Brian Estes: The Beauty of the Blockchain

Today, Commander Divine speaks with Brian Estes, CEO & CIO at Off the Chain Capital. Off the Chain is a cryptocurrency fund that finds value opportunities across the industry.

In this episode, Brian discusses myths and truths about cryptocurrency, how it really works, and the future of blockchain technology.

Key Takeaways:

Our money experiment is no longer working. The dollar is going down, so it looks like commodities are going up in price. But in reality, what's happening is the dollar is losing all its value. For the last 51 years, the world's been an experiment. We’ve been experimenting with money that's only backed by the full faith and credit of the government that issues that money out. And that experiment is failing.

Something has to give. Bitcoin is not as difficult to buy as you might think. While Coinbase is ubiquitous, it’s also really hard to use. Brian recommends buying Bitcoin on PayPal, Venmo, Square Cash App, or Robin Hood. Or, if you have a Fidelity or Schwab brokerage account, you can invest in the private Grayscale Bitcoin Trust or the Osprey Bitcoin Trust. Bitcoin can’t be outlawed.

Congress decided not to outlaw Bitcoin for two reasons: 1. It would drive innovation outside the US; and 2. Back in 1996, the Supreme Court had already decided that cryptographic computer code is language and is protected by the First Amendment as speech. Therefore, you can't outlaw Bitcoin in the United States; it's technically protected speech. The Internet wasn’t supposed to be built this way. When we built the internet 30 years ago, there was a piece of software that was missing.

The internet was built on top of the banking and credit card systems. The only reason it was built on these systems is because no one could figure out how to create software to allow us to do peer to peer transfer. And that's all Bitcoin and the blockchain is. It's that solution that we were looking for for 30 years. And someone figured it out and gave it to the world for free. Over the next 10 to 20 years, our internet will be a blockchain based internet. Since Bitcoin’s invention, we've been rebuilding the entire Internet. We're taking it off the banking system and putting it on blockchain technology. It's going to be very disruptive.

The banks, credit card companies, and traditional finance people don't like it, but it's going to happen. Bitcoin, blockchain, and decentralized finance will replace the current financial system. It’s not going to happen overnight, but over the next 10 to 20 years, our internet will be blockchain based. You can’t put the toothpaste back in the tube. The government has been waging a massive misinformation campaign over the last 14 years. T

hey’ve branded Bitcoin as something nefarious. They’ve said it’s bad for the environment, which is totally false. And then they've taxed it as property. Therefore, you can't use it as currency, which has slowed down the adoption. But you can't stop it. It's almost like religion. Once the thought is out there, you can't unlearn it. What will one Bitcoin be worth in the future? We're in a period of price discovery. We're trying to figure out what this asset is worth, and we have models that help us predict that.

These models are between 91 and 99% correlated to the historical price of Bitcoin. And according to those models, Bitcoin should be worth somewhere between $10 million to $18 million per Bitcoin by 2029. Is Bitcoin really destroying the environment? If you look at how much electricity is generated in the world, Bitcoin consumes 0.1% of the world's electricity. That's about what we use for Christmas lights or electric dryers in the United States. So even if you turn it off, you gain 0.1%. Of that 0.1% of electricity, 56% of it comes from renewable energy sources. So crypto is actually the greenest industry in the world. There's no other industry in the world that...

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