Why You Should Take a Week to Learn DeFi

Colin and Brent discuss what Colin has learned over the last week by doing a deep dive into crypto and DeFi

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[00:00:00] Colin Keeley: Hello. And welcome back. This is common Keeley here,

[00:00:04] Brent Sanders: And I'm Brent Sanders.

[00:00:06] Colin Keeley: and we are two guys buying and building wonderful internet companies.

[00:00:10] Brent Sanders: Yes, indeed. And this week, or I should say last week, Colin, you went deep, deep into learning mode again, which is always fun. When you do some research, cause you're pretty good at researching. I'd say that's, that's one of your key talents

[00:00:22] Colin Keeley: Thank you

[00:00:22] Brent Sanders: this part.

[00:00:24] Colin Keeley: I have a friend who like prides himself on research was hanging out with last weekend. It was like, yeah, just being like resourceful and good at research and good at Googling. It is, one of the more valuable skills you could have nowadays.

[00:00:36] Brent Sanders: Yeah, that is the thing. I'd say part of that it's, what do you do with your research? Is that are the notes that you're creating? And yeah, you'll just share a meeting notes even, and it's oh, just like I was in the meeting, so I didn't have to go to it. So it's great.

[00:00:49] Colin Keeley: Yeah, that was funny. At the previous firm, I started doing that and then it quickly got tamped down, oh, we don't actually want all that in writing, but you did a, you're the only one who replied oh, these are great. And then the next week. Don't do this. Don't share these,

[00:01:05] Brent Sanders: we don't want this. We don't want that. W yeah. So you dug into defy, decentralized finance, right? Do I have that correct? Do I have, at least that much

[00:01:16] Colin Keeley: yeah. Versus trad fi trad five would be traditional finance.

[00:01:20] Brent Sanders: Got it. So before we dig in to define, we were talking about this before the podcast, we all have one or two friends who went deep on this maybe last summer or even before then. But like with the pandemic, this has seemed to pick up. And my cousin, Erin, who I wanted to have come on the podcast, but it was a little hesitant.

Maybe he still will. He got really deep into it. He's a tech guy. Generally pretty smart and savvy and, I don't know his reasons for it, but he got real deep into this world. And I have no idea if he's made a bunch of money, but I'm pretty sure he's made a bunch of money.

[00:01:53] Colin Keeley: Yeah. So next week we have, Jason on who's, was just on Erik Jorgensen's podcast. And he was like the biggest DFI expert. But, I figured I could give a primer and like my experience over the last two weeks of dive into it. And that'd be interesting to people that will ask more advanced questions next week.

[00:02:09] Brent Sanders: Cool. Yeah. I guess what is it is a larger question of it's a way of transacting outside of banks and traditional institutions, right? You're not on a, an exchange you're not trading or, exchanging funds. to anything like the modern markets or the sec has any touch around, give me like a, an overview of why somebody would use defy.

[00:02:30] Colin Keeley: So at a high level, it's recreating most of the functions of the existing banking system in a decentralized way as. Exchanging coins, exchanging different, dollars. Like all that stuff has being rebuilt, borrowing lending, and it's all built on Ethereum for the most part. Some of it's on like Selana and different platforms, but it's all when traditional banks would have 10,000 people working on something, These decentralized exchanges have the same amount of money moving through them.

And it's 10 people. So The rates are significantly better because there's just not that overhead.

[00:03:06] Brent Sanders: The functions and traditional finance in my experience, it's like the big, one of the bigger costs is risk compliance with laws compliance with, and changes with laws, ensuring you're not, laundering money for somebody. Those are the generally like the Highland. Arguments for why we need a 10,000 person company to clear loans or whatever else.

And so by creating, I know this much that there, the theory allows you to create smart contracts. You can create your own sort of contracts that, and, how would you define a smart contract?

[00:03:37] Colin Keeley: Oh man. If we're like, asking me to teach a course on this isn't going to go very well. I don't know.

[00:03:44] Brent Sanders: But it's essentially right. It's like you get to, you can define the terms and the contract will respond to that. So you don't need it. Administrator is my understanding. You don't need someone to. Clear a payment in manually or yeah, manually check that, like we have a physical signature on this deck.

Let's talk about a house, like purchasing us. I don't know that anybody's defied a home purchase, but I'm sure somebody is working on it, home purchase, you, you sign an offer or you go through some steps, you know that you do an approval or sorry, an inspection, you approve the inspection and then you decide.

Hey, we're going to close in 30 days or whatever that timeframe is. And then you go to a closing and the money exchanges, you signed the paperwork, not in that order, but like these things happen, right? And they happen in a certain order and everyone needs to like, have a sign up and you have literally a processor that signs a hundred pages of paper and they review it with you and you have to have your attorney there.

And it's my understanding of a smart contract is it basically removes that. And it's Hey, we're going to use. Digital versions of things to ensure that they happen. Things like if you default on a loan there's collateral and things like that. So I could be talking out my ass because again, you're the expert in this conversation, but that's my understanding of it.

And that's how you can run these systems with so few people.

[00:05:00] Colin Keeley: Yeah. So let's do the whole protocol is running autonomously. Like all the trades happen with no human involvement. And prices are set automatically. Liquidity is added or removed. Worldwide, as people see fit and the rates adjust accordingly. So it's definitely all programmable and there's no like human intervention, is what you're alluding to as far as compliance and all that stuff.

I think the sec and banks are certainly spooked by all this. And that's what happened over the last couple of weeks is like Coinbase was going into. Like interest bearing accounts. So there's like yield in a lot of this decentralized finance stuff and, block Phi and Gemini, and all of them have had yield bearing accounts for quite a while.

So you could earn, let's say two to 8% on like stable coins or Ethereum or Bitcoin. But then for some reason, when Coinbase moved to do it, they're like, this is a security and we're going to regulate you. And Brian Armstrong came out and said Hey, everyone else is doing it. I don't know. We can't do it.

So I'm not an expert in sec, like whether it's a security or not, it's probably moving closer. So the sec couldn't regulate Bitcoin or cryptocurrency before, but they can regulate securities. So this may be a backend way for them to regulate cryptocurrency.

[00:06:15] Brent Sanders: Yeah. So a couple of things that I've. And I don't know this to be true, cause I'm not a, an absolute, I don't know this to be absolutely true, I should say. But the sec takes political pressure, right? They're part of the government. I assume that there's an aspect to, Hey, could this be turned into something, could this be blow back from the meme stock craze?

Could this be blow back from just what the markets have been doing, especially around cryptocurrency? The argument that it's used by criminals, that it's this sort of a video games make you violent fallacy like that we had in the nineties where, they thought that all these games were causing violence.

It's it has nothing to do with it. It's a fallacy, but we still had people on Capitol hill. Trying to ban moral combat. So I'm going back to the nineties and what was interesting to me then, but this is a government institution that is charged with making, and I'm going to get bastardized it's a little bit, but they're there to make sure they're watchdog.

They're there to make sure that people aren't getting screwed, people are getting Wolf of wall street, and that's been going on for, it happened in the eighties and nineties. It probably will never go. Fully. So they're understandably vigilant. They're looking for, bad actors.

And so I'm of the mindset, like there is some regulation or we need to have these fights and we need to have these sort of like incursions into Coinbase is plan. Prove that this is above board and let them prove, with, sensible understanding. You have to have savvy people that are making these decisions is the problem.

And then I think that's why, like we wanted to have this conversations. This is, it comes off as something that's incredibly complex. Once you say blockchain, people glaze over and it's I don't think blockchain is necessarily, I'm sure it's an underpinning of how the technology works, but it's like, it has nothing to do with what the sec has an issue.

I think what their issue is that people may think that they can make money when there's a chance that they can lose money or whatever else are there to protect the consumer.

[00:08:09] Colin Keeley: Yes, I would say, so diving in, like I wanted to experiment with a couple hundred dollars and just move stuff around and try it all out. And everything is super difficult and complicated. If you wanted the average person to do this, like you would need a whole new interface FA face. I think OnRamps have to be like a hundred times easier for the average person to like, use or trust this.

Very hard. And then along the lines of security, so that ideal security as a simple security is just like a Metta bass. So you get this wallet, they set up in your Chrome browser and that's where your money is stored. And that's the most safe place. Matt I'm asking your browser by itself is not terribly secure because it's just like a passphrase.

If you have that touching the internet anywhere, people can hack it. And it's like just 24 words. If they have 24 words, it's like they have your bank account plus the password, plus like every key to that bank account. So the way you do it is you have a physical wallet, which is like a little USB jive and the password shouldn't touch the internet.

And then. A backup. You have you write it down on paper or you write it down and like steel, the steel would last longer if it was like a fire or something. And then people break that up in half and then they put it in like different security boxes around the country. So if one, a box was compromised, they wouldn't actually have the other half of your password to access all your funds.

But setting all that up is like really hard. So I set up my And it's this is horrible and it doesn't always connect. And it's it was all my money lost. No, I'm just struggling to connect. But it's a huge pain.

[00:09:39] Brent Sanders: Wow. Yeah. I've, I have not dug into it. So I guess to back up, like I've owned in, invested in cryptocurrency, but it's always been, I'm the simp using Coinbase, right? Instead of Coinbase account, I pay fees. I bought some, a PayPal, less fees. It's I'm not. I'm not like going to that extent.

And I'm very technical by the way. I just don't want to deal with it though. I don't have the time or interest for it. It's like its own hobby. And you can get really into it and I've just defined in general. I'm just like, I ha I know it's cool. And it's going to be, it's super interesting. I just haven't had the desire because I'm afraid that regulation's going to come in and change things enough that, Have big impacts, but most likely in my mind, it's like the sooner you get into this, the better off you are, especially as an engineer, right?

The more you learn about creating your own smart contracts, I think that's a. Technology. I think that can be applied in a bunch of really interesting ways in different ways, but, it's a slow burn in my mind. It's not like I need to figure this all out right now. And to your point, when you mess with things like other technologies that have been like this over the past couple years, like people might be familiar with IPFS or interplanetary file system.

Like really. Groundbreaking technology, but it's it's so early, it's too early for me to get into, because I don't know about you Colin, but when I pick up something like this and it like, doesn't work or, it doesn't feel like fully baked. I get really frustrated and I'm like, we'll spend a lot of time to fully bake it.

Whether, it's, I assume it's working for everyone else. So I can see why this is still early, but I'm like, what's the upside, from your perspective, what have you found that? Like, why does it make sense for people to, to start dabbling with this right now? Can you actually make some money?

[00:11:21] Colin Keeley: Yeah.

I'll get into how the money's made and like why the yields are so high, but just for perspective. So defy allianced maybe a little over a year and a half ago, two years ago, and it's gone from a little under a billion dollars to a hundred billion dollars in total value, locked in, defy in under a year.

It's growing incredibly fast. It's tons of, money, real money being at play here. That is, pretty interesting in like large financial institutions, large hedge funds. They're putting a lot of money at play. So like my little couple hundred dollars is I felt relatively safe, right?

If they're willing to risk all that money. But so where does the money come from? I think it's interesting to look at. So there's staking rewards, which is like compensation for helping secure the blockchain. And that's so Ethereum, you could stake it and you get five to 6%. Then there's lending rates.

So people. R, earning interest by providing funds for other people to borrow. And that's again six or 7% or something low, exchange rewards. This is best way to think about is like in a currency exchange. If you want to exchange, dollars for euros, people are taking some little spliff in there and making some money.

And so you could basically. Put your money in these liquidity pools, and then you can make really nice, AP wise. So real nice yields that are like, I would say 10 to 20 to 30%. And even just on stable coins, it could be like 8%, which is absurd because it's 0.01% at chase or something like that.

[00:12:48] Brent Sanders: Yeah.

[00:12:49] Colin Keeley: So generally in the defy world, people are willing to take much higher borrowing rates because they feel good about their opportunity to make way more money on it.

If even if they have to borrow dollars at 6% to do then there's platform fees, which honestly, I don't understand as well. So if you're doing like sushi, sushi is one of the big exchanges. And so as you do stuff there, you earn sushi tokens and you can stake those sushi tokens and be like, I really believe in sushi as a platform, which is basically saying I really believe in sushi has like a startup and you could lock up your money for a long period of time with them.

And then you earn a higher percentage. But where you get these like crazy interest rates, and why it was like defy summer last year is because you had all these exchanges popping up and then they have incentivized liquidity pools. The best way to think about this is like free Uber rides. So like Uber launched a, you get tons of free Uber rides just for being like, Hey, you should check out Uber, as a pretty awesome platform.

And I give them free rides to everyone. And so these are incentivized liquidity pools, where if people are launching new tokens, they need a way to get other people to provide liquidity for it. And that is offering tons of rewards. So these new exchanges launch date. Basically giving you, I don't know, 3000% APY or 30000% APY in a lot of these are going to zero that is printing tokens.

And some of them are rug pools. Like they're designed to be scams, but some of them aren't and like you can just do in these crazy AP wise and then, exchange it out for Ethereum or Bitcoin or something.

And that's where you can trace all the yields and, crypto or defy from is like one of these three methods. And last summer was the crazy incentivized liquidity pools. There's still some now, but not as many. And that's where people were making tons and tons of money. It's all risky.

A lot of stuff will go to zero, but it looks like last summer. A lot of it didn't go to zero.

[00:14:37] Brent Sanders: Yeah, I guess that's the concern, right? It's like these things get pumped. And they don't write in the owners likely sell that's a concern that going, putting my STC hat, this idea that, you know, it just, it reminds me of like options, trading people, having newsletters. Like you have to remember, there's also this like really seedy part of the world, that, that wants to. types of developments see something new, like you had pink sheets before you had, whatever else, they have good intentions and reasons and they seem like a great idea, but they can be exposed and mainly it's the people that can be exposed around it. So it's not necessarily has nothing to do with defy.

It has to do with people exploiting and trying to take advantage of one another and using that as a vehicle to do and it's okay, because it's new. Maybe we haven't quite found. The ways to protect ourselves yet. So putting the sort of skeptic hat, and I'm not a skeptic, but saying, what is the sec getting involved in this lending saying, Coinbase cannot blend, cannot provide, a lending product basin because the collateral right is your coin.

You could have a hundred thousand dollars of a Bitcoin and they're willing to give you some amount of cash for

Onto their is collateral.

[00:15:50] Colin Keeley: Coinbase got in trouble for their like yield bearing accounts. So like offering 6% on the stable coins or on Ethereum or something. There is other ones don't think Coinbase is doing it yet. I'm sure they will soon, Blackfin does it where you could put up a hundred dollars in Bitcoin and they'll lend you $50 in cash based on that as collateral.

And that, that makes sense. If you really believe in Bitcoin, you don't want to sell it ever. It's also like a big tax burden. If you got it in there. So you could just lend cash against it, and buy a house or something like that. You alluded to buying houses. A lot of people do it in that way.

So I don't, I believe in Bitcoin, I believe in Ethereum that I want to cash out ever, but I'll take half my money and down payment on a house is easy then,

[00:16:31] Brent Sanders: Yeah. Yeah, that's

[00:16:33] Colin Keeley: W I would say one of the risks is yeah, there's a, like a people risk of like rugby rules or like bad actors. Everything is just, it's to me, the like Twitter fail whale days, we try to use Twitter and it's just down all the time.

So Salana is one of the big, layer ones, like a Ethereum competitor. And that just went down for 24 hours. So there was something like, I don't know, $10 billion on Salada that just no one could access and everything was just frozen. So I had some money there, not like a super meaningful. But it was just, it was stuck.

The whole network was dead until they rebooted it. And then everyone got their money back and salon and drop like only 10% or something crazy. I don't know, people didn't seem to be super scared off from it or a layer two, a big layer, two on Ethereum. It's called polygon. And, that just drops transactions sometimes, like transactions don't get through, so you don't really lose money, but things are super buggy.

Or if you're trying to do stuff on Ethereum, Gaspesie just really high. So gas fees are what you have to pay to do anything. And it could be like $150 to buy like a $5 domain, which is something I did. I bought like key lead at ETH and it costs me $25. And then you have to pay a gas fee that varies from like $50, like a thousand.

And I got it when it was like $150. It was like, I just need this. I want it to operate. So I paid it, but otherwise it's really doesn't make any sense to do anything on Ethereum, because it's so expensive. Unless you moving like thousands of dollars in it, you can't really dabble in anything with, on Ethereum.

You have to dabble somewhere else, like Solano.

[00:18:07] Brent Sanders: What is the ETH address? Give you just a, instead of having it's like a domain name for your.

[00:18:14] Colin Keeley: Yeah, that's a good domain name or an email. So people could send you stuff and it could link out to all your other ones. So you could send me, like stable coins. You can send me, an FTEs Selana, could link to your website. It's like your identity.

[00:18:28] Brent Sanders: Sure.

[00:18:29] Colin Keeley: You don't need it. You certainly don't.

You could just have a long string of numbers and that could be your identity and everything you use as well.

[00:18:36] Brent Sanders: So when it comes to. Businesses trying to transact, like if you were a business, traditional business, would you get into defy? And when I say a business, you're like a landscaping company, like you've got cash, you've got customers and employees and all this stuff and what can they do with it?

What can like the average business owner do.

[00:18:57] Colin Keeley: So I would say if you're sitting on cash, you could put it in stable coins, unlike Coinbase or Gemini or something, and earn 8% and or six state, or, something like that, where it's way better than your savings account, where you're wanting like 0.01%, and then you could have access to the cash in like under a week.

So if you're just sitting on money, like it's a good way to earn a nice return on your money, but otherwise, Everything else beyond that is, overly risky or overly complicated. I do think there's so we're looking on blink sale of touching money and making it easier to exchange money. And so I was trying to look into.

So moving stuff on salon is like a thousandth of a cent. So is there an opportunity to onboard normal businesses, normal SMBs to like exchange money instead of doing, sending a check in the mail and this could be done in five, six. And transactions complete. I don't know. I think there is some people call it like a mullet business where it's like a normal on the front end and like crypto on the backend and people don't ever have to know that.

Cause it's a mullet. I'm not an expert on this. Enough to say, if you could do.

like a payment processing on it yet.

[00:20:06] Brent Sanders: Yeah. For the time being, that's why we chose point-based to partner with on, on blink. So at least, I'm a big proponent of it. It's just because I don't think I, we're definitely gonna turn off the crypto enthusiasts. That's been in it for five years or whatever. Been in it from the start and is the super user, but for somebody who has heard about it and wants to try it and is not going to pepper us with their crypto questions, they can go to Coinbase, commerce, set up their account as a business.

And, you can check out with it and I'm seeing that more and more on Shopify stores on, checkout processes to, to pay with Coinbase wallet or just you're playing well, you don't need point-based, but I do like it for. The entry point of Hey, they have support. They have a sensible web application that acts like PayPal does or Stripe does, but, depending on the coin, there's no fees, they take a cut on certain things, but they really do not take a cut on stable coins. So we've been testing, these payments of 20, 50, a hundred whatever amount of money and it's yeah. Fractions of a penny. And it's immediate, versus our other payment options, which Stripe basically taking almost 3%, which is, you can't find, unless you're doing great volume, you're not gonna find anyone else to clear credit card payments.

That's an industry standard. They're not like gouging, right? ACH payments, which we also added, there's still up to $5 in fees, which is, this is better, but it also takes about a week. So this really does have a great spot in the market. It's both cheap and fast. Now the question is you have that triangle of value of like fast, good, cheaper, it's affordability.

It's speed. And it's. And so I think that the thing that we're not quite sure yet is like with all these different points, what's the quality. And could, I think that's where it fans out where it's Bitcoin cash. I can clear a payment in 20, 30 minutes and it seems like it works great. Ethereum there's, there seems to be high gas fees and that's by design.

Right? And so you have these different coins in a wide. But to me like the average business owner, I don't think they're quite dairy. They don't have time to think about it. If you and I, who are fairly savvy are just getting to it. I would assume other people are, soon to come, but it's going to take some time, which makes me super bullish on this.

This seems like something that it would make sense to invest heavily in because if you are on the front end, And when I say heavily, understanding that there's risk and everything, and I'm also not a licensed financial advisor or anything, but I'm just saying, from my perspective, I'm way more interested in this as a store of value or, sticking cash into that's otherwise sitting in a bank account.

I have enough confidence that, things that are volatile won't, that some of these stable points that they have. the last year or two that, they don't whip around the same way that the, these other sort of more speculative tools have. And I think that your point around it being early stages and hedge funds getting involved, that's gonna, it's gonna make things whip around really well, or, in a pretty, amplified way, right?

When people are, Hey, this headphone got involved, they're gonna put a hundred million into this point. That's going to make major changes and it's going to move everything.

[00:23:14] Colin Keeley: Yeah, I think it's obvious, so tag your global, the one, like picking off all these venture deals, they're very happy with 18% returns and they just want to deploy as much capital as possible. And I think it's pretty credible to have for the next couple of years and defy like 30% returns.

And if that is not terribly risky, like it's not terribly risky on many of these stable coins. You understand why all these crypto hedge funds are popping up where it's like. You should vacuum up as much capital as possible and plow it into all these where the returns are that high until their returns get depressed and like supply outstrips demand.

So you could see why everyone is doing this and how it makes sense. And I think it's probably the last gonna last for a few more years until it's too much supply and then it all Tapper out and the returns will go back to like normal numbers.

[00:24:02] Brent Sanders: Yeah. Yeah, it doesn't, it does seem like it's going to be a bumpy ride. But that's with anything new, right? In some of your writing, you're saying, this feels like the early days of the web. And there was boom and bust, there was a buildup if there was also a crash.

And now I think what we look at, it's oh, if you, this to me feels like a little bit before that it's like, when apple was making the Macintosh before they were cool and popular, before the iPod came out, right? It's we're no one has come out with the iPad just yet to become that, this is a gold mine and forget that even the iPhone, but it does seem spreading money on the table.

It might be interesting getting involved and understanding it is definitely worth the time. So I'm excited to have our future guests on and pick his brain on the nitty gritty around it.

[00:24:49] Colin Keeley: Yeah. He's fascinating. The Eric Jorgensen podcasts with him as awesome. He is about as bullish as you could possibly be. Think I like 95% of his wealth is in Ethereum and now he's taken like double leverage positions on Ethereum. He's basically. Thanks. It's if he could own the app store of the future, or I dunno, JavaScript or something, it's yeah, deploy as much capital as you possibly can into it.

Is mostly his perspective in, to say there's going to be boom and bust. There is adopts like 20%, almost monthly.

[00:25:18] Brent Sanders: Yeah. Yeah.

[00:25:19] Colin Keeley: If that happens to the stock market, it's like a end of the world, but it's like any other Tuesday and a Bitcoin or Ethereum for something to do that. So Yeah.

definitely not a smooth ride upward.

[00:25:30] Brent Sanders: Yeah. I would say, my experience with it, it's just you have to have a belief that it's, this is a long-term play and almost just shut your eyes to the day-to-day trauma. Otherwise you're going to miss out.

[00:25:40] Colin Keeley: Yeah, it will drive you insane if you actually watch any chart. Like I've owned Bitcoin for quite awhile. Not like enormous amount, but I, you just can't look at it. Like just literally don't look at it. And then it's once a year it's oh good. It's up 50%. And you didn't see it all the time to job, like 90% in that time to get there.

[00:25:57] Brent Sanders: I'd tell you it's the same thing. If you bought apple stock in 1992 or something, it seriously. It went, it had years where it did terrible, but then you, if you woke up one day and 20, 20, it had split done a 71 split and gone up a couple thousand percent, right? Whatever you put your money in.

But when they were getting beat up by IBM, when they were getting beat up by Microsoft, it, it doesn't look so good. This is investing in a nutshell, but you have to have that long-term hold faith, but, it'd be interesting to see how the government learns about this, how the sec reasons with it.

It isn't, it's not doing anything that, they shouldn't be able to wrap their heads around. I just, I wonder what. Type of resources. The STC has to grasp these things, to regulate these things, to see where this fits in. And in my mind, all it's going to take is enough money with in this world to say, Hey, no, like we're doing this because it's that we, the people Vive with the internet or with the government, it's if enough people accept it, say marijuana or whatever, if it becomes socially acceptable, the government will fight.

It's not the other way around. They're not going to, we don't live in China where it's just okay, no more tech companies. No, no more mining. It's it's generally falling the notion of business. The U S government is fueled by money, right? It's if the taxpayers that are, if all the top blue chip companies come out and say, Hey, now we need defy.

In order to compete with China, it's a strategic initiative. It's likely going to happen the sec. Figure out a way in coalesce.

[00:27:30] Colin Keeley: Yeah, I think it all goes back to taxes. There's going to be enormous wealth creation in crypto, and there already has been, I'm going to say an insane number of billionaires that have been created here. And the government wants as much taxes as possible. And that is their incentives.

And so banning it or anything, regulating it too much to be disasters. So I think more so they want to figure out how they can tax it appropriately, which is going to be an enormous headache. It's a very ambiguous now, like what is a taxable event? And there's some apps popping up that it's so everything you do on a theory or a Bitcoin or whatever is tracked on the blockchain.

And so you could go back in these apps can go through and be like, Yeah, yo, one penny in taxes here, $10 in taxes here and sum it up and you could submit your taxes that way. So that all has to be become more concrete. And so people are actually understand what their tax burden is.

My, my plan for now is as long as you're not selling stuff, you shouldn't really have that many taxable events. So punting for a little bit until these apps are like for their long, where it's your taxes could be done, somewhat automate.

[00:28:30] Brent Sanders: Yeah. It's pretty hard to do yourself. And my opinion, I don't take great notes when I do transactions. And again, I'm just like a noob with all this stuff, but I have put a bunch of money in and then took a bunch of money out and then put money in and then switched it from coin to coin.

And it's God, I don't remember what all, in Coinbase. I think they have a record of it, but it's not great. It's not like my TD Ameritrade account where it's okay, here's. Your net gains. Cause they, they actually have software built in there that handles it. So you're right. It's super early.

So I guess one actionable thing. How could you get involved? Do you sign up on sushi and like, how can you, do you just buy the stable coin and the APY you're talking about? Is that just from holding it and selling it as point and just, it's going to appreciate in value or do you need to participate in some form of lending?

[00:29:16] Colin Keeley: So if you want to hit me up on Twitter, I'm happy to give you a more step-by-step approach. But absolute easiest way is to use a centralized exchange. So the big ones are Coinbase, Gemini. Block fi like multi-billion dollar companies and you could buy Ethereum, buy Bitcoin, buy a stable coin, and then you could, earn yield.

You put it in one of their earn accounts that are in like 6% or something like that. So as far

[00:29:39] Brent Sanders: or sorry. So Coinbase already does this.

[00:29:42] Colin Keeley: yeah, No, actually, I think they launched it. I'm not sure a Gemini and black fi a hundred percent do gemini is probably the second biggest to Coinbase. So I guess I would say start there. But if you actually wanted to get really into it, put a few hundred dollars in betta mask and go to some of these liquidity pools and stake, some liquidity pools and go find auto compounders and like kind of move stuff around.

But that will cost you some money and gas fees and. Probably more advanced than anyone else needs to deal with. So I'd say you could just go 50, 50 Bitcoin Ethereum, and sit on it. And that's probably your best way to, if you believe in this.

or will believe in the future, like just have a little bit invested and just, don't look at it for a couple of years.

[00:30:23] Brent Sanders: Right on. I like that attitude. Good. This has been a good primer.

[00:30:29] Colin Keeley: I hopefully, I feel like I've learned a ton. I feel like my brain hurts from trying to understand all this stuff. But I it's good. It's definitely good to know. I think it's super relevant to like a lot of the stuff we're doing.

[00:30:40] Brent Sanders: Would you ever mind, is that like a thing anymore or is it just that's for the people that have data centers and the hardware to do it?

[00:30:47] Colin Keeley: Yeah. So mining is basically a game of like way he at the cheapest electricity nowadays a long time ago, it was like, you could just, do it and make some money. Now, if you just running into your house, you're going to be losing money, basically, guaranteed. So you need specialized equipment and super low electricity.

A long time ago, maybe eight years ago, we were in a, at a startup it?

a really nice building. Cause we had a sublease, we weren't paying for electricity and the startup ended up going out of money, but I was like, we should be mining like, and we would have made a tremendous amount, more money doing that, with our free electricity than we did, working on a startup, we were working on.

[00:31:20] Brent Sanders: Oh, man, that would've been fun.

[00:31:24] Colin Keeley: Yeah. Basically every time I was like, I should focus on this more and I never did was, a mistake in hindsight. Like every single time I wanted to put more money in Bitcoin or Ethereum and I didn't do it. Like it's just gone up until the right, which isn't guaranteed forever, but that's historically been the case.

[00:31:39] Brent Sanders: Yeah.

[00:31:39] Colin Keeley: Yeah. That's kinda all I got unless you have anything else. Jason, next, next week I'll be really good.

[00:31:44] Brent Sanders: Yeah, no, I think this is a good primer, good background. And we're going to keep talking about this. We'll see how it, once we have the, crypto features released on blink. So I'm curious to see how your average business, which is in my mind are like sweet spot. We have pretty plain Jane businesses.

We'll see. I'm curious to see how many people set up an account and actually do transactions that way.

[00:32:06] Colin Keeley: Yeah. Yeah, it would be great. That'd be great if they could store their, like some of their invoices in a script that tends to go up if they get ignore it. We'll see. Yeah.

All right. Until next week, Take care.

[00:32:19] Brent Sanders: Take care. Thanks for listening.

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