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Should you spend your crypto?
Episode 3611th April 2022 • Generation Bitcoin • McIntosh
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Shownotes

Michael Saylor - Never spend your bitcoin!

Jack Mallers - See how easy it is to spend your bitcoin!

What a dichotomy - let's discuss!!!!!

News

Cash app adds multiple bitcoin features

https://bitcoinmagazine.com/business/cash-app-adds-pay-me-in-bitcoin-lightning-features

https://cointelegraph.com/news/cash-app-users-can-now-invest-paychecks-into-bitcoin

Madeira accepting bitcoin as legal tender

https://watcher.guru/news/madeira-follows-el-salvador-to-accept-bitcoin-as-a-legal-tender

Robinhood incorporating lightning and adding crypto wallets

https://dailyhodl.com/2022/04/08/robinhood-announces-integration-with-bitcoin-btc-lightning-network-amid-rollout-of-2000000-crypto-wallets/

Shopify integrating lightning

https://blockworks.co/strike-rolls-out-shopify-partnership-facilitates-online-bitcoin-transactions/

Roatán Special Economic Zone makes bitcoin legal tender

https://www.cryptopolitan.com/honduras-sez-accepts-bitcoin-as-legal-tender/

Tesla, Blockstream and Block to mine bitcoin with solar power

https://coingape.com/tesla-mine-bitcoin-with-blockstream-block/

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I can be reached by email at mcintosh@genwealthcrypto.com and on twitter at @McIntoshFinTech. My mastodon handle is @mcintosh@podcastindex.social. Looking forward to hearing from you!

Website

https://genwealthcrypto.com

Music Credits

Protofunk by Kevin MacLeod

Link: https://incompetech.filmmusic.io/song/4247-protofunk

License: https://filmmusic.io/standard-license

The following music was used for this media project:

Music: Ethernight Club by Kevin MacLeod

Free download: https://filmmusic.io/song/7612-ethernight-club

License (CC BY 4.0): https://filmmusic.io/standard-license

Artist website: https://incompetech.com

Transcripts

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Hey, everyone.

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Hey, everyone. No one on this podcast is a financial advisor, and all information presented

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on this podcast is for informational purposes only. Now that we have the legal stuff out

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of the way, let's jump on in. Welcome to the Generational Wealth Cryptocurrency Podcast.

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I'm your host, McIntosh, and today we're going to be talking about should you spend your crypto?

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All right. So it's going to be a great episode today. I've got lots of news to cover.

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And then as I mentioned already, we will be talking about if we should spend your crypto,

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something I've been thinking about quite a bit lately. We'll start off with the news.

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Of course, we just had the Bitcoin 2022 conference, and as expected, there was a lot of news.

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I will go ahead and get out of the way. Unfortunately, in one sense, Jack Mauler's

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announcement was not that Apple was going to be integrating Lightning into Apple Pay or something

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along those lines. So we didn't see that. Jack did actually have a number of announcements that he

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talked about, and some things that I think, frankly, are very bullish for the Lightning

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network and for its growth. So we'll get to that in just a minute. But before we do,

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I wanted to talk about some of the other announcements. One of them is that Cash App

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is going to be adding Lightning features to the app. This Cash App is an app that's part of the

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block ecosystem, which is Jack Dorsey's company, Jack Dorsey, the ex CEO of Twitter. And if I'm

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not mistaken, he started Twitter. I'm pretty sure about that. But they did announce several

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features for Cash App, including the ability to convert paychecks into Bitcoin, to round off

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their debit and credit card payments into Bitcoin. So, in other words, if your credit

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card payment was $19.50, you'd round it up to $20, and the rest would get converted into Bitcoin.

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And also to receive payments through the Lightning network, as I mentioned.

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All three of those continue to show the evolution of Cash App

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into what's becoming a very digital, crypto-centric application. So, that was really cool.

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We'll continue on here. There is an island in the Atlantic Ocean off the coast of Portugal,

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I believe, somewhere around 400 miles off the coast, from what I understand.

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Called Madeira, and I hope I said that right. They're part of Portugal,

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basically like Puerto Rico is part of the United States. And during the conference,

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Portugal, I should mention before I actually even say this, Portugal happens to be a very Bitcoin

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friendly country, crypto friendly, no capital gains taxes, a number of other benefits. So,

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they announced during the conference that people who are in Madeira that buy and sell Bitcoin,

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they're not going to pay taxes on it. They're not subject to personal income tax. So,

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they are pushing Bitcoin as part of the plan to increase their profile in the crypto world

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and to hopefully bring more people there. Robinhood, another application

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originally for stock trading, they are incorporating Lightning.

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Very similar to Cash App, they are integrating the Lightning network. They are actually rolling

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out two million crypto wallets, according to this article. And this, of course, was announced during

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the Bitcoin conference. So, that's a completely new service for them. You can pay for items

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out of it. You can use it to store your crypto. So, somewhat similar to Cash App, they're adding

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these digital crypto integrations into their product. I think you're going to see that a lot

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over the next few years with a number of applications. Also during the conference,

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there was an announcement that was made that Tesla entered into a, get this, a Bitcoin mining

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agreement. That Tesla, the Tesla who's CEO, Elon Musk, famously said that Bitcoin mining is bad

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for the environment. And so, now Tesla is going to start mining in a partnership with Blockstream

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and with Block. So, a couple of major crypto companies there. Supposedly, they're going to

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collaborate on mining Bitcoin in a solar powered mining facility in Texas. So, I'm interested to

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see how this turns out. It will be powered by solar power and the battery infrastructure provided

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by Tesla. So, Tesla will actually provide the battery technology so that it, of course,

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can continue to run 24-7. So, that will be interesting. I don't know if they'll charge

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premium for that. I don't know if they'll somehow call that clean or something. I know that there

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are a number of companies already, in fact, who do not with solar necessarily, but do mine Bitcoin

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using clean energy. There's a company up in Canada, for example, that I'm sure there's more than one,

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but the one that I'm thinking of specifically, where they use hydropower, which does have an

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advantage in terms of this, of course, because it's running 24-7. They don't have to worry about the

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batteries. It's good to see the competition, though. It's good to see the innovation.

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All right. What else? We already talked about the paychecks. By the way, I would

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just note that if you're doing a monthly investment or bi-weekly or something like that,

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this might be something you want to check out. So, this is basically like a direct deposit. So,

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you can just buy your Bitcoin and have it show up in your cash app.

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Oh, yes. There's an island off the coast of Honduras, which is part of Honduras,

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called Roatan. It's a fairly famous, what would you call it? A fairly famous vacation spot.

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There also happens to be an economic zone. So, there's a place there where businesses

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are encouraged by giving tax incentives and this kind of thing. I don't know. It's Prospera ZEDE

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economic zone. Now, I do remember over the last few months or maybe the last year,

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there was rumors that Honduras was going to legalize Bitcoin. That, of course, not happened.

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But, the economic zone is now officially saying that they will accept Bitcoin as payment.

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It will function as legal money. And so, there you go. So, that's like as close as you can get

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to calling it legal tender without calling it legal tender. Granted, it's only in this

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one little area of Honduras. I certainly see this, if it goes well, spreading to the rest of Honduras

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in the near future, over the next year or two. We'll just have to see.

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So, let's talk about Mr. Mahler's announcements. In my mind, maybe they just, frankly,

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ended up being overhyped. I don't know. He's a showman. I will certainly give him that.

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He knew how to draw attention to what was going on. That happened. I'm not disappointed

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with the announcement, certainly. But, he did actually roll out a number of things

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with Strike. I will start with maybe the simplest one to explain.

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I mean, they are creating or have established a partnership with Shopify so that people can

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buy products online, and the merchant would be paid in... They buy products in Bitcoin,

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and the merchant would be paid in US dollars, or their local currency, I would assume.

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So, Shopify, if you didn't know, is a very large online shopping merchant-type service.

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I actually pulled up some stats for it. I had certainly heard of it before now.

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I did not know the extent of their... I didn't know exactly how large they were.

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So, I pulled up some stats real quickly. These are fairly recent stats, supposed to be 2022.

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I'll roll through these real quick. They started in 2004. So, they're not too recent, but fairly

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recent. They're second only to WooCommerce for shopping platforms. They have 23% of the market

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share in the United States alone. They are bigger than Squarespace, Wix, Magenta, Weebly,

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and BigCommerce, and you've probably heard of at least a couple of those.

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So, basically, those people, through very simple modifications in their online code, can

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accept Bitcoin as payment, and I think that's actually a really big thing.

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There have been systems to do that previously, maybe not the easiest. I think this will prove

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to be very easy. And this is the kind of adoption that we need to see for crypto penetration in

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general, Bitcoin specifically. All right. So, that was one of their big announcements.

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Another big announcement, which maybe is a little more obtuse, but I think could be equally powerful,

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maybe actually far more powerful. They announced a partnership with NCR. NCR stands for National

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Cash Register, a company that started doing just what their name says, supplying cash registers.

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Those cash registers became electronic, and now they do little point sale terminals. So,

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when you go in and do a credit card payment, a lot of times you're using an NCR terminal,

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and that goes across that system, so on and so forth. And basically, they're adding Bitcoin

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to this mix, through the Lightning Network. So, the 3% payment that the merchant sends off to

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MasterCard or Visa or whomever. In some cases, it's actually higher than that, but for MasterCard

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and Visa, I believe it's 3%. And that's gone, because it's not using that network. It's using

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the Lightning Network, and the fees, of course, are much, much lower. Basically, nonexistent,

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as we've discussed. There's a lot of companies that NCR uses. It's a lot of names. And they

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announced a partnership with another company, as well, that's somewhat along the lines. I'm

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not really going to discuss it. Most people wouldn't even have heard of it. But again,

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it's more integration. You're going to see this as we move forward. You'll go into Starbucks

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or McDonald's or whomever, and you'll be able to use the Lightning Bitcoin payment to pay for

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something. And that's exciting. People will see Bitcoin, Bitcoin, Bitcoin, as they move around

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in just regular daily life. So, that, I think, is very, very important. And over the long run,

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it may even be more important than Apple joining. I'm sure Apple will, at some point. They're going

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to have to. But this is probably even broader than that. Very, very interesting stuff.

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A lot of stuff going on there at the Bitcoin conference, of course. I understand there was

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roughly 30,000 people there. It certainly was the largest one ever. A tremendous number of people

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there. A lot of excitement. And, of course, not to jump into the market, but the market didn't

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cooperate. It went down, which is funny because it actually has gone down over the last several

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years during the Bitcoin conference, which is, I think, really weird. I don't actually understand

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that, but it's true. So, in a nutshell, that's kind of all the big announcements, at least,

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that came out of the Bitcoin conference. I hope I didn't miss anything. I did want to mention one

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other thing that you may not have heard about. So, I was reading through my Twitter a few days ago.

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I want to say it was around the 7th, so like three days ago. And saw that one of the tokens had been

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hacked. And it's a token I've never actually even heard of. Didn't really think a whole lot about it.

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I did follow up and find out exactly what was going on. So, apparently, this is like a meme

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token. I'm not even going to try and pronounce this. I don't know. X-O-L-O. I knew. So, this is like

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one of these meme coin tokens. And I've cautioned everyone, probably since the first

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podcast, that to be very careful about tokens outside of kind of these blue chip tokens, right?

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ADA, Ethereum, certainly Bitcoin, you know, maybe throw a few others in there

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because they haven't been around very long, they're not proven, so on and so forth. And

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we've discussed this often on. And here's a prime example. So, this was some new token. It hasn't

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been out that long. I brought up the market cap. It hasn't been out that long. But apparently,

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back on the 7th. Yeah, it was back on the 7th. This is what they posted on their Twitter.

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Unfortunate announcement. One of our developers has managed to trick us into signing a transaction,

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or TX actually is what they say, on our admin panel that gave him access to our LP tokens,

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our liquidity protocol tokens. He deceived us and was able to withdraw all tokens out of our

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pancake swap liquidity pool. So, they got scammed. One of their developers tricked them and withdrew

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all their tokens out of the liquidity pool. I'm sure it was quite a few. And as a consequence,

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you can go on to CoinMarketCap. It's XL, and you can look at it. It dropped 90-plus percent

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in the course of a day, just off a cliff. And they've got plans to try and bring it back,

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and they've snapshotted all their token holders. So, they basically made a list of everybody who

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owned this token. They're airdropping new tokens, and blah, blah, blah. They've got this plan to try

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and rescue this mess. But unfortunately, I seriously doubt that that's really going to happen.

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I mean, I think these people who owned this token are just basically out of luck. And it's

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unfortunate, and it does happen. And it happens predominantly on these tokens that they don't

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have a track record. I don't know anything about this token. I'm sure its market cap was quite

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small. I'm sure it hasn't been around very long, and I don't know what they had planned or whatever.

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So, I just would like to issue this as a warning. And this is why we're very careful. You don't want

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to invest in any project like this unless it's money that you can afford to lose. It's not going

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to hurt your portfolio, so to speak. So, anyways, unfortunately, that was some of the news of the

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week. So, that was it. We're going to move on at this point. I did actually want to talk about

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a couple of things. I saw this on Twitter. I'd honestly already been thinking along these lines,

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and it crystallized it for me. So, I wanted to spend 10 minutes or so discussing this

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because we hear two different memes in the crypto community. And I think it's important

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to discuss these and think about these. You've got somebody like Michael Saylor, whose company

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is one of the largest holders of Bitcoin in the world. Microstrategy is the name of his company.

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He's the CEO. And he's famous for saying, never sell your Bitcoin. I'm never selling my Bitcoin.

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Jack Mallers, on the other hand, basically got up on stage at the Bitcoin conference and said,

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here's a great way to spend your Bitcoin. So, those are two conflicting viewpoints.

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And how do we resolve that? Well, first of all, I want to step back for just a second.

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Bitcoin was created as digital cash, full stop. That was Satoshi's original dream for Bitcoin.

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It was not to make people wealthy. It was not to create an asset that grows in value.

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People don't realize that. But if you read the early emails and discussions going on in the forums

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and this kind of thing, in the early days of Bitcoin, that was the idea. And they wanted

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to make something that was censorship resistant. They wanted to make something that was resilient,

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that was, you know, allow people to manage their money, apart from the government, really,

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right? And out of the government's control, so that things like the craziness that we're seeing

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going on in the world right now are not affecting it. But it was not an asset. It was not an

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investment vehicle. Now, on the other hand, as Bitcoin grew, there was a transition period,

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and it became not just digital cash, because God forbid you would want to be the guy who paid

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however many tokens it was for the three large pizzas at the Papa Johns in San Jose

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that turned into, you know, a net worth now of like $400 million. But

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I would caution us that it's important in the evolution of Bitcoin that we do somewhat

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return to these roots. And here's why. Bitcoin is often called digital gold, digital gold.

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Digital gold is an asset, asset that in theory appreciates over time. It should be inflation

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proof. It's not done very well at that in the last 10 years, in my opinion, but it should be.

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It's much like what we claim for Bitcoin as an asset, right? Except gold is heavy.

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Gold is a physical object, of course. And of course, Bitcoin is neither one of these.

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Yes. But gold is also finite. There's only a certain amount of gold that's in the Earth's

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crust. And it's not like there's going to be new gold made. Bitcoin is the same way.

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So a lot of times people compare Bitcoin to gold, but I would caution you that

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that is a form of thinking that is, what's the word I'm looking for? It keeps you trapped.

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And I sincerely mean that. It can be more than that. It should be more than that.

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But gold as an asset is only $10 trillion. I don't know if you knew that. If you listen

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to the show long enough, you'll find that out. Okay. So if there's only $10 trillion,

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let's see. Here's the breakdown right here. $6.789. Yeah, this is showing roughly $12 trillion.

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So $5.8 trillion in jewelry, $2.8 trillion in private investments, $2.1 trillion in official

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holdings, and $1.8 trillion in other, whatever that means. So let's say it's $12 trillion.

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What does that mean? Are we going to limit Bitcoin to only $12 trillion? It's already

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a trillion-dollar asset. That's only 12X from here. So theoretically, at the price that we're at,

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$42,000. Let's just go ahead and go a little higher. $44,000. Let's just say $50,000. Let's

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just round it up to $50,000. $50,000 times 12. You want to guess? It's only a $600,000 Bitcoin,

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and yet everybody's screaming about, well, maybe that's a bit strong, but $1 million Bitcoin,

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$1 million Bitcoin, and I will tell you, if we contain Bitcoin as an asset and an asset only,

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it will never reach $1 million per Bitcoin. It will not. Not at today's figures. Now,

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I can't account for inflation. Give it a few years, it may reach $1 million simply because

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of inflation, but I'm talking about in current value and current numbers. Does that make sense?

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I hope it does. Now, on the other hand, there's a much bigger market when we start talking about

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things outside of assets, things outside of gold. If we're actually using it as a currency,

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we're spending it, we're utilizing it, then the market gets much bigger and the possible value

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for a Bitcoin can get much higher. I would argue that that is the path forward. Bitcoin's not just

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an asset. It's a great asset. It might become the world's reserve currency, but it's funny because

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you got the word currency in there and that's not an asset. A currency is not an asset.

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You see what I mean? An asset is an ounce of gold. Now, you can make gold coins

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that are worth a certain amount based on that asset's value, but the gold bar is the asset.

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So, having Bitcoin be the world's reserve currency is a step towards moving it out from becoming just

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an asset. Adding it to all these Shopify sites as an option, that's making it a currency,

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not just an asset. So, I would encourage us as we move forward in this world of Bitcoin,

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as we move forward in this world of Bitcoin and crypto domination, and not to stir the pot,

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but to be honest, this is what Ethereum does that Bitcoin doesn't. It's never talked about as an

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asset. Yes, we hope that Ethereum grows. Ethereum is not digital gold. Ethereum is not digital

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silver. Ethereum is something that people are using to do things, and that's the difference.

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Now, people may disagree with that, and that's okay. That's my opinion.

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I think in general, that is the correct opinion, and you can back that up with statistics and facts.

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And yes, you can come to me and say, well, we can do NFTs on Bitcoin, and we can do, but you don't

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see that. We buy Bitcoin, we hold Bitcoin. And frankly, and I'll probably get in a lot of trouble

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for saying this, but the people who are the Bitcoin maxis who, God bless him, Mr. Saylor,

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who says, never sell my Bitcoin, in the long run, I think that's unfortunately going to be

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counterproductive. Do you see what I'm saying? Are we going to limit Bitcoin to $600,000 or so,

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or are we going to allow it to grow and expand? Why can't it be a $20 trillion asset? Why can't

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it be a $50 trillion asset? It only has to take over enough functions to become that.

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On the other hand, you have Jack Mauler over here saying, spend your Bitcoin, spend your Bitcoin,

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spend your Bitcoin, spend your Bitcoin, spend your Bitcoin. Shopify, Robinhood, Cash App,

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all of these different things. And of course, some of them, Cash App, hey, you can save part

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of your paycheck in Bitcoin. That's helping you Bitcoin as an asset. But some of these things

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are certainly giving you the ability, specifically revolving around the Lightning Network, to spend

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your Bitcoin. And I sit here on a podcast that's supported by Value for Value talking about this,

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saying, spend your Bitcoin, please, to support this show. Because I'm never taking advertisers,

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and I'm not taking sponsors, and I'm not taking money and whatever to talk about things.

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Because I simply want to provide value to the listener and then have the listener support me.

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So we have the mechanism set up to do that through Value for Value, through Podcasting 2.0,

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through the Podcasting 2.0 apps. So I am actually asking you to spend your Bitcoin,

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just like Jack Mauler's is. So how do you counterbalance these two things?

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On the one hand, save your Bitcoin. On the other hand, spend your Bitcoin, right? Well,

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it's probably not really that hard. What I would tell you to do, my recommendation would be,

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you buy the Bitcoin that you're going to invest, and that goes into a certain wallet or a certain,

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maybe a hardware wallet, like we talked about last week, right? And then you buy Bitcoin,

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and then you buy Bitcoin that you spend in your Lightning Wallet.

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And you can do that easily through the Strike app, thanks to Jack Mauler's, or

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maybe the Cash app, or something like that. I've done both of those, actually.

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So there are multiple ways that you can do that, and then fund your Lightning Wallets,

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and spend that money to kind of build up this system. If we don't start supporting each other,

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then it needs to evolve and expand. It doesn't need to contract and fall in on itself. Does

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that make sense? I hope that does. So just some thoughts. Overall, I thought it was a great

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Bitcoin 2022 conference. A lot of good stuff. A lot to take in. So I hope that was helpful,

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and I hope that helps you frame your thinking. Of course, I want you saving your Bitcoin,

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but I don't want you to hold onto your Bitcoin so tightly that it never gets used.

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You buy your Bitcoin in the amount that you think you're going to spend over the next few days or

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weeks. This isn't a long-term hold for what I'm talking about. So if you're supporting podcasts

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through Podcast 2.0, or if you're buying something on Shopify, or whatever, and I would encourage you

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every chance that you get to do that, the more adoption that we see, the better off that we're

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going to be. Okay. Before we end things, I've had the streaming Sats, the Lightning support set up

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for, I don't know, three or four weeks at this point. And I've tested it, and it's worked. And

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to be perfectly honest, I haven't had any support. I haven't had anybody stream any Sats. And I know

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I've got listeners. Our numbers have actually been growing. And it's not tens of thousands,

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but we're getting up there. And I'm very pleased about that. I was completely startled Saturday

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night. We were with some friends, and all of a sudden my Telegram thing pings, and I looked down,

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and not only had somebody streamed some Sats, somebody had actually boosted,

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an episode. And I don't have the tooling in place at this point to actually tell who,

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or if they sent a comment, a boostogram, or whatever. I'm going to have to work on that

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part of it. But to whomever it was, I am extremely, extremely grateful. And I'm hoping,

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of course, that this becomes a regular occurrence as we move forward. I will have it set up at some

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point, hopefully in the near future, so that people can, when you boost, you can send a message.

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That's already part of the podcast end of things, the podcast player end of things.

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There's some more work I guess I need to do on my side so that I can see those.

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And I would love to have feedback, but I just wanted to say to whomever it was,

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as our first booster, so to speak, and our first streamer, I really do appreciate it.

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And it means a lot. So that wraps that up. And that wraps things up for this week.

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And not to beat this up, but I will say that the Generation Wealth Cryptocurrency Podcast

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supports Podcasting 2.0. It's a value for value podcast. We don't have any sponsors.

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We don't have any advertising. And there are three ways you can support the podcast,

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time, talent, and treasure. If you want to support the podcast and it has the time or talent,

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I could use some help with things like chapters for the podcast, transcriptions,

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probably a few other things. Treasure is just what it sounds like. If you find the content valuable,

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you can support the podcast by streaming Sats from the Podcasting 2.0 app, or you can send

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support via PayPal the old fashioned way to mcintosh at genwealthcrypto.com. You can get

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a Podcasting 2.0 app for the optimal listening experience at newpodcastapps.com. If you like the

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content, I would love it if you would tell your friends about the Generation Wealth Cryptocurrency

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Podcast. Thanks for being here. As always, I hope this has been helpful and I would love to hear

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from you. I'm on Twitter at McIntosh Fintech and you can reach me by email at mcintosh at genwealthcrypto.com

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