JeffersonLive from BTC Manager World Headquarters. This is, ”Around The Block” with Jefferson. Hey, so I’m here with Bobby Lee, the CEO of Ballet Crypto. And last we talk. Bitcoin was nowhere near where it is now at $40,000. So Bobby, hello, how are you doing?
BobbyHi, Jefferson. I’m doing well. Thanks for having me again on your podcast, very excited to be here.
JeffersonYes, thanks for being back on my show. I mean, it’s been just an amazing, amazing year, hasn’t it. Tell me a little bit more about you know, why you think Bitcoin is now at $40,000 and everything that’s going on in your world?
BobbyYes. So, we had 2021 come to a close and it happened pretty quickly. I can tell some people I was disappointed that Bitcoin didn’t have its full rally at the end of 2021. But the silver lining is that means the bull market is not over. So we still have a way to go this year in 2022. I am still very bullish. I think the two rallies we saw taking Bitcoin from $30,000 to $40,000 to $50,000, was April May timeframe, and then once again to almost $70,000 in September October time frame I think it bodes well for bitcoin and cryptocurrency in the last few months we’ve seen a huge surge in interest in a related field of NFTs so I think the crypto is here to stay for sure. And Bitcoin is the bellwether it’s the leader of course of all the crypto so I’m very, very bullish on Bitcoin and cryptocurrency in general.
JeffersonYes, that’s incredible light. I’ve been seeing the same it seems like there’s widespread adoption, whole countries are now enabling Bitcoin. I think El Salvador, several other countries are close behind. So what do you think just if you had a crystal ball, what do you think the major news is going to be for the upcoming year?
BobbySo we’re going to see more adoption. I think Bitcoin has seen huge adoption over the last 13 years. In fact, Bitcoin just turned 13-years-old, a few weeks ago, in early January. And finally, we can say Bitcoin is a teenager for many years prior to this year, I was telling people bitcoin is still young, it’s still barely a child, hasn’t even grown up hasn’t even become a teenager yet. So this is the first teenage year for Bitcoin. And I expect great things. We’ve already had three block reward halvings and the next one’s coming in barely two years. So, I think a lot is ahead of it. Obviously, the biggest news over the last 12 months we’ve seen that Bitcoin Futures ETF get launched in Canada, we’ve seen Bitcoin being legalized as legal tender in El Salvador. We have we seen a lot of corporate fortune 500 companies buying Bitcoin holding it on its balance sheet, leading with MicroStrategy, and a year ago with Tesla so I think that trends going to continue as well. We’ll see and hear bigger and bigger names in the corporate field who may want to take on Bitcoin as a hedge against inflation on their balance sheet. And of course, this falls in the footsteps of seeing hedge funds and family offices diversifying investing in Bitcoin. So, I think the use cases of Bitcoin are really numerous. I mean, whether it’s using it to buy things whether it’s using it as a hedge against inflation, whether just holding it as an alternative asset class, I think there are so many use cases for Bitcoin as cryptocurrency.
JeffersonAnd I think there’s more coming. I mean, I have here in my hand 10,000 Satoshi Pure Bitcoin cards by ballet crypto. Tell me more about this card, what can I do with this card?
BobbyYes, it’s a gift card. It’s a low denomination physical Bitcoin, if you remember, some 10 years ago, a gentleman by the name of Michael Caldwell, invented something called a Cassius coin. Cassius coins were the world’s first physical Bitcoin. These were brass token coins, physical coins round, and had a Bitcoin account private key printed on the backside of a hologram sticker and tamper-evident, and he was giving them out and selling them. At that time, Bitcoin was under $1. Sometimes I eventually went past $10, $100. But the point is that just like how Mike Caldwell turned Cassius turned cryptocurrency and Bitcoin into physical form. That’s, what Ballet has been doing for the last few years. And just last fall, we announced and released, these physical gift cards made a plastic size of a credit card, similar to the gift cards that you see on the aisles of your supermarket or grocery convenience store. And instead of selling or preloaded with service value from different vendors and restaurants, what we have on these cards is actual Bitcoin. So, what you have there is 10,000, Satoshis, 10,000 cents, it’s equivalent of 0.0001 BTC. Some people call it 100 bits. So it has about, $4 $5 with a value, it’s a small amount now, 1,000th of a Bitcoin. But, give it a few years, maybe go up 10 times or even 100 times.
JeffersonI really do think we’re heading to a minimum of one penny for Satoshi, which remain-this is basically a $100 gift card already.
BobbyThat’s right. [overlap] It’s going to be $100. That’s right. The best part, Jefferson is that what you have here, there is actually a bearer asset, just like people know that Bitcoin is a digital bearer asset. Well, you have there in your hand is a physical bearer asset. So the person who holds on to that card, which is loaded with 0.0001 BTC denomination that’s printed on the card, that owner has control of those Bitcoin funds, and they can just, it’s an open standard, we use VIP 38. And whoever has that card, can on the back of the card, peel off the sticker scratch off for the passphrase and then use it to redeem and move those BTC units, or Satoshis rather, at a $10,000 move to any address in the Bitcoin ecosystem, whether it’s an exchange, whether it’s another wallet, used to pay for something, everything is possible.
JeffersonSo there is spendable right, so you could then conceivably I mean, let’s say you move it on to strike or something, you could then spend it anywhere, right.
BobbyThat’s right, you can move you could spend anywhere. And because Bitcoins are universally valued and especially in El Salvador, companies and businesses there because Bitcoin is legal tender they’re compelled to accept Bitcoin which is amazing, right. I think of Starbucks and McDonald’s whether it’s a Mom-and-Pop convenience store or the people selling department store they were all compelled to accept Bitcoin so that’s what’s amazing about Bitcoin in the last year.
JeffersonAnd there’s something like, “Block” that did [inaudible] of PayPal, Visa, network MasterCard, all these major institutions are adopting crypto. Do you see more institutions is adopting crypto this upcoming year?
BobbyI expect more and more will obviously it’s hard to predict which one will be the next one. But the trend is that people want diversification of assets. I think what we’ve seen over the last decade since the world financial crisis, is that our monetary policy with constantly quantitative easing with the printing of more and more money, it’s gone into a circle, a vicious cycle, when the only way to get out of it is to print more money, which makes the problem worse, right. It makes the national debt higher and makes the interest rates suppressed, yet there’s so much money around, it’s causing inflation yet they can’t raise the rates because it would cause a very severe downturn and potentially harm the global economy. If they tried to raise rates, it would slow down the economy and really put a stop to the growth yet if they don’t raise rates you’re going to see inflation out of control so it’s really a lose-lose situation. That’s why I’m there I personally am very happy that I’m well-diversified in holding the holding cryptocurrency, right. So there’s going to be a flight to quality a flight to hard capital. And bitcoin is what I consider to be the hardest of all hard assets.
JeffersonI would really agree with you there. The inflation rate of Bitcoin right now is extremely low compared to the world. So, I think that Bitcoin, as I say, is here to stay as a way to hedge against inflation. I even talk to my cousin, she was shocked. It was like $4 for just one avocado. And it was ridiculous.
BobbyIt is the what is the world come to, right?
JeffersonAnd going up even more, and that’s just here. I can’t imagine, food and other countries also going up. And yet her pain raised, she worked at a hospital, her pay rate doesn’t even cover the increase of the medical costs the medical bill. So, she doesn’t know what she could do this year. And that’s, I think, where a lot of people are at, but that said, I think there’s a world of opportunity within cryptocurrency. I read it somewhere on maybe Reddit or something. They said vote now fiat it masters you. Right. But with Bitcoin, you master energy. So, I think it’s a world of difference. So looking at this NF T. I think we barely have scratched the surface with NFTs, you do support NFTs with your NFT series gift cards, right?
BobbyYes, we at Ballet, we’re very happy to embrace NFTs I think today, and it has barely just taken off. I think it’s a huge potential. There are two aspects to NFTs, whether you treat it as a collectible or that it’s as an investment. But regardless, what’s most important today, in my opinion, is people are paying large amounts of money for NFT somewhere in the multi 1000s of dollars, or even hundreds of 1000s of dollars. There are a few cases where NFTs have been sold for over a billion dollars. And what people don’t realize is I would say the vast vast majority of NFTs today are still stored in what we call hot wallets. These are wallets such as meta mask and other software programs either run on your desktop PC in a web browser plugin or run as an app on your phone where the private keys are stored in the contents of the phone’s memory or on a hard disk drive. And because these devices are always connected to the internet, these are considered hot devices, which can be exploited and can be hacked into remotely by attackers, and other for example piece of malware gets installed, right. So, the cryptocurrency industry has learned about this over the last decade. And most cryptocurrencies today, the vast majority of the value is stored offline in cold wallets. So, these would be devices either hardware devices, or other non-electronic devices that don’t leave the private keys in an always-connected fashion. So this is something that the cryptocurrency industry has learned, you know, pay dearly for it over the last 10 years and learned the hard way. And what I worry is that the NFT industry is still burgeoning. It’s still new. We have a lot of lot of new players coming into the NFT ecosystem buying NFTs on platforms such as OpenSea. We have Coinbase, NFT with Binance, a lot of the major exchanges are launching and running NFTs. But, still, the main consequences that the mass amount of entities value out there are still either stored on custodial platforms or worse on hot, on hot wallets. And Ballet because we have this amazing solution. I’m here to share with everyone we’re proudly announced that Ballet’s series, the real series of cold wallets can and will store an NFT safely. So, if you ever buy an NFT, your image is always online as a URL or the IPFS link. But the actual private keys, you want to store that safely, right. You don’t want to have that carry that with you on your computer on your mobile phone. So do yourself a favor put it on a cold storage wallet, regardless of whether or not you choose Ballet. But do yourself a favor, protect it.
JeffersonYes, sound advice. Even recently, I think I’ve read somebody who’s in a key was stolen from their Metamask. And yes, it’s a shame. But that’s the thing Metamask is extremely hackable versus these hardware wallets such as yours. And I review yours really, and that hardware classification, because without that card, there’s no way that you can access whatever is on that card, whether it be bitcoins or NFTs.
BobbyThat’s right. That’s the beauty of cold storage.
JeffersonCold storage, which is great. So, so along with that, I mean, I noticed you have a lot of open-source tools with your system. Can you tell me more about that?
BobbyYes, so we at Bellet this month, we’re actually celebrating our three-year anniversary, I started a company three years ago in January of 2019. And one of the requirements when I started this company, as some people may know or many people may know I’m a second-time entrepreneur in the cryptocurrency ecosystem. I first founded BTC China, the very first exchange based in China. It was later rebranded to BTCC, and I got acquired in 2018. So, after I sold that off, I made some money for myself and all my investors very happy with that exit. So, I could have retired, but I chose to start a new company to really address the issue of safe and easy cold storage for everyday people, which is what Ballet ended up doing. And one of the key requirements for me in starting this company is to really come up with a compelling solution that is easy, safe, and more importantly, it’s responsible, it really gives our customers the full private key for their cryptocurrency storage, and now also for NFTs. So, we actually did not create an arbitrary private standard that was subjected to security risks and subjected to the propriety nature of proprietary standards, right. So we will want to do was to adopt and use an open standard that was well tested in the market. That way, even if Ballet did not have the legs to continue. If one day were to shut down or close, we wouldn’t still call mistreat our customers and cause them to lose access to the cryptocurrencies. So, we adopted the standard called BIP 38. It’s a Bitcoin standard from the last decade. It’s been around for 8-10 years. And it’s very well vetted. It’s an actual Bitcoin standard that was adopted, I think around the 2011 to 2012 2013 timeframe. It was actually created by Mike Caldwell, the inventor, creator of the Cassius coin that I mentioned earlier. So because the BIP 30 is an open standard, all Ballet wallets use that standard. So that means you can decode and extract cryptocurrency private keys from Ballet wallets, even without using one piece of ballet software, right. It’s an open standard. In fact, we published our code, BIP 30 implementation on our own open-source websites called balletcrypto.org and we’ve even posted the code onto GitHub so that people can download it inspected it, look for bugs, and most importantly, whatever happens to ballet as we become more successful, or even one day we close shopping and go bankrupt. People always have access to their cryptocurrencies, private keys through that open source software and open standard copy BIP 38. Does that help?
JeffersonYes, that’s fantastic. And you know, I’m really impressed with the knowledge that you have shown and demonstrated here with the technology and everything behind it, just to make sure that everything is super secure. So, that’s amazing. So along those lines, security, reliability, so forth. I would argue that Bitcoin and Ethereum and all of those are far more secure than anything you can get into a bank, right?
BobbyThat’s right, that’s right. One thing I want to share with people is in terms of the two-factor private keys from BIP 30 and how secure it is. So just to get a little bit nerdy, with some of the audience members here, and if you want to get really technical, I can share an insight. So the private keys created by BIP 38 are actually two factors. So, instead of a private key using a single random number generator to create a single private key, the ones created under our system of BIP 38 uses two factors of random number generator, so we get to entropy sources. And the two entry sources combined, that’s what gets used to create a private key. So there’s extra redundancy there. And in fact, each Ballet wallet gives you the two components A and B. In fact, even if we expose to one of the two components, it will be mathematically impossible for you to brute force and guess the second component. So I put up a challenge a year and a half ago in the summer of 2020 to see if people want to try to hack the Bellet wallets, right? If I give you the first piece of the private key material, can you guess the second component to try to create and resolve the private key and vice versa. What if it gives you the second part, can you come up with the first part to create and resolve the private key? So, I put two Bitcoins, one bitcoin on each card. And in each card, I give you one piece of it. And it’s posted on a website called takebobbysbitcoin.com. And today it’s over $80,000 in value as a bounty out there, and no one’s been able to hack it for the last one and a half years?
JeffersonIncredible. I see it here. takebobbysbitcoin.com. Can you guess it? I would argue I don’t think anybody could believe me. I’m well versed in BIP 38. I don’t think that’s possible.
JeffersonSo along with that. So, I think there’s a what do you have here-the ability to on your website, if you wanted to create a business card or contact card, there’s a way that people can do that. How does that work?
BobbyAre you talking about the new crypto business cards?
JeffersonYes, those. Yes, this is something very special. We just announced this a month ago. So, here’s the deal. So, in the world we live in today, not barely anyone gives out business cards, right. Business cards are something back in the 90s and early 2000s. People use people don’t give business cards anymore. But we’ve sort of taken taking that concept and we revitalize it by giving people a new incentive to give out and receive business cards. So, what we’ve created is a world first, it’s the world’s first business card that can have actual cryptocurrency loaded in it. Think about that. So, now if you are a business leader, and you want to share your contact information with your prospective clients, customers, and friends, you can order these crypto business cards from Bellet. You can customize it with whatever information you want your contact information, social media information, email address, phone number, your company name, logo, and all that on the one side, and the other side has a proprietary Ballet technology to host your cryptocurrency of choice and you can have the denomination whatever you want. You can choose from over 100 different types of cryptocurrency that the Ballet ecosystem supports. If you truly want you can even load your own NFTs onto these business cards. Okay, so these are crypto business cards, and they sell starting at 50 units and the price goes to as low as I think $5 for business cards. So it’s very affordable, it’s fully customized. And now whoever receives your business card will have a reason to keep it right. So this is unlike a traditional paper business card this made a plastic it’s much like a credit card. It has a premium feel to it. And most importantly, it will be loaded with the cryptocurrency of the choice of the business partner that’s ordering these cards. So, obviously a ballet we sell these cards empty to you. And then we just provide the technology and then once you receive it you can quickly load them all with the cryptocurrency that you’ve designated, and then you can give them out. In fact, my brother, Charlie, he’s the creator of Litecoin. He ordered a bunch of these Litecoin business cards. And he was in El Salvador recently meeting with business partners there. And it was a huge hit. He was telling me that he was giving these out. And people really enjoyed receiving actual Litecoin, from the creator of Litecoin, from Charlie Lee. And I, of course, I’m a big fan of Bitcoin. So I have these business cards has my name on it as Ballet as Founder and CEO, and I give out Bitcoin, I give out 10,000 Satoshis on each of my crypto business cards. So to each his own right, Elon Musk can order these business cards, if you want to put Dogecoin on it. And so be it right, anyone in the world can come to our website, balletcrypto.com, click on the crypto business cards and order it and we’ll deliver it to printing practically anywhere in the world. Jefferson: Awesome. So that’s why I think in the last year, you’ve been incredibly busy and innovating in all these different areas. And so that kind of leads to the next thing with Ethereum about to do their big merge with, Solana during their innovations, even Polygon Networks with DKS. Maybe I mean, people are talking about it, maybe maybe not right. What do you think the next big innovation in the crypto space I mean, if you had to guess what do you think would be the next big thing?
BobbyThere’s so much new technology going on in the crypto in the blockchain space I can barely keep up with everything. So at Ballet, my full attention is on Ballet trying to build this company make it successful by providing the solutions to help regular people onboard cryptocurrency allowing you to save and invest in cryptocurrency and safely hold it right hotel it so to speak. So we are agnostic in terms of which technologies which box chains to choose from, we’re also embracing NFTs. I think there’s just so much going on, I think cryptocurrency is here to state right. The whole concept of money of assets being centralized controlled by a central bank being dictated by a central organization in terms of the value and the quantity that is so 20th century, right. That’s so old school, maybe you even say so 19th century, right.
BobbyBut the reality is, as a society as a race, humans have gone through 1000s of years of civilization, right. The modern history, the written history, 1000s of years of human civilization, and the modern era. And we’ve come a long way, right. In the very early days. It was, it was bartering, right. And after that, where there are bones and other small things. Right. And then eventually migrated to metal-based coins. And then we migrated to gold and silver. And then of course, when and then we came to the modern banking system, what they call debt-based money, right. Where money is substitute is a receivable for actual physical gold, but then that got cut off in 1971. So, last year marked the 50th anniversary of the gold standard, going off the gold standard, right, we left the gold standard 50 years ago, last August. So this is the modern money, the so-called fiat money that we despise, it has only been a small, small fraction of human history, it’s only been 50 years, out of 1000s of years. So, is this experiment going to succeed? Now, that we have bitcoin and cryptocurrency I’m sure it’s not, I’m sure that the fiat money that we know, I was wanting to, I think it’s not gonna hold water much longer, right. It’s already been 50 years and we’re seeing it crack. We’re seeing the cracks of it. You know, with inflation reports this year, it’s scary. But we saw if you ask us the early pioneers in the cryptocurrency industry, did we forecast this rise in interest rates. Yes, we all saw coming. We saw coming many years ago, we just didn’t know exactly which month which year it’s going to start. So we don’t exactly which country’s going to go down first, right. Which currency is going to go down first, will the US dollar eventually fail, will the Euro eventually fail? That’s up in the air. But even if it doesn’t fail, I don’t think the value will hold very well in the next decade.
JeffersonI agree with you but I started to feel that value. But I’d also be looking at innovations. I think we’ve been the Arctic as a human race artificially held back by the whole concept of fiat currency. It’s almost like a mechanical thing. If we can use cryptocurrency to express energy in a better way. I think that will lead to the next big wave just like the Internet has revolutionized communications, I think the depth of your currency and the rise of cryptocurrency will lead to a whole nother wave of human innovation. So yes, I really strongly believe that. And so with that, I think people looking at only the price of Bitcoin and nothing else, right? It really kind of misses the point, right.
BobbyYes. Let me express quickly about the energy thing, I think you make a very good point, I think what we saw is with the invention of cryptocurrency, now people can turn energy and capture it. So traditionally, you think about it. How is energy captured energy is captured by battery devices to think of either chemical salts or solid-state batteries that capture energy or flywheels to capture energy in a rotating fashion. How do you harness energy for later use? So it’s always been mechanical, or chemical solutions, like batteries to capture the energy? Now, with cryptocurrency, what’s interesting is now you’re turning energy through the use of this mining equipment, you’re turning excess energy into a form of currency, which can then its capital, right, which can then be redeployed and used at a future date. So, that’s the essence of mining. That’s why you have a lot of countries, a lot of governments, you’re seeing excess energy and they’re leveraging it to mine the cryptocurrency from the energy. And you see some countries like Iran and North Korea do it as well. So not just smart entrepreneurs in Texas, or in the United States or in China mining Bitcoin with their energy, but also at the state level, right. So this is something very important. All the miners in China that that’s how they got started, right. There was a huge supply of excess energy, electricity at these hydro plants near the river systems, and stuff like that, that was not connected to the main grid. So that was a way to harness that energy and turn into something useful into capital. And that’s what’s happened. Anyways, back to you, Jefferson. You’re asking the next topic?
JeffersonYes. This is fantastic stuff. And I’m just amazed that, as I said, with the depth and breadth of your knowledge, you really have kept up with everything that’s been going on with our industry, with the cryptocurrency industry, and with the developments, Bitcoin and Etherium and all these other ones. I mean, there are a lot of great projects out there, and more coming. So, that’s why I say I’d love to reconnect with you in a year again, just to see where your average things are going. So with that, do you have any final thoughts?
BobbySo, I would say, as you pointed out earlier, too many people are too concerned about the price for bitcoin and cryptocurrency, I think there is a risk of excessive sort of greed in the system. I’m an early investor in bitcoin and cryptocurrency and people coming on today. I don’t think anyone’s late per se. But what I would urge is urge a restraint, right. First of all, cryptocurrency as we know from its 13-year history, it’s very volatile. The prices go up a lot, they crash down a lot very fast, much more volatile than any traditional investment asset class. So, for whoever wants to come in and buy Bitcoin and cryptocurrencies or even other altcoins, make sure you’re only using money that you can afford to lose, right? That’s classic, classic advice. I’m not an investment advisor. This is not financial advice, but I still urge caution people all too often to get into it above their heads. And don’t use leverage. I think leverage is something that’s very dangerous. It’s for professionals. Certainly not for your average new investor coming in. So, don’t be greedy. The bottom line is, there’s no free lunch. Don’t be greedy. Invest in technology, learn about it. I published a book last year called, “The Promise of Bitcoin”. For people who are curious about why Bitcoin is the future of money, and they want to find out how it can work for you, then you can buy it on amazon.com, you could get the Kindle version, the ebook version. By the way, I’m going to soon be recording the audiobook version. I’m looking forward to that I’m making it. My publisher wants me to record it, to read the book myself, and so that people can enjoy the book in audiobook format. So hopefully it will be out maybe by summertime. I’m excited about that. And then of course NFT, same thing. I know people who are very excited about NFTs, I’m excited about NFTs but at the same time, don’t go overboard. I know people who bought a lot purely for speculative purposes. And I think that’s dangerous. I think that might be too much, right. Buy the NFTs you like, because you like it, not because you think you could flip them and sell them for a higher price.
JeffersonExcellent and very sound advice. And I really thank you for joining us on the show. And I look forward to this upcoming year. I really think that Bitcoin, at least relative to fee it, will continue to grow.
JeffersonAnd I’m excited about that. So thanks again. Thanks for being here.
BobbyThanks for having me on the show, Jefferson.