In this special bonus episode, Dan and Kyle talk to Nicholas Prouten, the ambassador for the LODE project. We get dive into the specifics of his project, a cryptocurrency backed by precious metals. We then attempt to get Nick to give us the location of all the gold before discussing cryptos in a more general sense. To wrap things up, we quizzed Nick on his Canadian South Park knowledge!
2 Bulls in a China Shop: Recorded on 03/23/21
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Speakers: Kyle Hedman, Dan Leeson, Nick Prouten
KH: You are listening to an entertainment program put together by a company called Financial Ineptitude. Anything said on this show is not an endorsement, or professional advice. Would you really want to tell a court of law you were suing us because you thought taking financial advice from two idiots on a podcast put out by Financial Ineptitude was a good idea? Really? Clown hat, smiley face.
DL: Hello and welcome to the china shop. Step right in, step right in. We’re so glad you’re here. I’m shopkeeper Dan, and with me as always is Kyle, creator of financialineptitude.com. How you doing today, Kyle?
KH: Doing good, but we should be asking how you’re doing. Is your internet going again?
KH: This is, this is part two.
DL: This is round two of this particular call because an internet outage cut us off last time we tried it. We are joined in the shop today with a very special guest, NP: . How are you doing today, Nick?
NP: Hey, I’m doing great. It’s pleasure to be here, guys. Thanks for having me, and bearing with me to the technical difficulties.
DL: Oh, no, thank you for bearing with us.
No, thank you
DL: Yeah. Now, Nick is quite a bit of an expert when it comes to cryptocurrencies and the blockchain. And from what I understand, you’re a spokesperson for the LODE Project. Why don’t you tell us a little bit about that, the LODE Project?
NP: Yeah, yeah, absolutely. So I presently act as the COO for LODE, but I’m a bit of a Swiss Army knife, which includes getting up on podcasts like this one and chatting with good folks like yourself. LODE at its core is an initiative to put gold and silver on the blockchain, and restore it to the monetary system. So the project founders believe, you know, for most of the world’s history, we’ve actually used gold and silver as as monetary metals, meaning as actual currency. And up until about 1971, we actually had a gold standard in the United States. And in, and in most world’s, developed nations had a backing of some sort, when we moved away from that, and what was witnessed was that your, the value of your money actually depreciated pretty considerably. In fact, over the past 100 years, it’s about 90% depreciation of the US Dollar. And so, the, at its core, you know, what we do is we marry the best of both worlds, we take blockchain tech, which allows for, you know, immutability, accountability, decentralization, and in the case of the blockchain we’re on, instant settlement, and marrying that with a standard that has really stood the test of time, you know. Two very large capital markets and commodities, gold and silver.
KH: So how does that actually work, then? You mentioned it’s a cryptocurrency but it’s backed by gold and silver. Does that mean I can take my, I don’t know what the units are called in with LODE but.
NP: (Inaudible) AUX so AG being silver, AU being gold, and then X (inaudible).
KH: Right. So I could take one of those and I could actually go and exchange it for a bit of gold or silver?
NP: Yeah, you could, if you if you very well wanted to give a very healthy and robust redemption policy. The idea is every single AGX coin is backed by one gram of vaulted audited and insured silver. And similarly the AUX is backed by one vaulted audited and insured gram of gold. But beyond being, having to redeem that, because, you know, having physical gold is nice, but you know, you can’t go into a shop and buy anything with it. It’s not practical, right?
NP: If you want to make money, you have to create a payment ecosystem that is designed to adopt this, built to handle this this digital gold and silver, which is what we’ve been doing over the past four years. And there are lots of benefits to keeping it on a blockchain. Again, the ability to send, you know, small denominations back and forth to people, micropayments, etc, etc, all the stuff that made having physical gold really impractical. You know, we can, we can now restore that. You know we, with the gold standard, we did have, you know, paper money to back us up back then. However, the big flaw with that is that you were still fractional reserve banking, right? The dollars weren’t entirely backed. And so you’re running the risk of inflation and so on. Whereas this is, you know, every single asset is audited, vaulted and accounted for, and, you know, accessible. You know, we’re about to list on our first exchange in the next couple months here. And we have plan- a robust plan for for you know, several more by the end of the year. And there are other gold competitors out there, but we’re, I think, really first to market when it comes to silver. So it’s an exciting time for the project.
KH: So how does that how does that work then, marrying it with or having it backed by by that, are you having to like purchase gold for the reserves in order to create new currency, or are you still actually mining it like the, like traditional Bitcoin and the other ones are done?
NP: Yeah, absolutely. So the blockchain that we’re on on top of is called Syscoin, and it does mining, similar to how Bitcoin does it. The proof of work. And when it comes to our physical assets, the gold and the silver, when we were in our initial stage, we crowdfunded it, we got a, you know, we, we wanted this project to be for the people by the people. So we went and we found a huge stack of precious metals enthusiasts who purchased their, what we call our LODE token asset, which is kind of like our equity asset. But they purchased it using gold and silver.
NP: That was,the only way you could get in is if you gave us gold and silver, or you paid a bullion dealer who gave us gold and silver. And that allowed us to have a huge pool of this precious metal to tokenize.
NP: And put onto a blockchain. And so the LODE tokens, which you guys can still pick up today if you’re interested, are basically your stake in the ownership of the entire ecosystem of this digital money system. And it yields a dividend, and it’s classified as a bond.
DL: It’s classified as what?
NP: A bond.
DL: A bond, oh, okay.
NP: Yeah, so we’ve taken a very long regulatory approach to this project, versus lots of people who are kind of, you know, quick out of the gate and then get slapped by the SEC, or some other major financial regulator. And then their projects either get, you know, sunk, or they never see the light of day.
NP: And it’s been a long arduous process, because you’re dealing with two really different regulatory environments. One is precious metals, and the other, of course, is cryptocurrencies. But you know, four years later, we’ve largely done it. And and now it’s, it’s ti- about going to the market at scale. And we have a great payments platform that we’ve built, not just the cryptocurrencies, we also have our own mobile wallet solution where people can buy directly from us, or as again, like market adoption picks up, you’ll be able to see this in, you know, your most common cryptocurrency exchanges.
KH: So I want to, I want to go back real quick to the gold. Do you have to worry about, like where do you store it all?
NP: Yeah, so we have multiple vaulting partners. You know, throughout throughout the world, right? We have places everywhere from Singapore to Delaware, right?
KH: Okay, it’s not buried somewhere or?
DL: In the backyard.
Okay, all right.
NP: Under the tree, X marks the spot.
KH: That sounds a bit safer.
NP: (Inaudible( earlier and I wasn’t kidding. No, th- you you as a LODE token holder, you are, you know, that’s your stake in ownership of the entire ecosystem. And that includes includes the precious metals, right? So again, this is for the people by the people. And those metals are distributed across the world, for risk mitigation sake. You know, there have been clawbacks of precious metals in the past, and we want to minimize that as much as possible. So there’s that’s one purpose of having the vaults distributed, the other purpose is, shipping precious metals isn’t cheap.
KH: Oh, I bet, yeah.
NP: (Inaudible) from where somebody is, shipping it themselves to get a LODE token or something like that, then you you want to give them the best possible rates. And so that’s the other side of the deal there. So hopefully, that answers your question about you know, the gold and where it’s locked up. And the nice is there, thing is there is insurance on this. So, you know, all hell breaks loose, whatever.
KH: Yeah, becuase there are pirates still too.
NP: There there are still pirates (inaudible) fortunately, we’re not (inaudible) Captain Phillips. I am the Captain now.
NP: You know, but but yeah, we’ve we’ve really done our best to provide people with a system they can have confidence in and understand that, you know, the money is insured, the metals are insured, they’re vaulted, and you know, having that burden, you get all the financial upside without the burden of having to have your own independent vault.
KH: Right. Dan, you had a question there before I cut you off, about the pirate.
DL: Yeah, I was just wondering, okay, so so say that I’m all in, I love this idea. I want some of those LODE tokens that give me more tokens in the future. I can just log in, I just create an account on LODE.one and put in my credit card info and buy a stake?
NP: Yeah, absolutely man, you can, you can claim your stake in the in the monetary system of the future that easy. That being said, there’s one extra step in there, right? So to buy buy the digital gold and silver, if you want to start stacking and preserving your wealth and trying out this new money, I highly recommend downloading the LODE pay mobile wallet. Perhaps even more so than the website but you know, the mobile wallet’s done really, really well. It’s got a slick UI and all that. That doesn’t require much of an identification, for you to get started. You can literally just give us your name and your email, and you’re you’re off to the races. With LODE tokens, because they are a security, right, you do a little bit more in terms of KYC it’s not really invasive, it’s basically just a proof of address, you know, show me that you’re not on the sanctioned list…
NP: Oh, god.
NP: Yeah, right? And you know, you know proof of proof of ID, so like driver’s license and and a selfie pic of yourself to see that the pics match up. And then and then you can go buy, and claim your stake in the LODE Project. And again, we do this for the sake of protecting not just the project, but you know, the other the other individuals in this community, right? So got to do that regulatory work if you want to play ball.
KH: Right? Yeah.
Well, that’s really fascinating. So the, okay, so I understand the simple concept of of tying it to a physical asset to fight inflation.
NP: Um hmm.
DL: What what’s going to make this better for me than just going out to like pawn shops and buying my own gold and burying it under the tree in my yard?
NP: Yeah, for sure. I mean, for one you know, I get tired after that much shoveling.
NP: For two. For two, even when you go buy physical bullion, you’re paying a premium. Right, you’re, you’re paying a premium for, a one-ounce coin can run as high as a 50% premium. And we know that because we built what we call our price oracle, which scrapes data from tons of major bullion websites, and and giv- it lets us know what the price of a metal is, versus spot and you know, per tier, one ounce, 10 ounce, 100 ounces, etc, etc. And we’re able to tell you with confidence that you know, like a one-ounce coin will often have a 50, a 50% premium. And it can even go higher in some circumstances. And so you compare that, where we’re able to chop that that premium considerably down, you’re getting much closer to that spot price. So you know, you’re getting the metals at the cost of a fraction of what they, of what they retail for in the public market. And again, you know, you might have this one-ounce coin, good luck trying to find a merchant that’s going to take the physical metal, you know, versus where we’re where we already have merchants accepting digital gold and digital silver as payment, because they can easily swap between currencies that they need to, when they need to, for their for their local taxes, you know, pay- like paying staff, etc, etc.
DL: Wow. Well, I know, I know for a fact it doesn’t work out for, the other way, I had some actual silver coins that I needed to sell, to pay for some stuff, and I shopped around all the places in town that would just buy the silver from me, and I I was not getting the rate of silver that was on the market, for sure.
NP: Yeah, no no, and you’re never going to, right? And that’s the thing they they co-…
DL: You’re paying more and you’re selling it for less.
NP: Exactly. And you know, there’s always the futures markets. But again, with the futures markets, as we’ve seen with the whole Wallstreetbets scenario is you know, it’s essentially legalized gambling, or gambling is legal, bBut you know what I’m going for, right?
NP: It’s it’s such wild speculation. And in some cases, you know, you’re over-leveraging more than the actual stock, or inventory that was on-hand. So so with this, it’s a much more honest way of doing things, because you’ve been have the confidence, this isn’t fractional reserve banking, every AGX coin is backed, every AUX coin is backed, and and it’s redeemable for the metal, right? So there’s a certain level of honesty that comes to the table in the forefront with this methodology as well.
DL: So I could, I could, for instance, I could I could amass an amount of the AUX. And at some point, I could, could I decide, you know what, I really do want the physical gold that’s related to these coins. I could go and redeem those with you guys and actually get like, I mean, I’d probably pay for the delivery, but I could get like, the metals delivered to me, or I could go pick them up.
DL: Yeah, absolutely.
DL: Oh, wow.
NP: That’s, you know, and that’s really like at its core wi- what we want to have this system be about. We wanted to make it easy again, you used to be able to do this. And so to the best of our abilities, we’re going to provide provide that service for you guys. So the really, like I see it as an absolute win to quote End Game, you know? I see this as an absolute win, there’s very little financial downside. The only real downside is that, you know, it’s still early days in the market and, you know, financial adoption is on its way, but it’s not 100% there yet with crypto technology, right? So there’s still a battle to be fought on that front. But the more I go on the shows like these, and the more I talk with gentlemen like yourself, you know, there I sort of at least feel a level of enthusiasm for this concept because, you know, Millennials especially get screwed, you know, have been getting screwed. And people who are really thinking about how do we create a better system for the world that we live in? I think there’s a real desire for that kind of technology, and that those kinds of that kind of money and financial tools, etc, etc. Again, I you know, I think that’s part of the reason why Bitcoin has been so successful as it has been, you know. And in the cryptocurrency space at large, it’s been this like rallying cry for a different way of doing things.
KH: Speaking of Bitcoin, Bitcoin has really just kind of taken off as far as value goes, it goes on those incredible runs, and then also has those incredible drops. I assume with with LODE being backed by actual physical assets, I’m guessing it doesn’t have the same propensity to fall off, you know, 80% in a couple days?
NP: Yeah, well I mean, the difference between a Bitcoin and, a Bitcoin and and something like gold and silver is gold and silver have inherent value, right? These things just, like that we’ve used these things for thousands of years, you can argue that track record. Yeah, they do, they do fluctuate, but they largely retain their purchasing power when compla- compared to inflation. And and some people will argue, you know, Bitcoin maximalists will argue that, oh, Bitcoin has inherent value, because algorithms and trust and, but that’s all, that’s all based on people putting faith in something.
KH: I just had that argument with som- with a previous guest.
NP: You know if nobody wants to buy that, that thing, it’s not that valuable. But silver, for example, is one of the biggest commodities in the world. And it’s used in almost all modern electronics. So there is a floor, how low we are willing to go, because we literally need this stuff to build technology and to, you know, and to put products out into the world. And so it works great as a monetary tool in that respect, because there is that floor, and gold is similar. Although gold largely operates as a store of value that again, we just seem to like the shiny rock.
NP: We seem to like the shiny rock when it comes to gold. But that’s why we kind of lead in with the silver more than we lead in with the gold project. You know, gold is not going anywhere. It’s tried, it’s tested, it’s proven. But and they ha- and can, both of them, you know, comparatively have inherent value compared to Bitcoin.
KH: Do you guys have (inaudible).
NP: (Inaudible) get some hate mail now from Bitcoin.
KH: I know, right? Do you have, does the company have any plans of adding any other precious metals like lithium or platinum or, like expanding?
NP: (Inaudible) eventually. I think I think sky’s the limit, we’re certainly open to it as we as we get larger and and, you know, what we’ve done over the past four years is build the technological backbone to make this kind of stuff easy. So if we want to start producing, you know, lithium, or cobalt or anything like that, we could easily get this stuff under the same methodology we’ve already developed. Right now, the core mandate of the project is to successfully integrate these currencies back into the monetary system, right? To have people trading speculatively using them as stores of wealth for their, you know, for their wealth preservation, and using them functionally in their day to day lives for business. When we are at a point of critical mass on that side of things, I think it will, you know, open more doors to providing more alternative assets, you know, lithium, cobalt, etc, etc. And certainly there is appetite for it, right? It’s a, you know, we can do, we can do anything, just not everything at once, right?
KH: Right, yeah. Get one right, and then start adding.
NP: Like it’s the old Amazon method, right? Start with selling books and see how that goes for you.
KH: Right. So you mentioned you already have some people accepting tokens as payments. Do you guys have a list on the website, who’s actually (inaudible) the actual merchants?
NP: Yeah, we actually have lodemarkets.com where individuals like yourself or anybody can go on and start retailing their products with gold and silver, and everybody on there is going to accept AGX and AUX you know, while that’s not your local Starbucks yet, we are we are working on it. But those are those are business negotiations, right, and the closing cycles on those can take a very long time before you, before you reach the point where where you know, the ink is signed on on the paper, so to speak. So, you know, the other, the other areas that we’re really finding a lot of interest in is in on like corporate corporate. on corporate trade levels, big institutional players moving monies cross country into multiple currencies often have to pay really big FX rates. And we’re able to you know, borderline eliminate that sum through the use of this currency, these currencies. And again, because they’re stabilized and genuinely do a good job of of holding their value compared to fiat, there’s arguments for these institutions to maintain a balance in gold and silver, as well as in their in their operational expenditures and fiat currencies. Those guys are under NDA though.
NP: Oh okay.
DL: So all all, since these are crypto coins, just for some people that aren’t quite as informed, all of the information regarding the exchanges of these is kept on the blockchain?
NP: Yeah, so we go through multiple, we go through multiple layers with our system. So we have an internal ledger, with permission ledger called hyper ledger, and we have the public blockchains that go out to consumers. The reason for the internal ledger is is, it allows us to have again more permissions and do the account management as we need to. Especially if for example, if you come to the store and etcetera, etcetera, and you you start doing withdrawals or something like that, if you if you withdraw some silver from us come to the store, I don’t know what I’m thinking, we need to have certain we need to have certain functionalities with the ledger that we can’t have on a public, on a public blockchain. And what would happen is you would send your your tokens to us on the public budget, we would burn those, we would update the inventory on the hyper ledger, and then you would be sent your, you would be sent your precious metals. Right? And and so this is kind of our methodology there. The other big thing is, we’re interoperable, which means that we’re kind of blockchain agnostic. So for example, some exchanges may not use the Syscoin blockchain that we’re on, you know? And, but but maybe it’s a really high profile exchange, right? And we would really want to get on there because we think people in that crowd would would love it, we’re able to easily put our assets onto other blockchains like Ethereum TRON, etcetera etcetera, and provide them, and and we’ve built a technology that we like to call our relay that allows people to swap between these blockchains so that they can, they can use whatever assets are going to work on whatever platform, right? And that’s another big piece of the industry that is still trying to figure itself out. I don’t think the true holy grail of interoperability has been discovered quite yet, but this is our attempt at it, and hopefully, you know, three, four years down the road it’s it’s taken, and worrying like crazy.
KH: Well, it sounds like you guys got some momentum going already.
NP: Yeah, I mean, we’re active in over 100 different countries, so we’re certainly not hurting. You know, we’re encroaching on 8000 8000 members active, you know, and that’s a great place to be. People might be like, well, that’s not Facebook numbers, where’s the two point (inaudible) billion people, but financial products do tend to grow pretty slowly, comparatively, if you look at the numbers,
KH: So do podcasts.
NP: Exactly. right? So podcasts and financial apps do tend to grow very, well it’s much slower. But we’re pretty much in step with the industry standards of other major institutions that have have done successful, the Wealth Simples, the Revoluts of the world. So that gives me a lot of confidence that we’re on the right track. And again, because the past few years have all been about providing things in a legal and compliant manner, there are limitations on what you can say until you’ve crossed those hurdles, right?
NP: You know, and so now that we’ve cleared those hurdles, now I’m going out into the world and you know, singing the praises and preaching to the choir and so on.
KH: But how did you get involved with with the LODE Project?
NP: That’s a great question. Actually, I was already involved in the crypto space I was working on a blockchain problem with broc- a blockchain project based around recruitment at the time. Project didn’t end up being a success, but that’s okay, that’s that’s how the tech world works, fail fast as they say. But through that, I got an introduction to LODE. I got an introduction to LODE, and we were just entering into the crypto winter, looking back on it. And for some people they may have had the intuition to just be like well why why would you do this, like the market’s going down, like Bitcoin’s going crashing, man, like can’t you see the sky falling? But when I look for projects to work on, as well as projects to invest in, I’m always looking for things with a real practical use case and application.
NP: You know, and when you take a look at the gold and silver market you know, they were doing all right, and if this is a precious metals, more so I don’t want to say more so, but like you know, the value of it is derived from the precious metals versus being derived from raw speculation, then you know, that gives me a certain level of comfort. And I said okay, this this has some stopping power, this has the ability to weather the storm and weather the cold and you know, it’ll be spring again eventually. And lo and behold, here we are, we’re in the next bull run, and the markets are going crazy and it’s a great time for us. You know, we’re we’re knocking it out of the park right now.
KH: I always, I keep thinking of like the the Beanie Baby craze when I think of Bitcoin.
DL: The tulip, the tulip bulbs?
KH: The tu- yeah, at some point someone’s going to say what what am I doing? Why?
NP: Yeah, don’t get me wrong, I think if you, think Bitcoin is here to stay, if you look at…
KH: Oh yeah, for sure.
NP: Yeah, you know, but I think the the best metaphor is, is digital gold, even though they’re invaluable for different reasons. It’s slow, it’s not practical, like I’m not going to stand for for 10 to 30 minutes at a Starbucks waiting for my transaction to go through.
NP: You know (inaudible) line up, and the Karens in that lineup are just gonna like, you know, they’re gonna murder me for that pumpkin spice. So comparatively, like Bitcoin is not great for for for trading commerce, and because of its volatility, even if you believe it’s going to 100,000 you know, eventually or a million eventually, if it if it still goes through swings where it’s losing 50% of its value at a time or or 20% or 30%, how the heck are you supposed to price your business? Like automatic pricing? Roughly, roughly equate to the dollar. It’s just, it’s just sophisticated, and if there’s one thing I’ve learned in the tech space is if you really want to be sticky, you got to make it easy.
NP: Right, you got to make it easy.
DL: Real quick, before we get too far past it, I did want to explain to our listeners, the tulip bulb reference is a very famous incident from I believe Amsterdam trading, where at one point, tulip bulbs became worth more than gold, just from speculative trading.
KH: As I think there was, wasn’t there commercial not too long ago that kinda, yeah, it was pretty much all about that. I think at one point some guy finally just stands up and says it’s just a tulip.
DL: It’s just a tuplip. Right?
KH: Yeah, then the price crashes.
DL: So the concern is is like, is Bitcoin just the tulips that everybody, because it’s new and it’s what’s being traded?
KH: And we joke about it, but I mean, I don’t think that’s the case.
NP: My running joke, my running joke is like, what if, what if, what if Blockchain is just Blu-Ray DVDs?
NP: (Inaudible) to iPhones right?
NP: You know, there there’s always that potential out there, the next leading innovation could come along, but industries move really slowly. And as far as I can see, most major financial institutions are integrating blockchain into their into their business, and I think the technology is going to be around for a while if you if you think that…
KH: I think we saw a story just recently that Mark Cuban was going to start paying his basketball players in Bitcoin. Is that, am I remembering that right, Dan?
DL: I don’t recall.
KH: I thought you brought that up.
DL: No, that wasn’t, that wasn’t me.
NP: And you’re gonna see more of that, right? You know, Elan musk farts and you know, the market will swing as part of as part of the risk of an, volatility of cryptocurrencies. And to go back to your your other question, Dan, about you know, is it is it just the tulip?
NP: Is it just a tulip? What blockchain and distributed ledgers are are conceptually, and what they represent, I think is where most of the value is derived from. So the fact that the algorithm, the technology itself provides a service of not needing a counterparty to transfer value, or I shouldn’t say, not a counterparty, but you don’t need an institution to play a middleman, in the transfer value. That is, that is the main value proposition of Bitcoin. Now, how much that technology is worth is up to the people to decide. But, you know, I do think there is some inherent value. And it’s kind of the poster child for what distributed ledger technology can do. And that holds, that holds weight in of itself,right? For better or worse. It’s it’s like one part, yes, it’s a tulip, one part, and but anything is a tulip if you really look at it.
DL: It’s speculative.
NP: Oh, and not even just speculative. Like, why is a Lamborghini worth half as much as soon as you drive it off the lot? Right?
DL: Oh, yeah yeah.
KH: Going going back real quick, god damnit, lost my train of thought now. Dammit, I had a good question for you. All right, never mind, continue. I’ll think of it.
NP: I mean, it’s like, but you get, you get what I’m saying here, right? Like all things are only valuable because people determine that they are valuable. And, and why they are valuable will vary, will vary substantially, some have more credible reasons for being valuable than others. Those are just I like, I like the you know, I like the Bitcoin so the Bitcoin has value, right?
NP: Bitcoin does provide that service, you know of again, value exchange without intermediaries, that has a lot of implications. And right now, that’s really important to people. Right? The fact that this isn’t controlled asset by any one institution anywhere, is a pretty provocative sentiment and thing to exist. Interestingly enough, I think if Bitcoin was run by a corporation, like a company, there was a CEO Satoshi Nakamoto, and he was all out in the public, I don’t think Bitcoin would have gotten as far as it’s had. I think it is the fact that it is wholly independent of just about everything.
KH: Okay, that reminds me what I was about to ask. With the institutions actually getting involved in Bitcoin, I mean, isn’t that gonna be kind of counterproductive to the whole purpose of it?
NP: Yes, that’s that’s the short answer of it. But, you know, it goes to the old saying, if you can’t beat them, join them.
KH: Right? No, I mean, just for the people who are into Bitcoin, if they start seeing major institutions buying up big giant blocks of it, and being able to exert some sort of control over it.
NP: I mean, there’s a there’s a, there’s a huge sentiment of that in the market, in the market right now, and that’s part of why you’re seeing more of a decentralized finance movement that are providing you know, services that banks provide without, without that middleman, you know, decentralized liquidity pools, and so on and so forth. And, you know, like I, like I was saying, it was like, if you can’t beat him join them. These institutions nearly crapped their pants four years ago when Bitcoin started blowing up to $20,000, everybody was like, it’s a scam, it’s a scam, it’s a scam, but it didn’t go anywhere. And now you have all these financial advisors and experts going on saying, like, yeah, this is an essential piece of the portfolio, you know, moving, we’re moving a portion of this, these retirement funds into Bitcoin and like, you know, the the Mark Cubans and the Elon Musks and the PayPals, and on, so on, now, they’re all and now they’re all preaching to the choir, because they figured out how to integrate it into their business model.
You don’t have to use those services.
NP: You don’t have to use the you know, the PayPals of the world. You can use software that is designed to be autonomous, where people can’t cut you out of your money or lock you out of your money, and you know, put the put the stop on you. You know, those solutions are out there. And LODE is building itself in that direction. We kind of have to bootstrap things from the ground up. But there is a strategy in place that as the ecosystem gets bigger, that we can get more and more hands off until eventually the thing just runs by itself.
NP: Is this is a mic drop?
KH: That’s kind of what it felt like.
DL: Boom. End of story.
DL: Everybody buy Bitcoin and cryptos.
NP: Well, I will say though, that you know, while while cryptocurrencies are easily the most hyped up part of blockchain technologies that lots of practical applications, real estate transactions, medical records identity, okay? Like all of these are really really practical applications of blockchain technology and really, blockchains can be valuable anywhere. Ledgers are core to your best practices of your industry or your business, right? So I’m excited to see that part of the industry come out more, and see how it’s integrated with them. Yeah,
KH: I was gonna say can you actually explain what a blockchain is. I mean, obviously, I know, but maybe the listeners don’t?
NP: Yeah (inaudible).
KH: No, I don’t either.
NP: Now I there’s a couple different ways, I’ll use a couple different metaphors to help.
KH: Yeah, please.
NP: It’s like a virtual handshake where, right now with your money system, when you go to make a payment, it’s two payment, it’s two, it’s essentially two banks agreeing that value is being transferred between with each other.
NP: Right (inaudible). Blockchain removes those banks, and is a computer algorithm, or sorry, it’s an algorithm that uses multiple computers to process this transaction. It’s called the consensus algorithm. And these computers all come to an agreement that yes, this virtual handshake is happening, this transfer of funds are being sent. And they send the of course, the transaction to the to the receiving party. And they’re stored on on, that information is stored on blocks. A good metaphor that somebody gave to me even just a couple days ago was like, it’s a Lego, it’s a Lego statue, or, like, it’s a Lego block building that you can (inaudible).
KH: It seems overly complex.
DL: It’s like a Lego block building that you can’t?
NP: So it’s like, it’s like a Lego that you can’t take apart.
DL: But once once the block’s been added, it’s there.
NP: Exactly. That’s what I’m getting for. That’s kind of the metaphor, that I…
KH: Worst statue ever.
DL: So you can add a new block, but you can’t take blocks away.
NP: Exactly. Yeah. So this is where the whole immutability component comes in. And because because, you know, I said, like a couple computers for this example, But realistically, you know, blockchains, like Bitcoin are mined and processed on tnes of 1000s of computers, all across the world not owned by any one central agency, and just about anybody can, you know, start mining Bitcoin, although it’s very expensive these days.
NP: And because of that, again, there’s no central point of failure to the system. And adding to that idea that you know, it’s not owned by any one individuals, this truly autonomous system. But I I feel like Satoshi Nakamoto is just going to show up one day and just like whip, whip off the veil and be like, haha, I control everything.
DL: It’s funny, because I was reading through the Coin Wallet IPO information, and they had to publicly disclose the things that could disrupt their business model, and they said that him showing up and unveiling himself would disrupt the value of Bitcoin.
NP: That is hilarious, and I mean, it’s true though, right? I mean, if it’s gonna happen I hope it’s that way. I think it would be hilarious.
DL: Here I am, it’s been me all along.
KH: Find out it’s Bill Gates. God damn.
DL: I would have gotten away with it too, if it weren’t for you meddling crypto miners.
NP: Yeah see, you’ll never work again in this town. Follow you wherever you go. You took that vaccine, now I’ve got you.
Yeah, now you’ve got the nanobots in your skin. I control your thoughts.
DL: No s- do you think that would really be so disruptive, or would it just be a fun time for people who are into cryptocurrencies?
NP: I think the words disruptive and fun time are synonymous for people who are into cryptocurrency.
KH: Oh, god, that’s an excellent point.
DL: That’s good. That’s good.
NP: Yeah, I do think it, here’s the thing, like almost every cryptocurrency under the sun has gone through some kind of legal battle at this point. If not directly, then vicariously through other projects that are getting the hammer thrown at them. And the like, the question is with like, with Bitcoin, who do you sue?
NP: Like like, wha- who are they going to point fingers at? There’s nothing they can do about it.
DL: Whose fault is it? Who’s at fault?
NP: Who’s at fault, right? I’m Satoshi Nakamoto, the Infinite supervillain, that’s going to make me laugh. You know, and so that that whole premise allows Bitcoin to neither be a security and like to not be a security even though it has this crazy wealth appreciation that obviously people are buying into the market so they can get in on. Other circumstance, that would be classified as a security and there would be, you know, a huge legal battle, and suing for the SEC to get their cut, and to try and put even more rigor in regulation.
NP: Yeah, you know, Soshi Nakamoto comes out of nowhere, all of a sudden there is a finger to point at.
DL: I see.
KH: Oh, okay.
So that’s why it would be disruptive, and because that would arguably shift market sentiment on what Bitcoin is and how Bitcoin operates. And that’s just me speculating, right, this isn’t me being (inaudible).
KH: Mm hmm.
NP: But I do think that if he showed up, it could have the potential to shape markets. On the other side. I think we’re also burned out from like trauma and and the past four years in general, that like, we could literally be like, yeah, so what, you know?
KH: Unless it was Trump. (Inaudible) half the world would lose their mind.
DL: I invented Bitcoin, it was me.
KH: It’s so great.
DL: I wanted to call it big coin, they overruled me. ‘Cause it’s not a little bit, it’s big. Oh, yeah.
NP: It’s huge.
DL: It’s huge. Well, like in, like exam- for example, when the Capitol building was going through its turmoil, and the markets didn’t blink, they were like, oh yeah, something’s happening in Washington.
KH: Yeah, that was bizarre.
DL: It’s just a Wednesday.
NP: It was another Wednesday in the past four years. And, you know, I don’t want to dive too deep into politics, but like I think is an indicator of where people are at mentally as well. It’s the same in the crypto boom in 2017. You know, China had like a stranglehold on Bitcoin price. So like you’d wake up one morning and be like, you know, crypto’s legal, yay, market goes crazy. You go to sleep again and wake up and like, crypto’s banned, oh no, the market collapsed. And it was like that for like months.
NP: You know versus now, it’s like, yeah, whatever. Because we’ve reached a point of critical mass where there are no enough people in the system, that, you know, a few people even, or a few whales leaving don’t necessarily (inaudible).
NP: Impact the market as big as they used to.
DL: Yeah, I hadn’t hadn’t really thought about that, in its infancy a Bitcoin, how one whale leaving can really deflate the value.
NP: Yeah, in the in the early days there was, because you know, it was it, because they have such huge sums compared to everyone else.
NP: And then, you know, for example, if if, let’s say, PayPal, Tesla, Elan Musk, they all pull out simultaneously, right? Like, we’d see a probably a nominal dip to an extent, but will happen is people would catch wind of that, and market psychology would take hold, and people would go into panic selling probably, right?
NP: Because those people carry audiences with them, okay, that will cause a greater impact in the market. So who’s to say? Maybe maybe people would care if sato-Satoshi Nakamoto shows up? Maybe he wouldn’t, but yeah I don’t blame them for putting that in there why this would disrupt your business model.
KH: That’s definitely a concern.
NP: Top 10 concerns.
DL: Yeah, it’s well, it made the news article.
NP: (Inaudible) point, right?
NP: And cryptocurrencies also love kind of to poke fun at themselves, sometimes, like we’re, a big chunk of them are big meme lords. You know, lambos (inaudible) moon, HODL there’s this kind of playful attitude around it, which I think is fun, in some senses. Like you’re you’re taking a group of people and getting them really enthused about wealth generation, which is awesome. People need more financial literacy, people need to get educated and start building digital strategies for themselves. On the other side, when you’re trying to do business, and you’re trying to say this is the future of money. And then people go on there, and they’re like, lambos on the moon, bro. You know, it doesn’t, doesn’t hit the way you want it to hit in the pitch, you know. So four years later, I’m glad that the industry has has matured as much as it has, and we have a lot of really responsible players in the place now, lending legitimacy to the practices that we’re trying to put in.
DL: Now, it’s, to sort of circle back around to the LODE Project. One of the questions I had that the conversation got away from, what’s what’s the speed, like let’s say I buy a bunch of LODE tokens. How fast do I accumulate the AXG and a AUG?
NP: AGX. AGX and AUX. So the LODE tokens, we have a payout every 52 days, and we take a snapshot every 77 days to do the accounting, right? Then we issue the rewards every 52 days. So it’s right now with, they’re relatively nominal payments, and this is because we have to get to a point of critical mass first
DL: Right, right.
NP: (Inaudible) heavy trading, the same way Bitcoin is trading for millions of dollars on exchanges, we need to have, you know, tens of thousands of people, hundreds of thousands of people, millions of people using this app. By the time we hit that point, the system will be yielding very, very, you know, generous returns. But realistically, we’re still in the infancy, right? Most people just assume that, like, I understand we live in a time of immediate gratification. Reality is is building a real business and projects take time, Amazon didn’t just pop up overnight.
KH: Yeah, it was 20 years.
NP: Exactly, it took 20 years. And, you know, I think I think at the rate we’re growing in even just, you know, a couple more years, it’ll be absolutely mind blowing, even next year, it will be night and day from where we presently are. So it does, it is more of a long term play. The other thing that LODE tokens do have going for them is that they appreciate, they could appreciate a- you know, once we do our IEO, and our initial exchange offering, and they can start being traded and, on regulated exchanges, you know, you know, people could people could speculate that we’re going to do great, and the price appreciation on your LODE tokens could go up, as well as you getting that dividend, right, so. So so there’s there’s a couple ways of looking at that. And, you know, we’ve had independent third party, you know, investment boutiques and firms take a look at what we’re building and give us their estimations. And they’re, they’re pretty ambitious, right? Like, again, I don’t want to, I’m not a financial advisor, and not (inaudible).
KH: Yeah, don’t worry, we’ll lead off with that disclaimer.
DL: None of us are.
NP: You know, all those disclaimers are there. But you know, like, I I’m optimistic, right? Like, I think that the, this thing really is gonna go to the moon. I think this is gonna change the world for a lot of people, especially in developing nations, where you are stuck with either the US currency, which, you know, has its own depreciative aspects about it. And you know, or you’re in a in a hyperinflationary dictatorship type country where where your currency is shot, right? So this can stabilize and be effective for lots of people who really need something like this so.
DL: Sounds really great.
DL: I’m, I’m really excited to see how far it can go.
NP: Thanks, guys. I really appreciate that. And, you know, I’ll just do a quick little shameless self promotion here. You know, if you you’re interested and you want to download…
KH: We’ve also we’ve also got a little fun segment for you to do to if you’re, you’re interested.
NP: Absolutely, I have 10 minutes for you guys. Let’s do it.
KH: Okay, we’ll do it, we’ll make this quick, so that way you can get…
DL: Get that plug one more time.
KH: Yeah, actually, yeah, go and get that. So we make sure we got that.
NP: For sure, guys, and I appreciate it. So if you’re interested in just downloading the mobile wallet and getting started today, you can head over to lodepay.com L-O-D-E pay.com. And immediately download the wallet and get, buying your first digital golden silver within within a few minutes. If you’re interested in maybe claiming a stake in the system and going in for the long haul with us and the LODE tokens, then you should head over to lode.one, which is where you’re going to have all of the really nice investor information, business plans, etc, etc, to project papers etc. to to read about the project and its sort of vision for the future. If you want to check us out on Telegram I highly recommend it, you can access it from either website. We’re really friendly group of people. And additionally, I do my own little news show on LODEPay Media, which you can search up on YouTube at LODEPay Media, and on most social media websites. So that’s this way to get in touch with the project. If you feel like telling me I’m an idiot on Twitter, you can find me @NicholasProuten so N-I-C-H-O-L-A-S P-R-O-U-T-E-N on Twitter.
KH: We’ll, we’ll put links to all that in the episode description too so people can find it there.
KH: All right, Nick, I see that you’re a Canadian. I think you said you’re in British Columbia right now. Right?
NP: I am indeed in British Columbia.
KH: Are you a South Park fan?
KH: All right. Good now on Cuisia on your Canadian South Park knowledge.
NP: Oh, no. Oh no, I don’t know how I’m going to do on this one. All right, go for it.
KH: All right. First question. Who is the biggest dick in all of Canad?
NP: Oh, shit. I know this. Brian Adams.
DL: Brian Adams.
KH: No, not quite. that’s in real life.
NP: There was an episode was like we’ve already apologized for Brian Adams several times.
DL: I believe it was Scott. Scott is the biggest dick in Canada.
KH: Yeah, the biggest dick. Scott the dick.
DL: Scott the dick.
KH: Alright, oh for one, huh? Maybe we’ll have to start you off with an easier one. What makes up 1/3 of Canada’s national income in the South Park universe?
NP: Oh my god, you guys I’m never gonna get these.
KH: Think about the most famous thing they have going for them that the boys all love.
NP: Maple syrup. I don’t know.
KH: Terrance and Phillip.
NP: Oh, Terrance and Phillip, right.
DL: That’s a real show right?
KH: That might have been actually a little harder.
DL: South Park didn’t make that up.
KH: Wait,it has to be right?
NP: There is theire show in their, in their…
KH: That’s not real?
KH: Okay, Okay, how about this? Can you name one of the traditions from the royal wedding?
DL: The Canadian Royal Wedding.
KH: As is traditions, as is tradition.
KH: The episode was called Royal Pudding.
NP: Oh, my god, you guys really did your research for this one.
DL: I think Kyle’s just a major South Park nut.
KH: That too.
NP: I mean, I love the work that they’ve done. You know, it’s a fantastic show. I haven’t kept up with like any of the recent seasons, but like, you know, the movie Blame Canada, you know, we’ve been doing it for years like…
KH: Okay, that’s another good question. What did the, when Canada went on strike who replaced them internationally?
DL: I don’t remember.
NP: I dont remember either.
KH: Do you remember what they got when they ended the strike?
NP: No, man.
KH: Coupons to Bennigan’s and bubblegum.
NP: Oh my god. Oh look, chalk it up to being a bad Canadian, all right? I don’t know apparently, don’t know my own South Park lore. And, you know, I don’t like maple syrup. And I’m not a huge fan of hockey either, so I’m just like…
KH: Oh, no. So what about…
DL: Wow, so you don’t have a hockey name even? You don’t even have a hockey name?
KH: We heard that nine out of 10 Canadians play hockey and the other one is lying.
DL: That’s what we’ve been told.
NP: I’m either lying, or my mother should unveil some truths about my origin of birth. So you know.
DL: Well, we actually absolutely love Canada. And we’re really glad…
DL: Yes, we do.
DL: That you came on our show. We’re really, really glad to have you here. This has been a great (inaudible).
NP: Absolutely man, guys. It’s been a, it’s been an absolute pleasure. And we’re we’re fond of you guys up north as well. You know, big fan big fan of the United States. Like, that feels weird to say but like I mean it…
DL: Without laughing? Yeah, I can’t say that (inaudible).
KH: Right. Yeah.
NP: You guys have been getting like a big, you know, probably not the most popular perspective in the media over the past few years but you know.
KH: Most people I know when they travel internationally, they wear Canada shirts.
NP: Yeah, isn’t that weird, I think since the Bush administration.
KH: Yeah, it was about that time when that started.
DL: Yeah, I was, I went traveling in 2006, and several people, I was going to South America, several people said, remember when you’re down there say you’re from Canada. I’m like wow, okay.
KH:Everyone loves Canada.
NP: You guys gave us South Park and Team America World Police, right?
KH: As is tradition.
NP: As is tradition.
DL: As is tradition. All right, folks. This has been a really great episode. We’re glad, we want to thank Nicholas, NP: again, for being here. We’re going to have all the links to his stuff and the LODE Project in the episode description. Thanks for joining us. We’re so glad you all came. Remember, rate, subscribe, tell your friends. Tell your enemies. Tell your pets. Tell your pets enemies. That’s really our target demographic. We want that neighbor cat that your cat hates.
KH: And don’t hate on us about Bitcoin. We were just having fun.
DL: We’re just having fun.
NP: (Inaudible) yell at me on my Twitter. They can yell at me.
KH: There you go.
DL: Hey, all right. Any last final parting words, Kyle, before we wrap it up?
DL: Oh, okay, I guess we’ll just play the ending…
KH: Have a good one, folks.
DL: Music, and talk to you soon. Happy trades folks.
DL: 2 Bulls in a China Shop is an entertainment program, and all thoughts and opinions expressed in the show belong to the hosts and not of any company. They are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide entertainment about stocks in the financial industry of trading. If you make trades based on what you hear in the show, you assume all risks for those trades.
Who is Nicholas Prouten?
A veteran in public speaker and team leader able to pitch projects, ideas and concepts concisely and effectively while motivating and driving on target, measured results. With nearly a decade of experience in the tech sector and half a decade in the blockchain industry, Nicholas is an expert in driving project growth. Using his unique leadership style and vision, he cultivates seamless paths to create value and transcend goals. A firm believer that diversity is strength, Nicholas has worked in a wide array of industries, ranging from cybersecurity, gaming, real estate, entertainment, and blockchain.
What is the LODE Project?
LODE is a blockchain-powered payments ecosystem providing investors with stabilized digital currencies backed by gold and silver. Regulated by the German Financial Supervisory Authority (BaFin), the project has exercised due diligence to minimize risk for a growing community of investors, with its SEC license pending. Bridging the old and the new, LODE’s asset-backed digital utilities, AGX (digital silver) and AUX (digital gold), are designed to serve users with a pragmatic method to transact with borderless, low cost, stable mediums of exchange, providing an easy on-ramp to other blockchain assets as well as instant conversions to local fiat currencies like USD, EUR and more.
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