They say there are three types of people in the world. Those who make things happen, those who watch things happen and those who wonder what happened. Right now the world is undergoing an enormous change which promises to alter the future of banking, commerce, and finance as we know it. I am talking about Bitcoin and the world wide crypto currency revolution.
Why is the world moving towards decentralized models of commerce and finance? What are smart contracts and why is the USD currency a losing proposition when it comes to long-term diversity of investment and stability? How will the world change over the next 5 to 10 years? Why is investing in Bitcoin a better long-term investment opportunity than starting your own business? In today’s interview I speak with Mark and Andrea Hutto about bitcoin, blockchain technology, crypto currency investments and beyond.
Mark and Andrea, for the past 21 years you have actively invested in gold, silver and diamonds. You have now expanded into the crypto currency markets. What opportunities do you see for yourselves and your clients? How is our world changing before our eyes?
Bitcoin as we know it started in late 2009 and for most people it was hard to wrap their minds around it. What is bitcoin? This is a very common question still. Even if you have heard about it on TV there are still plenty of unanswered questions for the average person. The three most important things to know about bitcoin are:
- It is decentralized, which means that there is no central bank or entity that controls it.
- It is limited to 21 million bitcoin – in contrast, fiat currency can just be created with a push of a button.
- It is designed to be a peer to peer payment system. You don’t need to pay fees to a bank or ask permission to send your own money.
Those who do understand these issues are big fans of bitcoin. If you don’t know there is a problem with too little privacy and too much centralization, then you won’t see the value in having an alternative store of wealth. The fact is that we will have some form of digital payment system in the future and if you are using a modern debit card, you are in digital currency right now. The difference is the currency you are using is unlimited in number, in other words there is no control on the supply side. There is also a lot of confusion regarding the use of the word crypto. Crypto only refers to the cryptography used in creating the digital currency. I have heard a significant number of people in Britain think crypto refers to money used for funeral expenses. We have a long way to go before the public completely understands how crypto currency works and this means there is significant room for growth in this sector yet to come.
People all around the world are adopting Bitcoin as a substitute to their local currency. Why is this, and can it happen in the United States?
Many countries experience huge inflation of their unbacked fiat currencies due to out of control spending. Venezuela comes to mind, and we have all heard how desperate things can become. Digital currency is the future, it’s a new market. Before you could only choose what was given to you, now currency creators have to give you an incentive to get involved. It’s a new type of market and adoption is growing rapidly here and abroad.
I feel this is the best and biggest opportunity of our life time. It has been explained to be a change as big as the internet was to the world.
Without volatility there is no potential for incredible amounts of growth.
Be prepared, bitcoin and the alt coins have long periods of booms and bust scenarios that can be pretty scary and this is why we do not recommend selling the house to get into bitcoin, but we do recommend putting in enough money to get results.
Mark, will you call me if the price goes down, so I can sell my Bitcoin?
Sorry… No. Don’t invest more than you can afford to lose. If you are staying awake at night when the market swings back and forth, you have too much invested.
It takes a special type of person who can endure the type of risk that comes with Bitcoin investment and you have talked about this in many of the local classes and lectures you have done.
Correct. Do not invest if you cannot afford to lose. While the quick buck is possible, this is for people who see the big picture and can afford to stay in the market for the long run. The people who do the best are the ones willing to lose it all. I always say I am holding for a million or zero and nothing in between.
Visionary people who understand that there are no guarantees in life often see this as a much better risk than opening their own retail store. Probably two out of three small businesses fail within a couple of years. Five years ago I personally invested about fifty thousand dollars into a small business that folded within eight months. I lost my entire investment. Had I put that money into bitcoin, it would have turned into millions. For me, putting thirty or forty thousand into bitcoin is a no brainer. It’s all about risk vsersus reward. Why put fifty thousand dollars into a business that could at the worse become worthless and at the very best yield a 100K a year income? Bitcoin has more potential than most small businesses. But as a general rule, never take a loan out to buy crypto currencies. You will not sleep well.
J. Austin is now also handling institutional investments. Please describe these services.
We are now only open four days a week to the general public. We have reserved Mondays for private meetings for individuals and companies who wish to invest or withdraw one hundred thousand dollars or more.
Mark, why do people come to you to buy Bitcoin versus simply buying it on their own online?
Well that is very simple. We offer personalized service. A client can come in with cash or a cashier’s check and leave in approximately 15 minutes with bitcoin. They get to keep their privacy, as no information is stored on an online exchange. The crypto currency is handed to them in the form of a paper wallet, which is the safest form of storage. Also, there are over two thousand different crypto currencies out there, and we research all coins before selling them to clients. While there is no guarantee for profit, this certainly reduces your risk of being defrauded by a bogus ICO or coin. We do all the research and work very hard to keep up with the markets and latest technologies. And the fees are very comparable to a bitcoin ATM, yet you get a live person to help you.
Once you have bitcoin how do you protect it?
Most people who lost bitcoin were either storing them on online exchanges or on computers. Anything that is connected to the internet can be hacked. Computers can stop working. Some estimate that up to twenty percent of all bitcoin is in landfills inside hard drives that were thrown out.
We follow the advice of some of the most knowledgeable people in the industry, including some of the largest exchange owners, who advocate for cold storage. The best example of cold storage is the paper wallet, because it is not connected to a digital device. Once a paper wallet receives any bitcoin, the transaction is permanently recorded in the blockchain. It is almost like having a swiss bank account, as long as you keep your private keys secure, you can access the funds from anywhere while maintaining your privacy.
What are the cash out benefits and opportunities?
People who entered this market years ago have amassed quite a bit of wealth, and many are ready to sell some of their holdings in order to enjoy the benefits. But here is one of the backwards policies of our financial system: if you do not already have millions of dollars in your bank account you do not get to have your new wealth without having to do an enormous amount of paperwork. It can take you months or even a couple of years to slowly get your money. On the other hand if you do it through our company we can get it done in a significantly shorter period of time, and will even save you money.
How do you both see our world continuing to change over the next 5 to 10 years?
Blockchain technology and smart contracts will infiltrate most industries. There are major companies investing in the technology because it allows for transparency, full accountability and ease of use. It makes forgery practically impossible, since open ledgers are updated and audited by all users every time a transaction takes place. Imagine a scenario where your government promised to spend tax dollars on schools, and they would have to follow through, because the open ledger would show everyone exactly how the dollars are being spent.
Smart contracts stop the parties of a contract from secretly renegotiating the terms without telling the other party. Most conflicts in business and government are due to either an intentional, or unintentional miscommunication of terms. Smart contracts eliminate that.
Andrea, I am curious to learn more about the differences of the markets between gold and Bitcoin. What are the primary differences?
I tell people that gold and silver are a wonderful store of wealth due to their long history and relative stability. If you put part of your portfolio into precious metals, it will not make you rich, but it will hedge you against inflation, so your wealth is somewhat preserved over time.
Bitcoin on the other hand is highly speculative, it has only been in existence for nine years. With roughly 3% of the world’s population invested, the potential for your investment to grow is very high. But with all great opportunities in life there are risks. This means your investment could drop significantly.
Have you seen any trading between crypto currencies and gold and silver?
We have had clients who traded part of their bullion portfolio for crypto currencies, because they felt that this new market had a much greater potential for growth. We also accept bitcoin as a form of payment, and people have purchased both bullion and jewelry from us using bitcoin.
What are the next steps for starting to work with J.Austin and company?
It is really simple. You come in, you tell us how much you want to invest and you go home with your paper wallet. If you want to branch out to other cryptocurrencies, you can consult with us and we can point you in the direction of the coins we ourselves are currently buying. We do not like to give financial advice, but we can certainly share with our customers our research and insights.
Are there any last thoughts, comments or ideas you would like to share with us?
This is a relatively limited opportunity, once about ten percent of the world’s population joins this market the early adapter stage will be over, and so will the potential for large growth. Many people today say they wish they had gotten in seven years ago. I feel like seven years from now a lot of people will be saying the same thing.
J.Austin & Co.
1632 Ashland Street, Ashland, OR 97520
www.jaustinbrokers.com and www.roguecrypto.com
Open Tuesday through Friday 10 am to 5 pm
Purchasing Estates – diamonds, coins, jewelry, sterling flatware
Offering custom jewelry design and full service jewelry repair
Bullion and bitcoin trading