changing. Now we’re waking up to look at crypto gains, some days in the hundreds and thousands. 

Isn’t it wild to think that a twist of fate like a car accident, that essentially lead to your career “ending” at the time, could lead you into what is basically brand new technology to many? This is just another story where you could have EASILY sat around, played video games, became unhealthy physically and mentally…but instead you took the time to invest in yourself and your future. I think too many people take for granted how simple it is to use the internet to create wealth for yourself. 
 
Before we scare too many folks away with the details of buying crypto…let’s give people that may have literally never heard of this technology beyond what they hear in the news, a little background. When people hear discussions of cryptocurrencies, most people have no clue what is being talked about, some folks only think of Bitcoin, while there is interest amongst a few to learn more. How would you describe in the simplest of terms what people are investing into when they put money into the crypto space?

I think you’ve honed in on the biggest hurdle for most people regarding crypto and that is the propensity to just write it off as a fad or something foolish that people are throwing their money into.  The biggest detractor for people in my experience seems to be they have a hard time grasping the “well what is it though” as if they want it to be something tangible – something they can physically hold.  My response usually goes something like this… “Do you get direct deposit?  Do you pay your bills online? Do you buy stuff from Amazon?  At any point during those transactions do you physically hold that currency that you receive/spend?  No?   Well how is that digital form of money any different than crypto currency?”   At that point I typically see the light bulbs kind of go on.  With crypto if your question is “ok how can I turn this into real money”… well the option to turn it into the US dollar is always there.  You can always cash out into the dollar.  The question is why should you want to?  The US Government (Federal Reserve) has spent the last 20+ years inflating the national debt from 5.6 trillion to 28.4 trillion due to a variety of issues that have been “solved” by printing more money.  Eventually those chickens come home to roost and the US dollar will lose its purchasing power which is what we are seeing currently with inflation.  Do things actually cost more or is the dollar we use to pay for things worth less???   That’s a different conversation altogether but my point is the option to convert your crypto to the dollar is always there.  

The most basic reason I can give you to invest in crypto is it is a hedge against the form of money we currently use. Right now if you keep your money in a savings account/money market at a bank you are currently getting a hefty 0.5% APY on that money. So you keep $100,000 tied up in a bank account for 1 year and you receive a tidy profit of $500 dollars at the end of the year.  Honestly the traditional banking system should be embarrassed.  If you put that $100,000 in just a simple stable coin crypto (stable coin is a crypto that is pegged to the US dollar value) you could earn a 4%-6% yield on that just by keeping it there instead of the bank.  The way I look at crypto is the way I wish my father would’ve looked at home computers and the internet. I’m pretty sure the same people today who laugh at crypto and say “we’ll never use that” are the same people who laughed at Apple or Microsoft and said “people will never need e-mail, people will never need computers in their houses” and now we walk around with computers in our pockets and have no idea how we’d function without them.  Invest in the future today. Any wealthy person or wealthy family at some point became wealthy because they or a member of their family took a risk. Risk is where the opportunity lies. I made a decision about 3 years ago to dive in head first because I refuse to miss out on our generation’s personal computer age.

Just about every new technology has started out as a “fad”. Personal computers, the internet, E-mail…you can easily find “experts” out there at the time that said these things had no staying power. All great points you bring up, we’ve been using “digital currency” for years without ever batting an eye at it. Now all this technology comes out with the word “CRYPTO” in it and people’s first instinct is to be hesitant. I think there’s a few reasons for that hesitancy. Obviously one being the newness of the technology. Another being some of the verbiage that’s used. I think “coins” is a misleading term that’s used amongst the crypto community. I tell people that each “coin” is a form of technology that you’re investing in, some are huge ideas that could transform the world…other’s are micro ideas that work within certain platforms. I’d be lying if I said I could explain all this technology in layman’s terms for people to understand, so why don’t we go through some of the common terms used and questions asked and you can give people a little explanation on what this technology means, and how it plays out in the real world and essentially in their lives now and in the future. 

What’s a blockchain and how does it relate to crypto? How can De-Fi (Decentralized Finance) change the way they look at “banking”? What are smart contracts and where can they apply in the real world? Do you think the concern about energy use of cryptocurrencies is truly something to worry about?
 
It’s funny you bring up that example of savings accounts with banks. I’ll even use a smaller number than 100k for people that really do just want to start micro-investing. I showed my Mom last night my ALGO “coin”, honestly I don’t even know what it is, but I know it gets me 4.00% APY in Coinbase. I’ve had only $400-500 dollars invested in there, however I get almost 3 cents per day in interest, which has added up to $15 dollars in interest made in less than a year on $500 bucks. I’m not sure bank accounts have ever made me 15 cents over the course of the 20+ years I’ve been banking! I also use Apple and Microsoft as examples…this is our generations opportunity to get invested in these future technologies on the ground floor. One of my favorite statistics I’ve seen is that only 1% of the entire world’s population is invested in the crypto space right now. To think how much more growth potential there is, just boggles my mind. 
 
Now that you’re out of the law enforcement world that was about minimizing risk I’d assume, now you join the entrepreneurship world with your business pal, and entrepreneurship is inherently risky. You’re taking the comfort and security of that every 1 or 2 week paycheck and trading it in for the freedom of time. Crypto for me was right in my wheelhouse of “risk taking”. I’d been on my own for 7-8 years so I was comfortable with taking chances. I look at this as a calculated risk though. I didn’t take out a home equity loan or wipe out my savings account (fun fact, I didn’t have one of those until investing in crypto haha)…I literally started investing in what I called coffee/lunch money. Instead of snagging a coffee from Dunkin during the day, I’d toss $5 bucks into crypto. Forget lunch out, another $15 bucks into crypto. Before I knew it, I was over 100% and it just keeps going…sure there’s periods of volatility, but I just look at those as buying opportunities now as I’m in this for the long term.
 
So if you were to tell an absolute complete newbie, someone who maybe wants to spend $100 bucks to start…what are maybe 3 coins you would tell them to put that money into to get started? I think we both know there’s probably 100 answers to this, as just about every 1 year chart to every coin looks the same…UP UP UP. 

Blockchain in its simplest form is just blocks of data/info that are stored in chronological order which make it difficult/impossible to change or alter.  If there is ever any question about a transaction or piece of information it can always be retrieved on the blockchain and the information is unable to be altered.  

Decentralized Finance or De-Fi is the ability to get a loan based on the cryptocurrency you own.  You can leverage the crypto to an entity and receive cash back and the lender will utilize the crypto in whatever way they want to use it.  Defi also enables you to lend your crypto out for a percentage rate which is more commonly referred to as “staking”.  The best part about Defi is that it cuts out the contact with a bank or lending institution.  You can do all this from the comfort of your home.  If you have the crypto and meet the requirements necessary you can get whatever you want.  This of course is not without risk and the risks associated with it should be vetted prior to any decisions.
 
Smart contracts is best described as a programmable contract that is similar to a math problem.   If X and Y and present then you can receive Z.  A real world application would be a DMV transaction.  The smart contract would be laid out where you are getting ready to purchase a car.  Instead of going to the DMV you would upload your license, appropriate paperwork (title, DMV forms etc) and complete the necessary forms that are required by the smart contract.  Once complete the info would be reviewed on the DMV’s end and they would “sign” the transaction (basically confirming that all the necessary parts are there for the transaction) and the DMV transaction would be complete without waiting in line.  In the future titles for cars, deeds for home, wills, and many other contractual forms will be held on the blockchain which will alleviate all the unnecessary paperwork and expedite most legal proceedings.  
 
As far as energy consumption I do believe Bitcoin and the “proof of work” protocol does use an absurd amount of energy.  A recent example was the Bitcoin transactions over a year equate to the same energy use as the country of Argentina.  Bitcoin is the original and the most valuable so it still has long term value but the proof of work protocol is no longer necessary.  There are new protocols that are faster, cheaper, and much more energy efficient.  
 
Now you want to put me on the spot regarding three crypto’s I would suggest to buy.   The first thing I would suggest is to set up an account on Coinbase as it is the easiest way to enter into the space to purchase things.  There are other exchanges such as Gemini, Robinhood, Uphold etc.   Some of them restrict your ability to buy based on what state you live in.  Right now I wouldn’t feel great about suggesting certain crypto because as you stated the market is really high right now (still has room to go) but several mainstream assets are at or above their all high time prices which is a bad time to buy.  The market is cyclical and there will be downturns and that is where I would look to buy.  I would suggest investing in anything that has a real world use case and has utility.  You may be tempted to jump into the latest canine based token Doge, Shibu and the like.  There are people who have made money on these but they have no use case and once regulations come around they will most likely become vaporware.  Tread carefully with those.   

You are like a crypto dictionary…as you grabbed them from crypto dictionary dot com or some shit haha. If one really looks into the true real world use cases of some of this technology, it’s easy to see how so many areas of employment are going to be affected, positively and negatively by these technologies. I told my lawyer buddy/client to look into investing into Ethereum as it will make part of his areas of practice useless in the future. I say that jokingly because I don’t know if that’s fully true, but common sense tells me if so much of every day processes we have to go through “paperwork” wise, get built into basic every day technology, then certain jobs aren’t going to be necessary anymore…am I correct in that thinking? De-Fi and Smart Contracts cut into what, 90% of what banks do? 

Haha, of course no great crypto investor is going to give away all their tips and secrets. There’s plenty out there that capitalize their knowledge into courses and subscription packages for people to buy. And obviously we can’t give out “financial advice” and you really do need to do your research on these things…but vaporware is a real problem. People having “the rug pulled out from under them” is a real problem. I tell people, start simple, Bitcoin and Ethereum, they’re top dogs for now and have been for quite a while. Just to give people a real world example of FREE money we were given in stimulus checks in the last 18 months…Bitcoin traded at $6,926 on April 11, 2020 when most people received their $1200 stimulus check. Today, on 11/1 it’s at $60,868…meaning your $1200 dollars would be worth $9336 today…up 778%. Which sounds fantastic, until you realize Ethereum was trading at $167 and is now at $4295 and your $1200 stimulus would be over $30,000 dollars. This is where I say, if you have a $1000 smartphone, and you can’t figure out how to make money on your own, well, good luck!

Below this paragraph are 1 year charts of some of the cryptocurrencies referenced. 
 
I decided to just learn with trial and error, but I did it with a reasonable amount of money. Some people see opportunities and instantly want to drop large sums of money into it. No matter how you do it, you should find a trusted place to learn from. Do you have have relied upon folks on the web or YouTube that you look to for trading advice or when you were starting to learn the basics?
 
I hope this helps some folks understand just the basics of diving into crypto. I can tell you, it’s a blast to be a part of. It’s very similar to the stock market except it doesn’t feel like the deck is stacked against you or that you need tens or hundreds of thousand of dollars to play. I’ve yet to find any kind of an investment that despite volatility seems to just increasingly grow over time. I say take even the smallest amount that you can afford and see what happens. Whether it’s Five grand or five bucks, just get started. James, I truly appreciate you opening up many to the crypto world for probably the first time and simplifying things in a way that won’t completely scare the shit out of them. I hope to have another crypto talk down the road that’s a round table of “experts” speaking a little more in depth on their experiences and what they see coming. Look forward to having you part of that group and hearing what changes even a few months down the road brings to this space. 

I think De-Fi and Smart contracts have the ability to streamline a lot of the mundane and archaic way of doing things.  I think it will take a long time for people to fully rely on a smart contract so they will still look to traditional financial institutions as it is generally more comfortable to deal with.  I think those same institutions will utilize the tech and make their own work a lot faster / easier but at the same time they will find a way to profit off of it rest assured.  

As far as trusted places I really just gathered a decent following on Twitter of people that I have come to know provide decent information.  Twitter is a great place for information when you filter out all the every day nonsense.  Youtube is also very good as long as you don’t get swept up in the confusion of what is speculation vs. what is factual.  I like positive speculation as much as the next person but there are Youtube content creators who really have little to no factual basis on what they say as long as it gets clicks, likes, and followers because they are paid in ad revenue which increases the more viewers they have. 
 
In summary I would say that your only barrier to entry in crypto is your own willingness to dive into it.  All the information is out there you just have to want to find it.  There are plenty of “crypto for dummies” videos and tutorials out there you can watch to get a baseline knowledge.  If anyone ever has any questions they can feel free to hit me up on Twitter @Twinpop14.  I’m always around to answer a question or give an opinion.  I appreciate the opportunity to speak with you about crypto Nick and hopefully we can continue this down the road.  
 
Take care.  -Jim

Thanks so much to Jim for taking the time to better explain for some of the newbies out there how to best start investing. If you guys know Jim, reach out to him and he can help you get going and probably hit you up with some referral links. Same goes for 3Zero followers, hit me up and I’ll help you get started. 

Thanks everyone!