Why Bitcoin Is Different Than Other Cryptos

Cold Open: Pick The Winner From The Sand

0:00 DANO WEIR: Get yourself situated. All right, let's go. I got a little thing—I need some energy, you know, I got a little thing I always have to start the episode with, a little thing. I know there's going to be a thing. What's the thing? Get it? This is one of those Zen gardens, right? It's a Zen sand garden. Okay, okay. And if you're watching—if you're listening to the audio, I've placed a small eight inch by eight inch black box in front of Daren. It's got one of the little rakes.

0:28 DANO WEIR: It's got a couple of stones, and inside it are thousands and thousands of grains of sand.

0:36 DAREN BLONSKI, CFP®: Wow, Dan. That's really cool.

0:38 DANO WEIR: I want you to reach in, because it's going to be so easy, and pick the winner from those grains of sand.

0:49 DANO WEIR: It's easy. There's just one winner.

0:51 DAREN BLONSKI, CFP®: Definitely this one.

0:54 DANO WEIR: Is that Bitcoin?

0:55 DAREN BLONSKI, CFP®: I don't know. We'll find out.

0:58 DANO WEIR: But you know what's even cooler is after the fact, everyone who picked up that grain of sand will be like, ‘See, I was so smart.’

1:03 DAREN BLONSKI, CFP®: Oh, yeah, I should have known. It was the black one. And all the rest were the same color.

1:06 DANO WEIR: That's right. That is how many cryptos there are. And there's only one Bitcoin.

1:12 DAREN BLONSKI, CFP®: There is only one Bitcoin. That's right.

1:17 DANO WEIR: Financial confidence for your hip pocket.

1:20 DAREN BLONSKI, CFP®: Money is really just energy.

1:22 DANO WEIR: Thanks for checking out. It's all monies.

Welcome Back: Why Bitcoin Is Different From Other Cryptos

1:28 DANO WEIR: Bitcoin is the survivor in the crypto world. Welcome inside the Sonoma Wealth Conference Room. We are Sonoma Wealth Advisors. We're a financial advisor in the town of Sonoma. My name is Dano Weir. I'm the marketing director. I'm a podcast host, and I'm joined—

1:43 DANO WEIR: My co-host is Daren Blonski. He is a founder of the firm. He's a certified financial planner, an early supporter of Bitcoin. And today we are talking about why Bitcoin is different from other cryptos. I want to say upfront, because you have to say this upfront: we're talking about Bitcoin as an asset today. We're talking about some of the realities of the crypto market. A lot of times on the internet, when you see people start to talk about crypto, start to talk about Bitcoin, the end of it is some sort of sale, the end of it is some sort of, ‘And you need to do this.’

This Episode Is Educational, Not A Sales Pitch

2:18 DANO WEIR: I'm telling you right now, the end of this episode is not that. This episode is for educational purposes only. And we're talking about the realities of what's happening in the market. Really, whether you like it or not, this is a thing, and something that you've known about for a long time.

2:34 DAREN BLONSKI, CFP®: You know what's funny about—I learned about, I dismissed crypto and Bitcoin and everything.

2:40 DANO WEIR: Who wouldn't?

2:41 DAREN BLONSKI, CFP®: Who wouldn't, right? Well... See, the people who didn't are now brilliant, because that was that piece of sand analogy, right? It was me. It was my 72-year-old dad at the time who was reading—he used to read The Economist religiously. It's a magazine that I don't know if people read anymore. But he would read The Economist religiously, and he's like, you know, D—because he used to call me D—‘Be like, you know, D, this crypto thing, there's really something to it.’ And me being a financial advisor coming from a more traditional investment background, I was like, ‘Eh, this is just—you know, this is just hooey, hooey.’ But that question, when he said that, I was like, why is my dad dialing into this? And I started to just learn a lot about it, research a lot about it, and that's what got me going down that road. And I dove deeper into it as we went and learned a lot more about it. And ultimately have come to the conclusion that it's an important asset class, right? It's not everything. It's not something that we're going to be religious about and all-in kind of thing.

3:40 DANO WEIR: I spend only Bitcoin. I live Bitcoin. I only talk to you if we're on the blockchain.

3:44 DAREN BLONSKI, CFP®: It's a diversifying asset is generally how we see it at this firm.

3:50 DANO WEIR: Correct. And I think that's a healthy way to see it, right? I think just as much as seeing it as the end-all be-all is one approach, but the other side of that is completely dismissing it. And I don't think anymore you can dismiss it, within we're going to talk about in a little bit—

Crypto Goes Mainstream: Mortgages, Banks, And Regulators

4:05 DAREN BLONSKI, CFP®: Today, Secretary Pulte, who put out an executive order basically allowing for now crypto and Bitcoin, et cetera, to be used as an asset when applying for mortgages, which is big news, right? So that's like, hey, the banks are dealing with it now. Chair Powell yesterday just said that banks are free to do crypto activity now.

4:29 DANO WEIR: Whereas before they were being very limited there. And now we have Fannie and Freddie Mae, who back all the mortgages, saying, ‘Hey, guess what? You can use it now.’ So I think it's coming into the highlight. I kind of jumped our show ahead a little bit, but I think that's an important cue in that—like, you have to have an opinion about it.

4:45 DAREN BLONSKI, CFP®: And your opinion might be, ‘I think it's garbage and a waste of time.’ I think that would be misguided at this point. You can be like, ‘It's something, but I don't know what it is,’ but you can't say it isn't anything anymore.

4:56 DANO WEIR: And what—again, the purpose of today's episode is education. So specifically, if you start opening your mind up to crypto, you say, ‘Oh, well, then I like all cryptocurrencies.’ Well, let me just tell you that in a previous episode of this podcast, where Daren gave me a deep dive into everything about Bitcoin, I had a screen—

5:19 DAREN BLONSKI, CFP®: We're going to—quite go everything, everything that he knows.

5:21 DANO WEIR: A lot of things. Everything that he knows. One of our most popular episodes. And during the production of that episode, I flashed up on the screen behind us just what seemed like a very natural graphic to show, which was a bunch of cryptocurrencies. And so I had Ethereum up there, I had Doge up there, I had Sol up there.

5:41 DAREN BLONSKI, CFP®: And the level of—what's the phrase I'm looking for? He was incensed. He was just like, ‘Don't you dare put the Bitcoin logo next to the Shiba Inu logo,’ because in your mind, and as I've come to learn, not even close, not even close. So the point of today's episode is to show why that's the case.

6:08 DANO WEIR: Yeah. Well, and I think it's—again, there's some important factors for why Bitcoin should be looked at differently than the 17,000 different other cryptos out there, right? So for people to understand—

6:21 DAREN BLONSKI, CFP®: Crypto is generally referred to as a digital currency. It's a way to recognize value digitally. So people say, ‘Well, why do you even need that? I just believe in gold or houses.’ Well, the reality is more and more of our life is becoming digital, digitized. Most of our lives are already digital and digitized, including every tax form you've ever filed to the IRS is digital. So whether we want to accept that as a part of our reality in our world, it's delusional to think that it's not already in place.

Crypto Is Already A Digital Currency You're Using

6:57 DANO WEIR: Here's a great example—God, you brought that up because I thought of this after our last episode. In addition to hosting the show together, I work for Daren. I work at his company. And so that means that I get a paycheck from the company.

7:14 DAREN BLONSKI, CFP®: He has never handed me cash.

7:16 DANO WEIR: Right? Correct. So I have only been paid digitally.

7:20 DAREN BLONSKI, CFP®: Right.

7:21 DANO WEIR: So, I mean, to say that you're so incensed or you're so against digital currency—think of it, you're getting a direct deposit. That's digital currency. It came from the Fed. Who created it digitally?

7:37 DAREN BLONSKI, CFP®: But, you know, so just again, if you're thinking, if you're trying to think about what even all this is, the 17,134 total cryptocurrencies, you might already be kind of using one. So this is just some stats to start with. This is from an article written on explodingtopics.com.

By The Numbers: 17,134 Cryptocurrencies And Counting

7:56 DANO WEIR: 10 years ago... Isn't there a game called Exploding Kitten?

8:01 DAREN BLONSKI, CFP®: 10 years ago, so 2015, there was only 564 cryptos. Bitcoin is the original and first crypto.

8:10 DANO WEIR: Today—well, that's not—

8:10 DAREN BLONSKI, CFP®: It was the original crypto that hit a network effect, which I'll talk about in a minute. But there were others before. They just weren't recognized at all.

8:20 DANO WEIR: Not in a meaningful way.

8:20 DAREN BLONSKI, CFP®: Well, now there's 17,000, according to this article. The total market capitalization, which is how much is it worth as an asset? According to this article, it's $1.32 trillion.

8:35 DANO WEIR: Which is not much, really, in the scheme of things.

8:39 DAREN BLONSKI, CFP®: It's more than it was, but you've got to think, there's trillions and trillions of dollars out there, right? I mean, some of the institutions we work with have 10 times that in trillions. It's something, but it's not everything.

8:51 DANO WEIR: But the market cap of Coca-Cola is like $300 billion.

8:56 DAREN BLONSKI, CFP®: Yeah, it's bigger than any major company by far.

9:00 DANO WEIR: This is not just your crazy nephew who's got a little online account anymore, obviously.

9:07 DAREN BLONSKI, CFP®: But it is that too, and that's the confusion. Yeah, right?

9:10 DANO WEIR: Yeah. The trading volume of all cryptocurrencies per 24 hours is currently—so what's happening, the trades that are happening—is $172 billion a day is trading hands in crypto.

9:23 DAREN BLONSKI, CFP®: Bitcoin has the highest current market cap, at approximately $650 billion. So if you took all the Bitcoin and what it's worth at the current price—this was as of April, this article was written, so it's actually probably slightly different now, but this has $650 billion. Its nearest rival is three times less, which is Ethereum. So it's 3x the nearest rival when it comes to its market capitalization. 8% of the population in the United States trades crypto. Asia has four times more cryptocurrency users than any other continent. And 95% of crypto holders and crypto-curious people—think about that phrase, are you crypto curious?—they're at least aware of Bitcoin. So with that said, why is Bitcoin different to you than any other crypto?

10:17 DAREN BLONSKI, CFP®: I think one important point, and I want to go back to that point about Asia, right? And if you think about in the United States, we take for granted that we can go down to the store or go to the corner bank and we can get a US dollar in our hand. When you think of many of the other currencies around the world, there's risk withholding that currency. Their governments are either inflating it too much, it's being deflated, it's not backed by anything necessarily—not that the U.S. dollar is backed by anything, but there's currency risk. We Americans forget that our reserve currency, the dollar, is the U.S.—

Currency Risk And Why The Dollar's Trust Matters

10:50 DAREN BLONSKI, CFP®: Reserve currency, the dollar is the reserve currency of the world. And what that means is that everybody wants to transact in the dollar, because it comes with it the full power of our military, which we just saw on display, and the trust of that dollar, even though we're printing like crazy right now. If you live in some of the other countries, their money is not worth anything. It's just—it has no trust in the system. So I think as Americans, we take that for granted very often. So if you think about in Asia, why is there more users of cryptocurrency?

11:26 DANO WEIR: Because a lot of the—

11:26 DAREN BLONSKI, CFP®: The currencies they have to transact in are complete junk, right? So they'd rather get it into something that at least has some value, because getting dollars into your hand is not always that easy if you live in another country.

11:41 DANO WEIR: You want an example? Speaking of a small country?

11:43 DAREN BLONSKI, CFP®: Sure.

11:45 DANO WEIR: This is way down a rabbit hole.

11:46 DAREN BLONSKI, CFP®: Yeah.

11:47 DANO WEIR: Here we go. So an acquaintance of mine—this is a radio guy who is a world traveler. His name is R-Dub. You ever heard of the show Sunday Night Slow Jams?

11:59 DAREN BLONSKI, CFP®: I have not.

12:01 DANO WEIR: It's exactly what it sounds like, and he's a great guy. But in addition to hosting this nationally syndicated radio show, he's really into world travel, and he has actually created his own country on property that he's bought in Southern California, and he has declared that he is his own micronation, Slow Jamistan.

Slow Jamistan: A Micronation's Currency Problem

12:22 DAREN BLONSKI, CFP®: And he's in charge of it, okay?

12:23 DANO WEIR: Yeah.

12:25 DAREN BLONSKI, CFP®: He could therefore create his own currency, and he has, and he sent me some of it.

12:30 DANO WEIR: Wow. You need to bring that in for an episode.

12:32 DAREN BLONSKI, CFP®: That would be good, right?

12:33 DANO WEIR: Perfect for It's All Money.

12:34 DAREN BLONSKI, CFP®: Right, right.

12:35 DANO WEIR: Send him on an episode. That would be just crazy.

12:38 DAREN BLONSKI, CFP®: I have to show you it. I have to show you. It's amazing. But my point is, we could start doing business in that currency, right? But he's a micronation, and it could probably be swept off the map by a Fed, you know, whenever they felt like it, because he's not actually his own country.

12:53 DANO WEIR: And if they try to come and get him, he doesn't have the guns to back it up. Right, right.

12:56 DAREN BLONSKI, CFP®: Therefore, he literally doesn't have the guns to back the currency.

12:58 DANO WEIR: Right. Therefore, that currency—me as a consumer, I don't have a lot of faith in that. The dollar is probably not going anywhere. They've got the most guns. So that's basically what you're saying.

13:08 DAREN BLONSKI, CFP®: Yeah. I mean, we've got the biggest guns. And until that changes, which it could be changing, who knows? The dollar is going to be the reserve currency—Chair Powell said yesterday, the interview to Congress, that the dollar is going to be the reserve currency for a very long time. Whether that's right or not, I don't know. But the point is, there's yet to be anything to reasonably contest it.

13:28 DAREN BLONSKI, CFP®: The problem with what the Fed and what our government is doing is they are printing so many dollars so fast that eventually that breaks the camel's back. So then what? How do I store value? If you're constantly printing money, you're inflating away value. And eventually it inflates it all away. We don't know what that point is. Is it 37 trillion, 40 trillion, 50 trillion?

13:50 DANO WEIR: I don't know, 70 trillion?

13:50 DAREN BLONSKI, CFP®: But at some point that breaks, and we don't know when, right? So then you have to ask the question—well, where do I store value? The other issue that cryptocurrency solves is the ability to transact and move money. It's very difficult. Have you ever loaded up $10,000 and tried to move it to a different country? Try it sometime and watch how many times you get stopped.

Money Printing, Inflation, And Where To Store Value

14:11 DANO WEIR: By people asking lots of questions of what you're doing.

14:14 DAREN BLONSKI, CFP®: Right, and so cryptocurrency solves the ability, in a global world, for people to move and take value with them. What are you gonna do, take your gold bars? You're gonna stack up your dollars? How are you gonna take your value with you as you move? So cryptocurrency solves that, because you can literally just take your seed phrase, memorize it, and disappear, and you have all your money. But that's also what breeds the illicit nature of it.

14:38 DANO WEIR: Right.

14:39 DAREN BLONSKI, CFP®: And a lot of people say, well, Bitcoin does all that, has all these bad things that happen with it. Well, the dollar is a part of every single criminal enterprise I know of. So it's not a very good argument. But why is Bitcoin the first? Well, it has that first mover advantage, right? So the first mover—it's the biggest one that came out and people started to recognize it, right? Which leads into the network effect, right? So Bitcoin has a network effect. There's enough people that see it as valuable, then that translates into people having confidence in it.

15:16 DANO WEIR: Right. Bitcoin is also very simple, for a lot of the pushback where Bitcoin takes too much energy to mine, and that's not good for the environment—

15:24 DAREN BLONSKI, CFP®: And the energy also is part of what stabilizes the blockchain, but also gives it the security that it has, right? And then you could easily push back on that, say that, yeah, but it takes money to create anything in this world, or it takes energy to create anything in this world.

15:43 DAREN BLONSKI, CFP®: So, and then one of the other core pieces of Bitcoin is Bitcoin has a fixed supply. There's only ever going to be 21 million, about 94% of it's already been mined or pulled off chain or is in somebody's pocket, right?

Bitcoin's Fixed Supply: Only 21 Million, Ever

15:56 DANO WEIR: That means there's only 6% left, right?

15:56 DAREN BLONSKI, CFP®: Well, as that supply diminishes, what happens to the value? It goes up, because as demand goes up and supply diminishes, price goes up. And that's why Bitcoin today is sitting at 107,000 and change.

16:12 DANO WEIR: As we record this on June 25th.

16:12 DAREN BLONSKI, CFP®: That's right. 2025. And just a few days ago, it was 99,000. So there's still a lot of volatility to it. Over the last 10 years, the number one performing asset class by far, Bitcoin, right? So if I'm an investor and saying, oh, I'm not going to participate in that, well, that's fine. But you're saying I don't want to participate in the top performing asset class.

16:35 DANO WEIR: Okay, so the other cryptos don't have a fixed supply?

16:37 DAREN BLONSKI, CFP®: They don't. And that's the issue, right? Because so a gentleman by the name of—or a person, or a thing, or peoples, we don't really know—Satoshi Nakamoto is who created Bitcoin. He produced this white paper that basically outlined what Bitcoin is.

Satoshi Nakamoto: The Mystery Behind Bitcoin's Decentralization

16:52 DAREN BLONSKI, CFP®: Satoshi Nakamoto hung out for a little bit in the creation of Bitcoin and then disappeared off the face of the earth. Nobody knows who he is. There's people that say they're them, or there's people that say they know who it is. There's a lot of speculation. We still don't know. Some people say it's the CIA, the FBI. Nobody knows, right?

17:12 DANO WEIR: But that's all—when are we going to have a conspiracy podcast? So many times, so many times I was just thinking, like, conspiracy adjacent—look, I wrote this down, literally, I'm like, you know, it'd be so cool to have a podcast, it's just called The Rabbit Hole, and all we do is just take these weird rabbit holes and just go down on them, man. So anyway, we can't do that.

17:35 DAREN BLONSKI, CFP®: It'd be so good, it's so entertaining. The point is, is there's a fixed supply. So there's only over 21 million. And then there's this like mysterious character who created Bitcoin, right? Whereas all the other cryptos have more or less some type of centralized figure, person, organization that created it, right? So if you think about how big Bitcoin is becoming, and if that one person that created it had a million coins—

18:03 DANO WEIR: They're now so powerful as a person.

18:03 DAREN BLONSKI, CFP®: And I think if anything is going to have legitimate adoption, nobody wants to put all that power into one, two, three, or four people, right? They want that power to be dispersed. And that's where that network effect comes in as well. If Bitcoin didn't have Satoshi Nakamoto, who is this mysterious character associated with it, I don't think it'd be where it is today.

18:27 DANO WEIR: It gives it an intrigue, right? It's like, who is it? Nobody knows.

18:32 DAREN BLONSKI, CFP®: Is like, we just don't know, and that's part of the power of Bitcoin. It's kind of weird, but it makes sense psychologically, right? Because you take Ethereum, which is the second biggest crypto out there, and we know who the founders is—this goofy character who's running around and doing weird things—and, you know, the Ethereum Foundation, like the wealth of that cryptocurrency is all on this one person's like decisions. What's unique about Bitcoin, though, is you have all these centralized—or these decentralized nodes with it, that allow it. And the more Bitcoin you get, the more influence you have on the blockchain, but it's so decentralized at this point, in theory you could get a bunch of decentralized figures to come together and change things, but it's pretty difficult to do. But that's also the power of it—it would take so much energy, so much energy going at the blockchain at once to rewrite the thing, to mess with it.

19:33 DAREN BLONSKI, CFP®: And that's why it hasn't been hacked. People have hacked exchanges that held Bitcoin, but nobody's hacked the actual chain. You don't know who started it. It would take an insane amount of power to change it all at once, which would mute you or my holdings or change our holdings or anything like that. So there's a built-in security function to it. It has fixed supply. So the government—I think we talked about this on a previous episode, where I talked about how Chair Powell said, well, during COVID, they asked, well, how did you guys create more money in the system during COVID? He's like, we just went to the computer and added zeros.

20:07 DANO WEIR: That's all the government's doing. They just go in the computer, add zeros, and then drop it in your bank, my bank, and everyone else's bank.

20:12 DAREN BLONSKI, CFP®: Somebody somewhere has a button.

20:14 DANO WEIR: Somebody somewhere has a very powerful button. And that's the problem with the US dollar. They can print incessantly. And everyone goes, oh, well, Trump's going to stop it. And you had this, and I'll just take a victory lap on this. But you had Elon Musk going in there and, like, oh, I'm going to change the government, and I'm going to cut back in spending. And he's gone. He realized he can't do anything about it.

20:35 DAREN BLONSKI, CFP®: And that's why he probably quit, other than the fact his company was going down for all the haters. But the bottom line is that you can't stop spending. It doesn't matter if it's Democrats, Republicans, it'll change who spends on what and where—that will change, but the spending will continue. And we cannot get off that train in the United States. We are on an absolute runaway train, and at some point that train's going to go bloop and fall off. I don't know when it is. That's the argument for Bitcoin, and that's why it has become what it is.

21:07 DANO WEIR: So what you're talking about, though, with Ethereum and other cryptos in which there's one person, or a group of people, or a company, or a foundation—whatever, you have an entity which has power, right? And in some instances you have nefarious actors, people who do pump and dumps. And so I wanted to—oh, I have, I have—I'm going to try to go two for two here with my little demos.

21:30 DAREN BLONSKI, CFP®: Okay.

A Live Demonstration: What Is A Pump And Dump?

21:31 DANO WEIR: I have what I feel is a demonstration of a pump and dump. And I'm going to use coasters.

21:43 DAREN BLONSKI, CFP®: Coasters, Dan. Wow.

21:45 DANO WEIR: Use coasters. It's an old coaster. I'm going to use dollar bills. No cash on premises—this is just what I had in my pocket, they're singles. Relax, internet. Here we go. You've got $4.

22:02 DANO WEIR: These are my new coins that I just made, and I made them, and I'm in control of them. And I own one, okay? And I have these three, which are a dollar. And now I use all of my methods—my influencers and my network effect and everything that I can do—to try to influence people to want to buy these. Right? Because I think that they're valuable, and I want to make it so great, and it's going to be new and different, and this info you don't understand, and I'm this cool person, and don't you want to buy my coin now? And now, Daren, you're getting excited.

22:41 DANO WEIR: You want to buy these. They're a dollar each. You're a dollar each. Do you want to buy them? And then you go, okay, I want to be—I want to, I want a part of this. Here we go. One, two, three. Right. And now this is in the pot, right? And you've got your shares of coins, right? Crypto coins.

22:57 DAREN BLONSKI, CFP®: Yeah.

22:57 DANO WEIR: And now the price has gone up to $3. And then, you know what I do? I go—great.

23:04 DAREN BLONSKI, CFP®: Is that a pump and dump?

23:06 DANO WEIR: More or less, yeah. And that's what's happened.

23:08 DAREN BLONSKI, CFP®: And you're left holding coins.

23:10 DANO WEIR: You're left with coins that are now worthless.

23:12 DAREN BLONSKI, CFP®: Correct. But even worse—

23:13 DANO WEIR: Because I'm not doing any more of my network stuff to help make it still seem cool.

23:18 DAREN BLONSKI, CFP®: The only way I would kind of change that is instead of you putting one back to the system, you held a million. Right. And you just dumped a million onto the market, which then overnight just pushed that price down.

23:30 DANO WEIR: Right, right. Okay, okay, okay. So there's way more quantity than...

23:33 DAREN BLONSKI, CFP®: Way more, right? So if you have 10 million, but you only let a million out there and sell them, and they all go up to $3 a pop, but then you dump 9 million onto the market, you just obliterated that price overnight.

23:43 DANO WEIR: Right.

23:44 DAREN BLONSKI, CFP®: And that's more or less a pump and dump. That's what's happened with so many of these cryptos, where literally the people who created these cryptos go out to influencers and media stars and say, hey, I'll pay you to talk about it. And then they all dump them.

24:01 DANO WEIR: That's a problem, right?

24:01 DAREN BLONSKI, CFP®: Anytime, though, you see new technology come about, anytime you see massive technological change, go back in the history books—there's always schemes around change. There is always opportunistic people that come out in these moments. And so the temptation is to dismiss all of it because they're schemers and opportunistic people playing the game.

24:27 DANO WEIR: And to be fair...

24:27 DAREN BLONSKI, CFP®: That's a really logical, safe thing to do. You're a father, and you've got a job, and you've worked hard for this, and you're not going out there doing super risky things, you know, because you don't want to go back to your wife and say, oh, sorry, I lost it all on Dogecoin.

24:45 DANO WEIR: It seemed like a good idea, right? So it just seems people crave security and safety. And so there is a shutdown that goes on. But the whole point of this episode is that, especially based on the origins of the coin, it's seeming like that's kind of why Bitcoin's different.

25:02 DAREN BLONSKI, CFP®: Yeah, and you could argue there's been many marriages broken over Bitcoin.

25:07 DANO WEIR: You could argue the same. In the early years of Bitcoin, there were people literally—I would hear about it quite often—selling their homes and going to rent and putting all their money on Bitcoin. They look like rock stars now. But again, we go back to the grain of sand.

25:22 DAREN BLONSKI, CFP®: For just as many of those stories that were successful, I've got a whole bag of other stories of people who were unsuccessful. And we see it with stock picking all the time. It's no different, right? Everyone who bought NVIDIA and it went to the moon over the last three years is like, yeah, look at me, I'm a great stock picker. And then I've got plenty of clients who picked Disney that hasn't gone anywhere in 10 years, right?

25:45 DANO WEIR: Or some of the others. And is one smarter, or one just get lucky?

25:48 DAREN BLONSKI, CFP®: And I think that survivorship bias is live and real in the crypto space as well. And right now, I think Bitcoin's taking a victory lap on survivorship bias. Now, everyone can say, well, I knew, I knew because of this, because of that.

Survivorship Bias And The Myth Of The “Smart” Investor

26:04 DANO WEIR: You have no idea. Like, you don't have no idea.

26:07 DAREN BLONSKI, CFP®: Because literally, remember I told you about that guy named Satoshi Nakamoto? If he just showed up tomorrow, or she showed up tomorrow, or it showed up tomorrow, and dumped all their coins onto the market, the price of Bitcoin would get absolutely obliterated.

26:20 DANO WEIR: Right, in half.

26:22 DAREN BLONSKI, CFP®: More than that, for sure. And it would just—obliterate the whole narrative.

26:25 DANO WEIR: Yeah, so where's your little argument about how brilliant you were that you knew?

26:29 DAREN BLONSKI, CFP®: Right, exactly.

26:30 DANO WEIR: You only knew based on these set of circumstances that happened to have this outcome.

26:36 DAREN BLONSKI, CFP®: That's right. So, okay, so therefore it's only Bitcoin, and that's the only thing that matters, or are there a few others, and are there pros and cons to some of the others? Because we mentioned Bitcoin itself is a diversifying asset. Are there pros and cons? Is there some diversification to be had with other coins?

26:50 DANO WEIR: Like we've mentioned Ethereum a couple times, so what are the pros and cons of Ethereum?

26:56 DAREN BLONSKI, CFP®: Well, so like the purists will say absolutely not, there isn't anything else out there—Ethereum, there was a lot of questionable activity done around Ethereum and regulators in the past eight years who have tried to favor it, like literally like SEC type people ending up working for organizations that support Ethereum, you know, so there was this whole kind of negotiation happening under the scene. And then you had FTX that went bankrupt. It was just funneling money into politicians' pockets. That, I go back to—the beauty of Bitcoin is you have Satoshi Nakamoto and nobody knows what, if, or where that thing is that created Bitcoin. Whereas Ethereum, we know who the person was. We know who the founders were. There's whole books written on the story and et cetera. And a couple of people made—a lot of people made a lot of money in Ethereum, and, you know, life-changing wealth. But at the end of the day, there's still the big Ethereum Foundation, there's still ways to impact, to influence it, and that becomes problematic. I'm not going to get into the episode on all the details of the ETH, because I think we'd put everyone to sleep, and there's lots of resources out there. But that's the case with Ethereum, that's also the case with XRP, right? So Ripple Labs, XRP is... When it really spiked way up in a graph back, you saw all of a sudden XRP went way up, and then Ripple Labs then sold a whole bunch of it, because they had a bunch of XRP, and that's an issue, right? When you flood a bunch into the market, but there's no fixed supply, right? If there's no fixed supply—

28:36 DANO WEIR: Then—is there Ethereum, no fixed supply?

28:39 DAREN BLONSKI, CFP®: No, there's some debate about how—the chain should function now. And again, if I go into it, it's a whole other episode, but I can't really answer that question fully without doing a whole episode. Bottom line, they're trying to curtail supply of Ethereum. But there is no true curtailment of Ethereum. Same with XRP, same with Doge. All the other big ones out there.

Ethereum, XRP, And Doge: Comparing Bitcoin To The Competition

29:02 DANO WEIR: Well, let's talk about Doge.

29:03 DAREN BLONSKI, CFP®: Doge is pretty cool.

29:05 DANO WEIR: There's two things happening here. Because Doge is not the Department Of Government Efficiency.

29:12 DAREN BLONSKI, CFP®: Is not.

29:13 DANO WEIR: Okay, so before that was, that department is named sort of as a joke after Elon Musk likes this particular coin, which has a very cute dog as its mascot, which in and of itself was made as a joke, right?

29:27 DAREN BLONSKI, CFP®: Correct. And then it's—this Doge is an indicator of...

29:32 DANO WEIR: A particular class of coins which are called—well, they're not called joke coins, they call them shitcoins. You can figure out what that really means. Yeah, and there's some that are a little not safe for work.

29:45 DAREN BLONSKI, CFP®: Yeah, so yeah, but that—there's a perfect example of it, it is kind of the wild west when you start getting into—there, you know, there's named all kinds of things. So something like Dogecoin, was it bought just like as a joke at a party, or are there Doge fundamentalists, are there people who really believe in the Dogecoin, is that—you know, what is the vibe around the network effect, right? Like, if enough people think anything's worth something, it becomes worth something.

30:16 DANO WEIR: And the fact that Elon Musk used all his star power to back Doge, to talk about Doge, and then just happened to create the Department Of Government Efficiency, and that was the whole play, right?

30:26 DAREN BLONSKI, CFP®: So, but what's happening is this whole network effect. As more people look at crypto with credibility, which we saw today, you can see with the Secretary of Housing, FHA—

30:45 DANO WEIR: FHA.

30:47 DAREN BLONSKI, CFP®: The Federal Housing Finance Agency. Come on, everybody knows that one.

30:51 DANO WEIR: They came out basically and said, hey, moving forward, cryptos need to be looked at as a means of assessing whether or not there's affordability for this home. And that opens up a whole new ballgame for people who have bought cryptos and have assets in cryptos that are locked in cryptos that can't sell it because they have a small basis, etc.

31:14 DAREN BLONSKI, CFP®: So that's telling you institutions are now adopting crypto as a viable form of value creation and asset. We saw that yesterday with Chair Powell, who testified before Congress and said that banks are free to transact with cryptos and to create crypto solutions. You're going to see every major bank, every major institution offering some degree of trading. I know Schwab, for example, we do a lot of work with, they're about to start offering crypto trading on the Schwab platform, and because they're getting their lunch eaten by groups like Robinhood. So you're going to see that change, and as society accepts this as a true form of value more and more, you'll see that shift and change.

Institutions Adopting Crypto: What It Means For Mortgages

31:54 DANO WEIR: And so what this means from the mortgage perspective, if you're trying to conceptualize what we're talking about—so I'm applying for a mortgage. I've got my cash in the bank. I've got my brokerage account. I've got my job and my income, which you look at.

32:12 DAREN BLONSKI, CFP®: And these are all things that you're using, factors that you're looking at to determine whether or not you're going to give me a mortgage. I've also got this account with $200,000—not real, $200,000—of Bitcoin. So previously, if I wanted that to be considered to assist in my acquiring of a mortgage, I would have had to convert that into dollars, and then you could have looked at it.

32:33 DANO WEIR: But what this is saying is you don't need to do the conversion.

32:36 DAREN BLONSKI, CFP®: You can look at it as its own asset, because when you sell it, you're having all—you have a tax hit, you have all kinds of stuff that happens. So this change is saying now it's on the table with every other normal asset.

32:47 DANO WEIR: That's right. Which is huge, right? It's institutions accepting it into—

32:52 DAREN BLONSKI, CFP®: The mainstream financial system, before it's been this kind of tertiary thing out here, and now it's being brought in. And that will change a lot of things with crypto, and different solutions will be created about, around it. And once enough institutions start adopting, and once enough organizations, government agencies, start taking into account as a real asset, then it becomes a real asset, right?

33:13 DAREN BLONSKI, CFP®: Because let's just go back to—way back, there was a point in history in that episode you did with Chris, where you guys talked about tulips. At one point in this world, tulips were a form of value.

Tulips, DVDs, And Embracing What Comes Next

33:25 DANO WEIR: And anything can be. And now, in a digital world, in a digital environment, in a world that's going to be driven by AI, like it or not, it makes sense that we would transact digitally.

33:39 DANO WEIR: And you know what I'm thinking of, for whatever reason, right now as we wrap up the episode? I'm thinking about DVDs. Because there was a time—15, 20 year period—in the entire world where, all of a sudden, if you wanted to watch a movie, they were just DVDs everywhere. And there were DVD players. And there were—that was how you consumed movies at home was a DVD. And then it became a little bit better.

34:05 DAREN BLONSKI, CFP®: It's a Blu-ray DVD, right? And it's all—this is, this is the future. VHS is done, man, we're done. The LaserDisc didn't happen, but now we're here, DVDs. And now... there are no DVDs. So, like, that was a period where you had a change happen. It took over, and then they moved on to the next thing.

34:25 DANO WEIR: So I only say that to say, if there—when things are changing, right? And when something seems to be kind of taking over, there is a major, like, freak-out in your brain. If you're like, like, ah, this is different, like, oh my God, I'm going to have to deal with this for like the rest of my life. And then sometimes it's just over and you don't know why, and there's no rhyme or reason to it, and it's moving on to the next thing. So just, if you're freaking out about crypto, if you're feeling like you don't know what the world is anymore, just know there's going to be something. You're going to wish for the days of crypto, because now we're all paying for stuff with our contact lens or whatever it is.

35:04 DAREN BLONSKI, CFP®: Common.

35:05 DANO WEIR: That's right. So, as I said, today's episode is educational. Trying to give you some of the realities of what's happening in finance, what's happening in the markets, and what's happening in asset classes that now can no longer be ignored. We are Sonoma Wealth Advisors, and we are always looking for the right clients.

35:26 DANO WEIR: We thank our clients who are watching right now. And if you want to learn more about us, SonomaWealth.com, you can take our free wealth analysis. And wherever you're watching, make sure you subscribe. We really appreciate that support. It really helps the show. We'll see you next episode.

35:39 DANO WEIR: Thanks for watching and listening to It's All Money. We hope today's episode shared information to increase your financial confidence. Now is the time in the show for the voiceover with a bunch of words at the end. Listen close, though. You might find out something you didn't know. It's All Money is powered by Sonoma Wealth Advisors. Sonoma Wealth Advisors helps individuals and families in Northern California and across the country with building, managing, and sustaining wealth. Sonoma Wealth is a comprehensive holistic finance solution, offering financial planning, asset management, tax planning, 401k solutions, and appropriate insurance. Take our free wealth analysis now at www.sonomawealth.com. If you haven't already, like and subscribe to It's All Money on YouTube, Spotify, and Apple Podcasts. It's All Money features human hosts, musicians, editors, video crew, and voiceover talent. Video production by Forz Media in Rohnert Park, California. Online at forzmedia.com. Music by Neon Beach, Sparkle Rising on Soundstripe. Voice over by me, Dano. Thank you for listening to the very end. We appreciate diligent viewers and listeners. Fermata Advisors LLC is registered as an investment advisor with the SEC and only transacts business in states where it is properly registered or is excluded or exempted from registration requirements. This content was produced by Fermata Advisors, LLC, DBA Sonoma Wealth Advisors, DBA Fermata 401K, DBA Fermata Tax. The opinions expressed by Fermata Advisors, LLC on this show are their own. Information presented on this program is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. Discussions and answers to questions do not involve the rendering of personalized investment advice, but are limited to the dissemination of general information. A professional advisor should be consulted before implementing any of the options presented. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Information presented does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Viewers and listeners are encouraged to seek advice from a qualified tax, legal, or investment advisor to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance.