Owen Schrum: Bitcoin and Blockchain

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welcome to

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fun with annuities with your host me

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stan

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the annuity man america's annuity agent

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can annuities be fun

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can contractual guarantees be fun

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absolutely they can

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find out the brutal facts about

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annuities with no sales pitches or high

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pressure nonsense

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just the brutal and factual annuity

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truth which is all you need to hear

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let's have some fun with annuities and

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let's have that fun

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start right now

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[Music]

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welcome to fun with annuities my name is

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stan the annuity man america's annuity

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agent licensed in all 50 states i'm so

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glad you're here today

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because as you know with the previous 50

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podcast i'm just

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riffing it man i'm going 100 miles an

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hour it's just me

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um but we're having our first guest and

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he's going to be on

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a lot um and this all happened we're

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talking on the phone he's a very good

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friend of mine

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and uh you know we're talking about

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bitcoin and cryptocurrency and

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blockchain and those type of things

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and the reason i called him to explain

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it to me in english

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so that stan could understand it and he

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did and i'm like you know what

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i need you on the podcast so let me give

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you a little bit of background

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of who he is and and how we know each

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other full disclosure

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um and then i'm gonna let him tell you a

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little bit about who he is in his firm

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and then we're going to jump in so

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his name is owen schrum and he is the

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founder and owner of

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shrum private wealth management and all

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of his contact information is going to

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be on the site

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so i'm not going to sit here and repeat

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it and i mean some of you are driving

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some of your own treadmills whatever

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okay with some podcasts

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this can be on my site just go to the

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annuityman.com um

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so owen and i worked together we worked

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together

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at dean wetter and then dean wetter was

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purchased by morgan stanley as they say

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but morgan stanley

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and so we were partners um he taught me

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everything i know about the marcus and

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i'm not

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kidding with that i'm not that's not an

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understatement he is

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he is someone i trust he's someone you

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can trust he is

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he's forgotten more than most people

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ever know about the market and that's

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not a joke

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um and he uh we we're we're good friends

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because we're both from north carolina

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originally

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i'm wearing the the university of north

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carolina carolina blue hat

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right now um in in honor of

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uh we're big basketball fans um and he

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owes me for life because i got him a

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signed

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um autographed pitcher personalized from

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dean smith before dean smith

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the historic basketball coach of north

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carolina passed away so with that being

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said

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oh and give us kind of give us the

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background of shrum private wealth

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management

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make sure to tell them that you went to

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chapel hill and what you majored in i'll

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let you go

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all right i'm in another life about 4

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000 years ago i was a chemical engineer

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and made my way into one of the training

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programs in wall street

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and 35 years later we're here now the

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background for our company is this

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after stan and i worked on what's called

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the wire houses wire houses in the day

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with the wall street firms the merrill

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lynch's the morgan stanley's

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the payne webbers and a thousand other

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names that have been disappeared and

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taken over by banks

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but so we worked in the warehouses

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forever and after seeing the things they

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did to customers in our opinion

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and i think you understand they knew the

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mail would agree with this

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sales contest in-house products for

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non-disclosure they weren't doing

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the job for clients that we thought was

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right so

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we weren't going to change it so i

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started my own company to do it right

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that company is from private wealth

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management we do investment planning

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and investment management and planning

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on a fiduciary-based

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a legal fiduciary standard of taking

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care of clients interests first

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and on a fee based basis no commissions

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so our background

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is we do investment management we do

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advanced planning

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for clients and everyday people just

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like you

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and and with 35 years in the business

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it means one we're old i'm old and two

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i've seen it all

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and i've seen the mistakes and we can

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guide people from making those same

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mistakes

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that's my story stan and that's a good

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one and the only reason that oh and i

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aren't still working together i went

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through some personal issues and some

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family issues a long time ago which he

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as

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the best friend i i have probably what

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you know helped me through that and we

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just

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at that point in time he was doing his

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own thing and i just needed to take some

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time off

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but you know we still talk all the time

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and and i'm so glad he's here so let's

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jump into the topic

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um you know people are very interested

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in bitcoin and cryptocurrencies

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and and what you explain to me

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blockchain

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i don't know what order you want to go

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in because they're

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all somewhat intertwined but um i'll

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just let you have the floor

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and you can choose where you want to

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start whether it's bitcoin

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the overall cryptocurrency market that

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includes bitcoin

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and then my favorite topic that you talk

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about is blockchain

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because you can explain it to people

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like i've never heard it

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and this is yeah we're not going to talk

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about annuities people i mean

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we might we might delve into the

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question of you know our annuity is

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going to have

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be crypto in the future but that's later

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in the program but i really want this to

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be

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educational for for my listener so go

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and jump in and i don't know where you

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want to start but go ahead and start

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i thought about it i'm going to do it a

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bit different let's go back in time

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let's lay a basis 10 000 years ago

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two people wanted to trade i had an

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apple you needed an apple

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we did a transaction i sold i gave you

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an apple it was just dan

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and owen doing a transaction with an

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asset

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involved later on that would that didn't

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work though if someone wanted to trade

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an apple for pieces of a cow you needed

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currency so things like gold

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coins evolved bronze coal uh

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bronze coins diamonds so those were

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money those were currency and we would

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trade

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goods for gold coins

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later on from roman times before that to

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the pharaohs

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they just and kings they decided we'll

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as the king i'll issue kingdom-oriented

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coins they don't necess necessarily gold

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but they were coins backed by

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a king or a pharaoh and that was the

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first

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currency because there wasn't value

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behind it there was a promise

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of a gulf central government so that's

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where we've evolved to today

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if money is essentially a fiat currency

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that is issued it doesn't really have

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value no one's on a gold standard

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anymore

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it's but it is backed by a central

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government or a central bank

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to guarantee its trust so let's go

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back now once nearer term 2006

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2007 2008 the banks are collapsing

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and there were people saying you know if

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i want to do a transaction why do i have

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to go to a bank

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so any of anyone here or you've ever

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gone overseas

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just to go get a foreign currency they

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want 10 to turn it into euros

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and 10 to turn that euro back the banks

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are expensive transactions and quite

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frankly not everybody in the world

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and third world countries even have

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banks so some

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an anonymous person sakamoto wrote a

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paper

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it really wasn't a real person he wanted

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to keep his anonymity

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what if there's a currency that's

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digital that's online that

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is not using an intermediary like a bank

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to do the transaction so there's no

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frictional costs

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there's nobody in the middle to take a

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cut and that was the idea

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of cryptocurrency the very first one was

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bitcoin so but let me

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say something that's kind of important

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to understand

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on a basic level bitcoin is not

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we're from the south the south you'd say

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i want a band-aid i want a coca-cola

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but you meant you want a soft drinker

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you uh you but you use those

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bitcoin is synonymous with digital

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currency

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but it's really called cryptocurrency

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and what that means is

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the whole currency's reason to be is

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that it is set up

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digitally with cryptography meaning

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cryptography is a

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simple code our code between two parties

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that's

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private like they used to use in the

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codebusters in world war ii with the

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navajos

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right so that's cryptocurrency bitcoins

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the most famous

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but by no means is it the only one and

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there and there's

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there's numerous if you go to you know

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market watch or somewhere you can

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pull up the cryptocurrency there's many

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types um

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it's interesting you know it's

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interesting how this has grown and i

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and i saw just this morning some

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analysts said that they're they're

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giving some

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90 000 type target on all this

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the interesting part about bitcoin and

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cryptocurrency

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uh to me is just that people are

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investing in it without knowing really

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what it is

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i'll guarantee you there are people on

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this podcast that invest in bitcoin and

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didn't

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you've probably told them some things

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that they don't know but

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um in my opinion as i told you when we

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discussed this um

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you know when i was driving down the

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road is it's gonna it's hard for me to

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believe that

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the united states government goldman

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sachs jp morgan wells fargo citibank

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chase

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all the big banks aren't going to be

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involved in this at the end of the day

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um just because there's money there in

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it it's trackable what you're getting

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ready to explain on the blockchain side

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of it

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um what's your opinion on the government

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and the big banks

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at the end of the day being the being

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the winners with cryptocurrency

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well before i answer that i'm going to

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tell you what it is first because that

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helps explain the answer to the

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listeners here

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good bitcoin quite simply

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is a share it's a bitcoin

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is a online digital

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currency that's what they want to say it

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is a currency

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that's through a secure system

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run by a massive decentralized

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computer system tens of thousands

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hundreds of thousands of people in a

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computer system

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all linked together like the original

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internet stand

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like the original internet and all

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bitcoin

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is is one person has a

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password on steroids it's called a

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privacy private key

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then there's a password on the

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decentralized computer system that all

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these 10 000 people have and that's the

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public key

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all bitcoin is is two keys somewhere and

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someone deciding there's a value to it

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so to me right now listen the definition

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is is it a currency

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in my opinion it is a speculation tool

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an investment if you want but a very

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speculative one

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that is an investment in a new

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technology called blockchain

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it's a new digital system which leads us

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to the most important part of this

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podcast in my opinion is explaining to

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people

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blockchain as as how it how it um

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works you know why it works with with

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cryptocurrency

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um which includes bitcoin and then how

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it benefits us

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in other areas that people probably

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aren't even thinking about

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because it's not about bitcoin it's

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really not about cryptocurrency i think

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cryptocurrency and i think you would

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agree

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eventually some form or fashion of it's

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going to be there it's going to be used

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it's always going to be it's never going

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away

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okay but blockchain which is the

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underlying foundation of it all

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is the real value proposition for

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people not only from an investment

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standpoint but from a lifestyle or life

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standpoint

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am i right about that absolutely there

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are people who think blockchain is the

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new internet

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and actually blockchain is the internet

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of

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things the internet of assets the

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internet

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is the internet of things so let's

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explain

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blockchain on a basic level

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understanding that at a computer level

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it takes

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people speaking far different language

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than us to make it work

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but on a basic level here's what

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blockchain is

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remember in the old days you had ledgers

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ledger was nothing but an old-timey way

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of

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keeping up with accounts it was a book

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where people made

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journal entries someone someone made a

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credit

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someone made a debit and you wrote it

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down on this

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ledger and that's that and picture the

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old banker with shades

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writing down notes in a book like

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if we're old like we used to do the old

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christmas savings books

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exactly that's what a ledger is today

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ledgers have been replaced by

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spreadsheets a great example of a

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spreadsheet is quickbooks that

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businesses use

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right that is a ledger though it's an

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online ledger

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now now blockchain is a shared

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picture this you have a ledger it's

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yours

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there's a book you see it picture

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online a hundred thousand

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a hundred million people pick the number

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have this same ledger

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they all can see the same thing

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and the way that works the definition of

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it is that is a

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shared decentralized ledger

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for recording transactions and assets

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okay give someone give us some

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examples of how that's working

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outside of crypto and then come back and

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talk about or

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you can do talk about how it's used with

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crypto and cryptocurrency and then come

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back and

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talk about how it's used in other

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applications

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i'm going to ask i'm going to do an

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application not the crypto first because

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it really makes it

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understand how crypto will work after

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okay

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so here's an application no now the

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blockchain

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data is stored in blocks blockchain

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means you got a law a

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series of data called blocks that two

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parties agree upon

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private public they agree once it goes

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into the blockchain

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once that block goes into this worldwide

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ledger

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it can never be changed it's there so it

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can't be

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hacked it can't be changed it can't be

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made fraudulent so it's there and two

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parties agree upon and the next block

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builds upon that think of a case where

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you

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go see a doctor and he gives you a blood

15:08
pressure medicine

15:09
and you go to the next doctor and you

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break your leg and they give you a pain

15:13
pill

15:13
then you go to your next doctor for your

15:15
heart medicine and you go to another

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none of those doctors are ever talking

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to each other how many overdoses well

15:21
they ask you to fill out the form

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but none of us remember what it is and

15:24
if it's an emergency situation

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you can't fill out the form because you

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can't you're an emergency so

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so what you're telling me is they can't

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access it all because it's in the

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blockchain

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okay blockchains remember the blockchain

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my definition is

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a shared worldwide ledger that everybody

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looks at so

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you go to the doctor you and your doctor

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sign an agreement

15:47
that block of information remember block

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goes into blockchain

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it's there for everyone to see that's

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given permission you go see another

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doctor

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he puts that new medicine in there on

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the next chain remember they're linked

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caught like a chain so another block of

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information the next change

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you then have a car wreck you're rushed

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to an emergency room

16:10
and shared in wyoming and everybody

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knows who you are

16:14
and the doctor looks on blockchain this

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person has a heart issue this per is on

16:20
blood pressure medicine

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he's on blood thinner he knows

16:24
everything about your medicine just by

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looking at the blockchain

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so everybody in the world can see what's

16:31
going

16:32
on in any kinds of transactions be it

16:35
banking

16:36
buying and selling used cars you can

16:38
tell who's owned that car

16:40
five people back you could buy life

16:42
insurance in a day

16:43
you can buy life insurance in a day

16:45
because your medical records are all on

16:47
blockchain

16:48
right they'll have to send a nurse to

16:49
your office

16:51
so blockchain is shared

16:54
worldwide like the internet but it's

16:56
data

16:57
that's shared for users to see

17:00
so criminals want to go in there and

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change it tell me why they can't

17:04
or bad people why can't they change it

17:06
oh and why can't

17:08
blockchain be taken advantage of to

17:13
you know in in hurt the consumer why why

17:15
can't that happen

17:17
every block of information has

17:20
something called a hash and it's a long

17:23
series of

17:24
numbers once it goes in there it can't

17:27
be

17:28
changed if something's wrong it can't be

17:30
changed if something needs to be

17:32
changed about it what you do is you have

17:34
to enter a new

17:35
code with a new block of data to change

17:39
it

17:39
and before long stand you've got

17:42
hundreds of millions of 20 250 code

17:47
messages of hash chains that you have to

17:51
change them

17:51
all the way back to the entire

17:53
blockchain and

17:55
in and then on top of it

17:58
you got the way it works is you've got

18:01
hun tens of thousands if not hundreds of

18:03
thousands of people

18:04
on this network they're called nodes in

18:08
odes and they do calculations to

18:12
when something goes in to verify it

18:16
and if something happened fraudulently

18:19
they're caught by ones of these hundreds

18:21
and what happens when they're caught

18:23
it kicks it out and it stops it it's not

18:25
allowed to happen

18:27
in blockchain someone has to verify it

18:28
remember the public and private key

18:31
somebody some user

18:34
in the blockchain has to verify this

18:37
information is correct

18:38
through a super complicated mathematical

18:41
mathematical equation an algorithm if

18:43
you want

18:44
and has and then people have to

18:48
verify that information is correct which

18:50
leads us to kind of the basic question

18:52
which maybe we should have started with

18:54
which is

18:56
what is a cryptocurrency and this let's

18:58
just use bitcoin as an example because

19:00
it's one of many

19:01
how is a bitcoin made where did they

19:04
come from

19:05
a bitcoin is a digital message

19:08
someone goes there's a blockchain

19:11
a company creates a block

19:15
network all these users

19:19
have these complicated codes and they

19:22
run

19:23
these super complicated calculations

19:26
they're called bitcoin

19:27
miners am i in ers not

19:30
ors and these miners run calculations

19:34
and if they figure out your private key

19:37
they verify the transaction

19:39
but they get a bitcoin the point is they

19:42
can just be created

19:43
it's not it's like they can be created

19:46
anyone can start a network

19:48
is that good or bad um

19:52
if the concept that it's good because

19:55
you don't have to have a central bank to

19:57
create it

19:58
to me the concept is why can't you just

20:01
keep creating them

20:03
yeah and so the kind of like what we're

20:06
doing now owen with

20:07
the printing of money right that's

20:10
exactly right

20:11
so so the valuation if we keep if we're

20:13
continuing to create them obviously

20:15
if you have more there's gonna it's

20:16
gonna be worth less maybe

20:20
well rationally

20:23
bitcoin says they're limiting their

20:25
bitcoins

20:26
at 30 mi a 30 million

20:30
a certain number but then comes ethereum

20:32
and then comes

20:34
uh coinlight coinbase there's no limit

20:37
as to how many new networks can be

20:39
started

20:40
so essentially all bitcoin's value is is

20:43
two people agreeing upon trading and how

20:45
much the value is

20:46
which leads us to tulip bulbs exactly

20:49
because tulip bulbs for the people that

20:51
have some financial knowledge of history

20:53
history knowledge back in the day in the

20:57
netherlands i guess

20:58
those were commodities those were traded

21:00
tulip bulbs were

21:02
worth thousands and thousands of dollars

21:04
and every time i see

21:06
a bitcoin or or cryptocurrency valuation

21:09
that i'm like wow that's really high

21:11
in my opinion i think of tulip bulbs

21:14
um what am i missing here it just seems

21:18
like there's there's a missing piece to

21:20
all this

21:21
you i started this off by saying in my

21:24
opinion and let me preface

21:26
in my opinion absolutely we're not we're

21:29
not experts in this we're just

21:31
you know what we are we're pragmatic

21:32
realist but i

21:34
i have to admit i i took this from

21:36
someone i saw at a financial conference

21:38
who said

21:40
bitcoin is a speculation in a blockchain

21:43
network it's not he said think about it

21:47
so it's it's a

21:48
everyone's saying this is a new currency

21:50
it's going to replace money

21:52
so you say you want to get paid in

21:53
bitcoin

21:55
bitcoin came out in

21:58
january 20 of 2021 and it was 36

22:01
000. uh four days later

22:04
later it was priced at 31 000.

22:08
it loses its value 13 and two or three

22:12
days

22:13
who's ever going to take their salary

22:16
and take their currency that can

22:18
fluctuate 10

22:20
at a time i don't believe that's going

22:22
to happen

22:23
until something is done via either

22:26
government regulation or private

22:27
regulation

22:28
that makes it a more stable

22:31
valued digital entity and when

22:35
i'm assuming we're headed in that

22:37
direction just because

22:39
it seems logical that cryptocurrency

22:42
whatever you want to whatever the is

22:44
going to be the the final version that

22:46
or

22:46
there's going to be multiple versions

22:48
but whatever our government

22:50
can get their greedy little hands on and

22:52
and control um

22:55
i mean what's the what's the end game

22:57
and how long do you think guessing

22:59
obviously with calculated gus

23:01
how long until where the public truly

23:04
accepts it

23:05
it's regulated to the point that people

23:07
feel comfortable with

23:08
and the volatility is taken out and

23:10
that's that's a that's a big question

23:12
but

23:13
what's your opinion on that some people

23:15
say it's going to be a fad and it'll go

23:17
away in five years

23:19
i don't believe that do you no i don't i

23:21
don't either

23:22
i don't but it's funny you mentioned

23:24
today i'm watching cnbc and they had the

23:27
securities and exchange commission

23:28
former commissioner jay

23:30
clayton on he made an interesting

23:32
comment this morning this is the

23:34
securities and exchange commission

23:36
he said bitcoin will have to end up

23:39
being regulated

23:40
both in the united states and

23:43
internationally

23:44
both directly and indirectly either

23:48
through direct regulation

23:49
or by regulating how it's accepted and

23:52
how it's taxed

23:53
quote unquote because because it's kind

23:56
of the wild wild west right now

23:59
obviously you know criminals the black

24:01
market the mafias of the world you know

24:03
the the

24:04
the organized crime rings this is a this

24:06
is a no-brainer for them

24:08
they don't care about the volatility all

24:10
they care about is it's not trackable

24:12
and traceable at this point in time what

24:15
is it

24:16
it is it is right now it's it's so

24:19
complicated to trace it is essentially

24:22
non-traceable that's the beauty of the

24:25
the the good or the bad thing is the

24:27
blockchain

24:28
technology that we talked about is so

24:30
good

24:32
bitcoin cryptocurrency is just one

24:34
little bitty part

24:36
of blockchain but blockchain is

24:39
everything there is no

24:40
cryptocurrency without the blockchain it

24:43
is that

24:44
good now bitcoin can be hacked

24:47
and has been hacked it also can be lost

24:50
i mean give an example of loss because

24:53
i'm like what

24:53
how do you lose it well first of all you

24:56
can't touch a bitcoin but how do you

24:57
lose it give an example of where

24:59
how that's happened remember what i said

25:02
bitcoin is

25:02
nothing more than a private key

25:06
and a public key and i'm asking you you

25:09
and your listeners to

25:10
think of a public and private key is

25:13
nothing more than a

25:14
really really sophisticated password a

25:17
password on steroids so you have a

25:21
bitcoin what you have is a private key

25:24
your password if you lose that

25:27
private key your money is gone

25:32
there's no time which i've lost my

25:35
friend that sounds like something that

25:36
would happen to me

25:37
so there's a case right now is someone

25:39
who has 10 million dollars in bitcoin

25:42
oh my he lost his private key oh my

25:45
he typed it and you only get 10 tries if

25:47
i'm not mistaken

25:48
and he was on his ninth and the next

25:51
time he got it wrong

25:52
it shut it down and you lose it but

25:56
where does it go it just

25:57
goes it's done it's poof remember i

26:00
remember i said it's a it's a it's two

26:02
passwords on a digital network

26:04
so if the other password doesn't exist

26:06
it doesn't exist it doesn't

26:08
they estimate that wow of all bitcoin

26:10
has been lost permanently that was

26:12
issued

26:14
yeah that's got it that's got to be

26:15
cleaned up a little bit kind of a

26:17
broader question

26:18
and i want your opinion on this i know

26:19
my my listeners are going to want to

26:22
hear this

26:22
okay this is sounds interesting i get it

26:26
what's gonna happen to the dollar the

26:28
hard paper dollar

26:29
that me and you grew up with and

26:31
everyone else out here grew up with

26:33
where's that headed

26:35
whether it be by cryptocurrency

26:38
or by credit card or by smartphones

26:42
while it won't disappear the importance

26:45
of the dollar

26:46
for transactions is going to be

26:50
minimized and diminished year after year

26:53
after year you're talking about the

26:54
paper dollar the coins the hard coins

26:57
the hard that the dollar

27:00
currency will not disappear no but

27:03
but me going to the store with with a

27:06
hundred dollar bill

27:07
it seems fleeting actually for me i

27:10
i use cash and sometimes i you know i

27:14
try to use cash and people like well we

27:15
don't take cash especially

27:16
in the cove at times but i think that's

27:19
going to trend

27:20
even more to where people don't take

27:23
cash

27:25
now think of let's let's together as a

27:28
universe of listeners and you and i

27:30
think about another scenario we've

27:31
discussed how good

27:32
blockchain is and bitcoin is exist

27:36
to cut out the banks and be able to use

27:39
blockchain

27:40
for it but there's all these issues

27:42
we've talked about

27:43
but what if we could cut out the banks

27:46
and the credit cards

27:47
by using the dollar on a blockchain in

27:50
other words

27:51
we're not necessarily using bitcoin but

27:53
you allow

27:54
currency to evolve so that it can be

27:57
transacted

27:59
case in point you wanted to you want

28:02
here's a real problem in the in the

28:03
third world

28:04
particularly africa and we're they're

28:06
trying to grow

28:07
and we're trying to industrialize to

28:09
increase the quality of the life of

28:11
people

28:12
they don't have banks

28:15
most of them don't have credit cards

28:17
it's hard even when the world bank wants

28:20
to fund a smart young business and say

28:22
um kenya they have a hard time getting

28:24
them the money and not it not being

28:26
confiscated

28:27
so what so that's where blockchain comes

28:30
in

28:31
you credit the world bank credits a

28:33
kenyan small business

28:35
uh a million dollars loan on blockchain

28:39
he then can go down and go and receive

28:42
it in kenya

28:43
without a bank taking 10 percent of it

28:45
or a third or

28:47
payday lender or someone stealing it so

28:50
imagine current legitimate financial

28:54
transactions

28:55
evolving from the credit card companies

28:57
and from western union

28:59
and from chase and city corps to the

29:01
blockchain

29:02
and therein lies the application there

29:04
you go

29:05
cryptocurrency in my opinion it won't be

29:08
cryptocurrency it'll be currency

29:10
and it will evolve through the

29:11
blockchain to to doing financial

29:14
transactions

29:15
including insurance including stocks

29:18
including bonds

29:19
including currency through this

29:21
blockchain technology

29:22
which leads to the one annuity question

29:24
of this whole podcast on the number one

29:26
annuity podcast on the planet fun with

29:28
annuities

29:29
a new annuity annuities with

29:31
cryptocurrency internal

29:35
what am i missing i get calls like this

29:36
okay so i'm like come on man i don't

29:39
know let me ask oh it

29:40
but i'm asking owen now tell me about

29:44
that in the future well here's where i

29:46
here's no

29:47
now so happened i read a read a white

29:50
paper by this no

29:51
none other than the state of florida

29:53
insurance commission

29:54
okay and here's what they and they're

29:57
continuing ed

29:58
you'll probably have to read this when

29:59
you do your continuing edit oh no

30:01
[Laughter]

30:03
where they are envisioning visioning

30:06
bitcoin but more importantly blockchain

30:09
blockchain being used is think about

30:13
people that insurers don't want to

30:15
insure

30:17
someone with a rare disease they can't

30:19
get life insurance or someone

30:21
that is in a flood zone someone who has

30:24
a hard time getting insurance and it's

30:26
really expensive

30:27
10 rich investors could go over here and

30:30
create an

30:30
insurance pool which is sort of what

30:32
lloyd's of london does in a physical

30:34
room

30:35
okay i can create a pool of money and

30:38
ensure

30:38
for a profit these high risk people who

30:42
need

30:43
risk a risk deferral event risk needs

30:46
insurance or lifetime income

30:48
or lifetime income and they they're

30:50
essentially

30:52
cutting out the insurance company

30:55
by creating a private insurance pool

30:58
wow i love it i love it even if it

31:02
you know in the future puts me out of

31:03
business if it's pro customer i

31:05
i love it because i is as many

31:08
middlemen as you can cut out absolutely

31:11
and still get the right product i mean

31:13
the better so let me ask you a question

31:16
from the standpoint and i know

31:18
you know you can contact owen you know

31:20
his his website is

31:21
is s-c-h-r-u-m-p-w

31:25
dot com you can go to my site and you

31:27
can get there but

31:28
you can contact owen for specific

31:31
recommendations things like that he

31:32
can't do that

31:33
on this podcast but i want him to give

31:35
more of a broad answer from the

31:36
standpoint of how he looks at

31:38
these as investments okay so someone

31:41
comes to you and says hey owen

31:43
should i invest in bitcoin or blockchain

31:46
tell me your answer block i would

31:49
recommend people invest in companies

31:52
that are advancing and specializing in

31:54
blockchain

31:55
management and the natural organization

31:58
of their business of which there are

31:59
many

32:00
large companies who are really investing

32:03
heavily

32:03
in blockchain that is a technology that

32:06
is not going away

32:09
to answer your question for bitcoin i

32:11
can't be very specific because

32:12
everyone's different but it

32:14
i'll answer it like anything else any

32:16
asset and go from 419 to 60 000

32:20
and back to 36 000. and

32:25
if you it's a it's a very speculative

32:29
investment that you could lose your

32:31
money

32:32
very quickly and that's not yeah owen's

32:34
a pro he's a pro

32:35
at uh at risk management you know

32:38
spotting

32:38
you know spotting trends i mean that's

32:40
what he does the reason he's doing it

32:41
for so long has such a huge client base

32:43
um but i'm assuming there's companies

32:47
out there that are embracing the

32:49
blockchain technology and trying to make

32:51
that

32:52
honest a switch but can you know

32:54
changing their business model and then

32:56
there's some companies that are ignoring

32:58
it

32:58
correct their their their companies that

33:01
all of your listeners probably know

33:03
who are specializing now in setting up

33:06
giant divisions

33:07
to consult and develop blockchain

33:12
cons business as a consultant for for

33:15
everything from shipping to railroads

33:19
to computers to healthcare

33:23
and i'm assuming you i mean you're doing

33:24
your due diligence and your team's doing

33:26
the the the research

33:28
on this so that your clients can be

33:30
positioned for this

33:32
move that no one can can time

33:35
but it's eventual correct that is

33:37
correct

33:38
it is eventual in my opinion yeah which

33:41
which you know that's the reason

33:43
it's not a cliche when people say

33:46
true investing is long-term a lot of the

33:48
traders

33:50
and the bitcoin traders and all that

33:51
they get a lot of um

33:53
publicity because it's it's sexy and

33:55
it's and it's good

33:56
fodder for the news organizations but

33:58
approaching it from a standpoint of you

34:00
know my clients

34:02
that are looking at non-annuity

34:04
investments and non-annuity

34:05
opportunities i'm hoping that this has

34:09
opened some eyes to

34:10
at least people digging in maybe going

34:12
to your site and signing up for your

34:15
your alerts and your information

34:17
to to understand better blockchain and

34:20
obviously

34:21
having someone like yourself you know

34:23
get in the weeds and get in the mud for

34:25
them to to find out what's the

34:27
opportunity

34:28
you know and what's what's not the

34:29
opportunity but

34:32
my fear with all of this from the

34:33
standpoint of

34:35
i don't know if it's the words fear i'm

34:38
not a pro-government guy you're not

34:39
either but government is essential at

34:41
some levels

34:42
but if there was ever a case

34:45
where i would might lean toward

34:47
pro-government a little bit

34:49
is in the overall regulation of

34:51
cryptocurrency

34:52
blockchain as you said doesn't need to

34:54
be regulated because it's

34:55
self-regulating

34:56
right that's correct it's a technology

34:58
it's not a trading

35:00
right it regulates itself it's a

35:02
technology

35:03
but the the cryptocurrency side

35:07
whether it's bitcoin or whatever you

35:08
want to name it whatever the government

35:10
names theirs if they do something like

35:11
that

35:12
that's my that's the fear and i don't

35:15
know what the time frame is

35:16
for that give me some insight on what

35:19
you're seeing and what you're hearing

35:20
from

35:21
from your connections on how fast we're

35:24
going toward a

35:25
a moment in time where the regular

35:28
investor will feel

35:29
comfortable to at least dip their toes

35:31
in i'm not talking about traders i'm

35:32
talking about real people

35:34
my clients a big national firm just said

35:37
they're going to start offering

35:38
uh goldman sachs several jp morgan

35:41
several of the big banks are going to

35:42
start

35:43
offering cryptocurrency as their

35:46
as a product offering might and

35:49
something

35:50
some people say well that validates it

35:52
what i think it does

35:53
those companies have risk management

35:55
procedures in place

35:57
right so the more they get involved

36:01
the more it becomes regulated is not the

36:05
right word but

36:06
rules of engagement they're not going to

36:09
base case in point one of the things

36:12
cryptocurrency is used for

36:13
unfortunately is moving money for

36:15
terrorists

36:16
and drugs all these banks that are now

36:20
get involved have strict money

36:21
laundering procedures

36:23
so what's going to happen is remember

36:26
what the sec chairman said direct

36:28
and indirect regulation direct

36:30
regulation

36:31
saying it's got to go through the

36:32
government indirect regulation says

36:34
we're going to make sure the banks that

36:35
deal with it have to play by the rules

36:37
and if they don't we're going to find

36:38
the heck out of them or shut them down

36:40
or shut them down

36:41
laundering they'll put in jail right so

36:44
yeah the inter i i have more faith in

36:47
the indirect than i do the direction

36:49
indirect you know having been you know

36:52
where you're at now i mean the

36:53
compliance is

36:54
is suffocating and that's a good thing

36:56
if you're a consumer it's a bad thing if

36:58
you're getting suffocated and having to

36:59
do all these things to

37:00
to business but um

37:04
that's interesting it's not like goldman

37:06
sachs and jp morgan's validating

37:09
the category they're not no because

37:12
they're just not what they're doing and

37:15
you're you're saying is

37:16
they're applying the rules and

37:19
regulations in place

37:20
toward the cryptocurrencies now that

37:23
they're involved that's never been

37:24
applied and once they're applied

37:27
things will get cleaned up correct that

37:29
is correct

37:31
that is correct there's no way the world

37:34
is going to allow

37:36
this this financial network of

37:39
cryptocurrency to continue to fund

37:41
terror terrorism in particular i mean

37:44
you've seen some high-profile

37:45
um today the big the deal

37:48
i forget which country it is in africa

37:50
they kidnap all the school kids and they

37:52
demand payment cryptocurrency

37:54
right right and that's going to stop

37:57
that's just going to stop well and i

37:59
read one the other day where there's

38:01
i think a south korean businessman had

38:03
multiple millions of

38:05
dollars encrypt made a bunch in

38:06
cryptocurrency and obviously got

38:08
noticed in the papers and things like

38:10
that next thing you know next day

38:12
organized crime people in his in his

38:14
home have guns to his head and

38:16
you know puts a computer in front of him

38:18
and say hey that's fantastic could you

38:20
you know please wired it off he had to

38:22
wire it all or else

38:23
he dies what you're saying is

38:27
that's the that's getting ready to be

38:30
wiped out sooner than later because real

38:32
players are getting involved

38:34
you and i both know when the greatest

38:37
way to normalcy

38:38
is to when you when something becomes

38:41
standard uses

38:42
rules will start applying that apply to

38:45
ordinary

38:46
business and financial transactions so

38:49
that's why i believe indirect regulation

38:51
if cryptocurrency is to survive

38:54
and is to be used worldwide on a routine

38:57
basis

38:58
it will be indirect regulation that

39:00
makes it a

39:01
a more acceptable financial asset class

39:05
it sounds like to me that the blockchain

39:08
technology

39:10
um is legit it's here to stay

39:13
and and it's solid

39:16
it is is cryptocurrency that uses

39:20
blockchain

39:20
that couldn't exist without blockchain

39:22
correct is that the only application

39:25
using blockchain that needs to be reeled

39:29
in and is kind of the wild wild west i

39:30
would assume so just because it's money

39:32
am i right

39:33
that is correct blockchain bitcoin

39:37
is the most famous application

39:40
um it is captured as you said the two

39:44
to it has captured the public's

39:46
fascination right

39:47
or ordinary and mundane things we talked

39:50
about

39:50
annuities but insurance companies right

39:53
now are

39:54
working with the blockchain

39:56
significantly

39:57
for claims processing

40:00
makes total sense or or in the annuity

40:03
world or life insurance world

40:05
blockchain would help with listed

40:06
beneficiaries of the policy

40:09
yeah etc all of the the continuation

40:12
and and i yeah if i'm in the in

40:14
government and i'm not

40:16
i should run for senate owen but that's

40:17
a whole nother story

40:20
but i mean the government wants a part

40:23
of this and they want blockchain

40:25
to to reel in the technology and the

40:28
protocols with the real players to reel

40:29
in crypto

40:31
because boy from a taxation standpoint

40:34
black market's going to be tough it's

40:35
going to be straight barter at that

40:37
point you're not going to be able to

40:38
exchange

40:40
i guess you could sustain old dollar

40:42
bills but crypto no

40:44
right wouldn't this be like a tax i mean

40:47
for

40:48
for the irs this is i mean they're

40:49
they're running up and down the hall

40:51
with uh with blockchain t-shirts on

40:53
right

40:54
right the irs is still trying the irs by

40:56
the way is

40:57
because of the pandemic and people the

40:59
irs is still trying to process two years

41:01
of tax claims they haven't even started

41:03
thinking about blockchain yet

41:04
unfortunately the irs is backed up a bit

41:07
right now

41:08
but there are starting to issue to my

41:11
understanding some rules

41:13
uh as they understand cryptocurrency

41:16
and they're honors and they're

41:18
complicated and i tried to look through

41:20
some of them

41:21
and it's it's being made as we speak

41:25
oh my gosh i just had a i mean i just

41:27
had a brain aneurysm

41:29
no offense to people who had brain

41:30
aneurysms um

41:33
capital gains on bitcoin how

41:36
what i mean this is irs i mean

41:39
tell me about that the rules are still

41:42
being written and i'm going to be very

41:44
honest with the readers i don't

41:45
understand them as they're being written

41:47
right and we're not tax lawyers and we

41:48
don't give

41:49
tax advice but i mean i can see

41:52
the messiness of that but i do think the

41:54
end winner

41:55
will be the irs and the government's

41:58
plural

41:59
because of countries you know collecting

42:02
taxes because

42:03
it's going to be an efficient way to

42:04
collect taxes correct

42:06
correct and correct so

42:10
it's amazing to me in typical government

42:12
irs form that

42:14
they're trying to process tax forms

42:16
which really they should be focusing on

42:18
on this but i guess they're going to be

42:19
the winner anyway so they're saying well

42:21
we'll just let everyone else figure it

42:22
out

42:23
because at the end of the day i can

42:24
they're going to they're going to get

42:25
more money and more tax revenue because

42:27
you're not going to be able to hide it

42:29
and in the future if we do go to a

42:31
cryptocurrency

42:34
basis then taxes would be paid

42:38
immediately from your account

42:41
exactly and i want to be fair i i never

42:45
thought i'd be in a position to defend

42:46
the irs but here they've had a tough go

42:48
with it because if you think

42:49
came out with ppp they've come out with

42:52
all this employee assistance

42:53
how are people being they don't they

42:55
don't even have the rules from congress

42:57
on how they're going to

42:58
treat unemployment benefits or

43:01
forgiveness of ppp loans and they're all

43:04
trying to work from home because they

43:05
can't go into their offices it's a

43:07
nightmare

43:07
they're working around the clock to

43:09
process things i want to totally agree

43:11
with that i had a um

43:13
there's a situation in the annuity world

43:14
where where vanguard got out of the

43:15
annuity business and transamerica

43:18
took over all the administrative and

43:19
there i mean it's not transamerica's

43:22
fault i mean they got hit with a perfect

43:23
storm of

43:24
of covid and no one in the centralized

43:26
office it's the same thing with the irs

43:28
i totally agree with that

43:30
but they're going to be the winners and

43:31
i do i do think that

43:33
the government's plural and let's just

43:36
talk about our government

43:38
they might not have they might have

43:40
pooh-poohed this early but

43:41
if they thinking broadly this is a win

43:44
this is a win because

43:46
and that's what scares people too oh and

43:48
what scares them is

43:49
the government getting involved and and

43:52
just kind of the big brother thing

43:54
but what you're really saying is

43:56
blockchain's here to stay you might want

43:58
to

43:58
at least accept it and at a minimum look

44:01
at it as a

44:02
as a as an alternative thought from an

44:05
investment standpoint right

44:06
well i'm saying blockchain has to be

44:08
distinguished and differentiated from

44:10
bitcoin and

44:11
cryptocurrency uh blockchain is the

44:14
internet um internet gambling

44:19
is not the internet

44:22
and dual and i was going to say some

44:25
other things that you can get on the

44:26
internet right

44:27
that's not the internet internet is the

44:30
pipes and tubes that bring it all into

44:31
your homes

44:32
what you put on the internet is

44:34
different correct

44:36
blockchain is the internet bitcoin is

44:38
the application

44:39
running on blockchain

44:43
interesting what we're going to do with

44:45
owen and he's going to be on a lot with

44:47
us

44:47
is we're going to take topics like this

44:49
because we didn't really talk about

44:50
markets and interest rates and

44:52
and all the stuff that people call about

44:55
but i thought this was a good way to

44:56
to get involved with owen because

44:59
i wanted you to see how he thinks and

45:02
how he thinks from a 30 000 foot view

45:04
and then he can take the plane down and

45:05
get low and and and go into the weeds

45:07
and think

45:08
think details but um this has been

45:11
fascinating as i told you

45:13
you know when i was driving the car and

45:14
i said we have to do this

45:16
um and and you're really the impetus for

45:18
for guests

45:19
going to start coming on this podcast

45:21
fun with annuities but boy

45:23
there's a filtering system you got to be

45:24
really really good and i think the

45:26
listeners can agree that

45:27
that uh you know owen's got some talent

45:29
here and he knows what he's talking

45:31
about

45:32
um but he is a dear friend and and um

45:35
that's the first and foremost

45:37
you know i've watched his kids grow up

45:38
he's watched my kids grow up

45:40
we watched each other get very very old

45:42
looking even though we both think that

45:44
we're young

45:47
even though we both think we can we can

45:49
shoot free throws better than most

45:50
people

45:50
you still exactly um

45:54
but i just wanted to thank you for for

45:56
being on um like i said to the listeners

45:58
earlier um

46:00
i'll have all his information on um

46:04
you know on the site uh you can go there

46:07
you can contact him and he's just like

46:09
me he's not gonna go into some sales

46:10
pitch

46:11
nonsense you know we we listen we we

46:14
see if it fits um we'll tell you the

46:16
truth brutally i think the older we get

46:18
i think you can agree on the older we

46:20
get

46:20
we just we just go to the truth first

46:24
we don't beat around the bush and i

46:25
think most of my listeners and clients

46:27
like that about kind of my approach and

46:29
that's the reason you're on with me

46:30
so um i'm going to let you go back and

46:33
do your blockchain research

46:35
mr shrum again let's one more time it's

46:38
s c

46:38
h r u m p

46:44
i enjoyed it i realized from private

46:47
wealth management this will not be the

46:49
last time you hear owen's silky smooth

46:51
southern voice

46:53
but thanks for being here and thanks

46:54
everybody for joining me

46:56
on the number one annuity podcast on the

46:59
planet and it just happens to be called

47:01
fun with annuities where our saying is

47:03
live in the reality not the dream

47:11
thanks for listening to fun with

47:13
annuities please hit the subscribe

47:14
button and make sure to go to my site

47:17
at the annuityman.com where you can run

47:20
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47:20
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47:23
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47:24
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47:26
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47:27
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47:30
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47:31
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47:33
manual books and i'll ship them for free

47:35
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47:38
you to schedule a one-on-one call with

47:40
me

47:41
stan the annuity man so we can have a

47:43
full discussion

47:44
of your specific situation it will be

47:47
the best

47:48
brutally factual and truthful advice you

47:51
will ever get

47:52
and that's one guarantee you should

47:53
definitely take advantage of

47:55
so join me next time for the number one

47:57
annuity podcast

47:58
on the planet fun with annuities

48:06
[Music]

48:15
you