The Behavioral Corner 

Hi, and welcome. I'm Steve Martorano. And this is the Behavioral Corner, you're invited to hang with us as we discuss the ways we live today, the choices we make, the things we do, and how they affect our health and well-being. So you're on the Corner, the Behavioral Corner, please hang around a while.

Steve Martorano 

Hey guys, here we are, we're back on the Behavioral Corner. My name is Steve Martorano and I hope you'll hang with us. What the heck, its half nice day where I am. and I hope it's okay by you. We're going to talk about, you know, what we do here on the behavioral corners try to focus in on areas of, of life that we we all share in common, and that have a profound effect on our you know, behavioral health, the way we feel spiritually, emotionally, physically, which is a big topic. So we're going to talk about finances. But from a unique perspective, we're going to take your kind of long 1000 yard look at cryptocurrency in general, but specifically Bitcoin because if you thought money and your finances were nuts before cryptocurrency, and you're trying to catch up on the learning curve about this thing, where you're like me going, Oh my god, I don't know what this stuff is, what are bitcoins? So what we do is we go find ourselves somebody that knows a lot more than we do about it. And we think we've done that the person of Jason DiLuzio. Jason is born and raised in Philadelphia. So he's a native son as far as we're concerned. And he's lived in Philadelphia. He's moved since but he was there for a very long time, he operated ATM business. He also co founded something called Bitcoin Philadelphia, which you probably not operate now. But it was a sort of a study group rug, gathering of like minded people who wanted to know more about cryptocurrency and Bitcoin in particular. And they used to gather at a train station in Philadelphia, the train station to learn to discuss about Bitcoin. He's a longtime adviser to a company called Liberty X. They are America's largest network of locations where you can actually buy bitcoins instantly with your debit card or cash. And he, as I said, he is going to give us chapter and verse on on Bitcoin. Jason, thanks so much for hanging with us on the Corner. 

Jason DiLuzio 

My pleasure, Steve.

Steve Martorano 

Can you lend me a couple bitcoins to my brother straightens out?

Jason DiLuzio 

That's the first rule about Bitcoin is don't let go your Bitcoin not your keys, not your coins, don't, don't lend them out, don't let anybody else hold them on your behalf. They're a bearer asset, you want to keep a tight grip on them

Steve Martorano 

So the beauty of bitcoins is that nobody actually can hold Anyway, what is a Bitcoin?

Jason DiLuzio 

It is a way of transferring value from one person to another, that is uncensorable, unconfiscatable, and also can't be can't be stopped, essentially, which falls into uncensorable. And then, you know, and it's also a currency that can't be devalued arbitrarily by anyone. Really.

Steve Martorano 

So bitcoins money, so would you say, Well, yeah,

Jason DiLuzio 

Yeah, it is. It's a form of money. It's a new form of money that we're, you know, still trying to wrap our heads around, but...

Steve Martorano 

It is a new form of money? That's what's interesting about this. First of all, how old is Bitcoin?

Jason DiLuzio 

It was born 2009. January 3, 2009, was the first block was mined.

Steve Martorano 

And these things sprang up as a result of the financial crisis of 2008. Is that what happened?

Jason DiLuzio 

Yeah, the the founder of this person or group of people that go by the name, Satoshi Nakamoto. He was pretty active in the groups. And he -- the first Bitcoin block that was published at reference to a headline in the Financial Times of England, and it said, a Chancellor on Brink of Second Bailout for Banks, so and then it had the date. And so that was a way that he could kind of fix Bitcoin in time, you know, how you take a photo of a newspaper or something like that. But also it was a statement that, you know, he was fed up with the how the state was handling money, how this how the states have been handling money, and how they're bailing out their friends and the, you know, the common person kind of gets the shaft.

Steve Martorano 

And the bill.

Jason DiLuzio 

Yeah, and the bill.

Steve Martorano 

So this is a technology that creates something that heretofore did not exist, forget about what it is. And it was a result of this, you say this mysterious Nakamoto guy. So the myths and stories around him are amazing. They're right out Hollywood, frankly. He disappeared now, which is an interesting way to describe a guy who never appeared the first place and suddenly is now gone. Do you believe in to be one person? Or just I'm sure it doesn't matter. But I'm just curious, do you think he's a one guy?

Jason DiLuzio 

I feel like it's one person. I have that feeling. But I wouldn't be surprised if it was a group of people. But you know, the more people that know, I would be, for those people to have kept the secret this long makes me the further we go on, the less likely I believe that there are multiple people involved, because you think it would come to light.

Steve Martorano 

Well, yeah, it's just extraordinary. I don't want to get too far off path here. But the idea that one person has an idea that no one else seem to have completed, the thought of executes it and becomes this is incredible. Because no matter what, praise and credit, we give a guy like Edison, other people were working on this stuff that Edison ultimately perfected. The idea that somebody wakes up and goes, I pissed off today, lost all this money, my money, your money, I didn't have anything to do with this. Now they're going to ask us to bail them out. I'm going to do this. 

Jason DiLuzio 

And what he had done is he had actually, you know, he had taken a bunch of different technologies that already existed and kind of cobbled them together,

Steve Martorano 

He did have that moment of clarity when he went, you're right. He didn't invent everything did not create a Bitcoin. But he took it all together and went, how can this be used to solve that problem?

Jason DiLuzio 

Yep, yeah. And then it's a problem that had been that people have been trying to solve for 30-40 years now, how to create a digital cash that did not require a trusted third party to mediate whether you know, to prevent counterfeiting and double spending and stuff like that.

Steve Martorano 

So anyway, we don't we don't know who he is or where he went. But do you think he got phenomenally wealthy as a result of this?

Jason DiLuzio 

I feel like you might be dead, or I think that he may have been "burned the coins" were made them unspendable or he could have just destroyed all the keys. So back in the early days, you know, Bitcoin is a story of Laszlo who bought two pizzas for 10,000 Bitcoin. It's the first known real world transaction of Bitcoin for something else. And this guy he has got probably got hundreds of 1000s of bitcoins. So 10,000 Bitcoin was no big deal for him. These early days, I think it's like a $500 million pizza right now. It's like that. But uh...

Steve Martorano 

What was it when he bought two pies for...

Jason DiLuzio 

Twenty bucks. Ten Thousand Bitcoin for 20 bucks is what it was, you know, you can get 10,000 Bitcoin for 20 bucks. It's unbelievable. But the point was, it was valueless. That's what I'm getting at. It was valueless. It didn't, you had to convince people to take it. And one of the ways that you could have increased value, since there's only a fixed supply, there's only going to be 21 million. Satoshi is very important that it was that there was a fair launch that the coins were distributed evenly if one person had it all. You know, what's the point is just like the federal reserve the Federal Reserve's that use the money so Satoshi is gonna be the new federal reserve people gonna say No, thank you. So it's possible that he could have burned the coins destroyed them, though he'd never told anybody that he did I actually call them "Schroedinger Coins," because they both exist, and they don't exist. And if they do exist, if they're still spendable, you know, that would be it would be a bit chaotic for a while if all of a sudden we saw some of Satoshi's coins move. But if they don't exist anymore, they're not spendable Well, all of a sudden those 21 million bitcoins available. Now, there's only the only be they'll be 4 million less or 3 million less. And then there's also the 3 million known Bitcoin that have been confirmed, lost. So you know, we're all of a sudden we're down to like...

Steve Martorano 

I want to get into how they're creating other action creative, but I don't want to leave this for a second. Yes, interesting. So there's no way that this mysterious Nakamoto could have created a cache of bitcoins that sat outside of his work, he creates the Bitcoin and sets the number of 21 million, so that it can be a stable currency. There's no way he could have created 1000 Bitcoins that he pushed over here that had nothing to do with wrestling.

Jason DiLuzio 

No, he absolutely could have done that. Actually satoshis coins are just our best guesses as to what his coins are. Because back in the early days, there was only three or four people mining Bitcoin. So the other people identified themselves as Hey, it wasn't me, those aren't mine. And by default, those are his, you know, his, his last message was like, Hey, I'm done with this. I'll see you guys later I gave the you know, the keys to the repository to the software repository to this guy, Gavin, and he's gone out. It doesn't mean you stop mining, right? He could have still been mining quietly in the background. 

Steve Martorano 

Isn't that destabilizing? I mean, the bitcoins value is predicated on its finite number. Yeah. And that's in volatile, you can go beyond 21 million. But there's some unaccounted for bitcoins floating around out there, the number of which nobody even knows. Well, no, no,

Jason DiLuzio 

No, I'm sorry. I'm sorry. It's the supply cap is known. They're all accounted for within 21 million. They're not on the side. It's just I thought you were talking about specifically if 

Steve Martorano 

Yeah, there's no chance of that?

Jason DiLuzio 

No, no chance. 

Steve Martorano 

Okay. All right, well, I'll take your word for it. However, they in fact, made or created Bitcoin.

Jason DiLuzio 

So Bitcoin are rewarded to individuals we call miners -- Bitcoin miners. And these miners, what they do is they basically they try and solve the Bitcoin network presents a math problem, that's actually a math problem. It's a guessing game. And they say, I'm going to guess a number between one and 1 million. And the first person that guesses that number correctly, I will give you x amount of Bitcoin right now at 6.25 Bitcoin as a reward and the privilege to build a block of transactions, which is just essentially just a batch of transactions that have been submitted for entry into the blockchain. And you'll get that right to submit these transactions and the rewarded and essentially this is this is how Bitcoin is secured. The miners are the guards to make sure individuals can't try and spend the same money twice. The Bitcoin reward - the block reward - incentive to do this because it costs money. Because the way you get this number is by running computers very quickly, and just brute force guessing. So you're just shouting numbers at at the Bitcoin network saying 100,000 100,003, and you just keep guessing, and so count, there's 1000s and 1000s of miners guessing at the same time, until somebody hits it, and then they reward it all over again. And this happens, on average, every 10 minutes. 

Steve Martorano 

We're talking to Jason DiLuzio he knows, obviously a lot about Bitcoin. And he's giving us chapter and verse on what this means I wouldn't really, you know, sort of get it on, you know, get into the ground level here. If I wanted to purchase a Bitcoin, how do I do it?

Jason DiLuzio 

Most any number of ways you can do, you and i, you can mail me a check. And I could send you some Bitcoin, right? I would do that for you because we have a relationship, I don't think you're going to me, that is not the best way to do it in my life. But what I'm getting at is that it's just like you any kind of money exchange, you go to a money changer, you know, before you go on a trip internationally. So one way is you download an app on your phone, one of them I use is called River.com. They'll just take it right on your checking account, and then they'll give you a Bitcoin. Another way to do it is to go to what's called a Bitcoin kiosk of Bitcoin ATM. That's what actually Liberty X. The company I work with, we we actually have regular we have 10,000 ATMs across the country with regular ATM you would see in a normal bar and restaurant. And these are also capable of selling Bitcoin, you would have a Bitcoin wallet. It's like your email account. So you have Gmail. You can choose Gmail, you could choose Yahoo, you could choose AOL as your email provider, it doesn't matter who the provider is, it does not scammers, because these are going to be the custody of your coins for you. And you in their coin address. For example, you will give us your Bitcoin address, we give you a six digit number you go to the ATM you stick your card and pay off and then we send you the Bitcoin.

Steve Martorano 

You know, I hope I'm the only one hearing this you're breaking up a little bit. 

Jason DiLuzio 

Am I? Hold on a second.

Steve Martorano 

Maybe you can move a little bit or get out from under the streetlight the Corner.

Jason DiLuzio 

Better?

Steve Martorano 

I hope so. Okay, so I mean, you keep alluding to this thing is money. As you know, a lot of people in the financial world say no, it's not money. Besides the pizza, give me some real world applications where Bitcoin is a store of value that are used back and forth.

Jason DiLuzio 

So money is actually defined by a couple of things. One of them is store value, one of them is medium of exchange, and the third is unit of account. So you can use any of those three aspects of money and call something money. Right now. It's mostly used as a store of value.

Steve Martorano 

Like gold? 

Jason DiLuzio 

Like gold. Yeah, it's a savings technology. It's a way you know, if you don't trust the government, if you don't trust the Federal Reserve, you feel like they're not being good stewards of the US dollar, then you have a choice and you can exit into a different currency that you might think is better, or different store of value such as gold, some people keep it in, you know, the commodity but copper, and then others now now we have Bitcoin. Bitcoins a good choice. The government's been very successful in kind of neutering the power of gold, through all their kind of market mechanisms where they about people say that the price of gold is artificially suppressed, because then that hides, inflation, which they don't really want, you know, inflation to go out of control. So using it as a store value is one way of using it as money. There are people that actually use it as a currency as a way to spend money in order to get a product. There's a story I know of actually a hair salon owners. Like middle aged women, they're buying hair from India. They buy human hair for their for their shops for their hair shops. Well, you try and send some money to India, it's not easy. It's really, really strict. So what they do is they demand Bitcoin, they say, if you want this hair, you need to send us Bitcoin. So it's a way to kind of get around restrictions that you find.

Steve Martorano 

Yeah, there is a class of people who have recognized that utility, and they are drug dealers, and terrorists. Who more than most would want to end run governments and regulations and identity problems. Is that what Bitcoin is really all about? The way to facilitate bad behavior?

Jason DiLuzio 

It's certainly not what it's about. It's not why it was invented, you know, criminals use cars as well. bank robbers use cars to get away from from the cops. You know, it's unsensible money so the bad guys can use it to transfer value just as much as the good guys. But you know, people do kind of pick on Bitcoin for that. They've done studies, they say that the illicit use of Bitcoin is around. It's like 5% of the volume is, is for illicit stuff...happenings. But you know, what I another response I have is, the US dollar is by far more popular than Bitcoin for illicit activity. It's the preferred currency of bad guys around the world.

Steve Martorano 

Its the reserve currency for the whole world but if Bitcoin threatens that, the future, near future, then it will serve the same purpose that the dollar is serving. Now, I'm not saying it's going to make drug dealing or tourism proliferate, but it's certainly the early adopters were guys like that. It was just perfect.

Jason DiLuzio 

Some of them are out there. Yeah. Yeah. There's some guys that were you know, selling drugs on Silk Road. 

Steve Martorano 

He's in jail now for a long time anyway. Really simply is it? Is this legal? Is Bitcoin legal. 

Jason DiLuzio 

Yes

Steve Martorano 

Okay, it is legal.

Jason DiLuzio 

In the United States it is legal currently. In most countries it's legal. I think, India actually speak the devil was just talking. There's something in the news today about India's going to a third time there, they're talking about banning Bitcoin.

Steve Martorano 

Didn't China try to I wouldn't say nationalized but set up a a cryptocurrency exchange or bank or something that would make it more traditional in terms of being controllable by Central authorities. They did that, didn't they? And then they abandoned it?

Jason DiLuzio 

There's this thing out there that some people are calling Central Bank Digital Currencies -- CBDCs. I believe China is actively piloting one and it's, it's essentially just the digital Yuan, but in this digitized version, and it's honestly it's not really it's not a cryptocurrency it's not a it's just a different way of accounting for their existing currency. The US dollar is 95% digital now as it is, it's not the digital aspects of it that's what's interesting. It's how it's accounted for - how the transactions are verified, and the counterfeiting is prevented. 

Steve Martorano 

You know, that's interesting. You say the dollars 90% - 95% digital now. You know, if you don't think about that, you go, that's nonsense. But overwhelmingly, you're right, I make a certain amount of money. It's directly deposited into an account, I pay my bills directly out of the account. I never see that money. The overwhelming majority of the money I have is somewhere else. I don't know. It's an interesting take on it. Jason DiLuzio is our guest. We're trying to learn as much as we can about Bitcoin, not because I'm going to invest in this because I can't afford it. But what is the Bitcoin trading for right now?

Jason DiLuzio 

Today, it's around $55 or $56,000.

Steve Martorano 

Fifty-six thousand. I don't have that lying around. What if I wanted to buy bitcoins? What do I do?

Jason DiLuzio 

You can buy a penny's worth of dollars worth $10 worth whatever you want? They are. They are divisible there. In fact, technically they're infinitely divisible. So the Bitcoin price goes to $50 million a coin. It doesn't matter because there will be you know, lower and lower denominations. Right now the US dollar the smallest denomination is a penny. Well, if all of a sudden the US dollar value went up and this has happened historically, you know, you have to create keep creating smaller denominations, we would have a half penny or a quarter penny or something that represents these smaller values. The unit price of one Bitcoin is pretty irrelevant. It's just kind of a way to keep track of its purchasing power.

Steve Martorano 

So that so I can buy in. But after all, you know, I mean, how small a fraction of something that's valued at 55,000 is going to make any difference in my life. I mean, if somebody came to you and said, Jason, I've got I've got $1,000 lying around. What kind of position in Bitcoin? Will they get me?

Jason DiLuzio 

If they had spent $1,000 on this day, last year, they would have bought 1/3 of a Bitcoin. Okay, Bitcoin was at $3,000 or $4,000, maybe a quarter of a Bitcoin. Now, here we are one year later, and it's it actually touched 60 grand last night.

Steve Martorano 

I mean, I get that but if the Queen had we'll she'd be a taxi cab. I didn't buy it a year ago, I'm asking you -- and I look at a $55,000 price point I go, "Well, what is that going to go to? $100,000? Is it going to go to 200?" Then it would make sense. But some people are saying this is a bubble, and all bubbles burst. This growth in the value of Bitcoin at this rate is it sustainable?

Jason DiLuzio 

Yeah, absolutely. I mean, in a world of unlimited fiat money, there is literally no limit on how expensive Bitcoin can get because the money going into it that it's priced in is infinite.

Steve Martorano 

What bitcoins value go down if governments like the United States government cleared I know, it's hypothetical, cleared up its debt, and started showing a surplus and fixed its roads and bridges and gave everybody universal health care. Would the price of bitcoin collapse?

Jason DiLuzio 

I absolutely think so. Yeah.

Steve Martorano 

Yeah. They said, I know you guys are evangelical about this thing. But it's clear that it is unstable. First of all, nothing stops someone else from creating another cryptocurrency. In fact, there are other cryptocurrencies. Bitcoin, it seems to me has prospered because it was the first in and that's a standard phenomenon. But nothing stops someone. There's another Nakamoto out there. And he's capable of sitting down one day and going, I'm going to knock the blocks out. Does that worry you?

Jason DiLuzio 

No, it doesn't. Not not at all. There isn't ever going to be another Nakamoto. Bitcoin could only be invented once. Everything else is a knock off. It's a copy. It's not an original. We have something we call it the Immaculate Conception in Bitcoin because it was born of innocence. Right? This was just a science project that this guy just created. And it's like, Hey, I don't know if it's gonna work, right and we'll see. And he just throws it out there. And it's just all of a sudden just started vacuuming up value across the world. Now we know it works, right? You see, it works. It's because hey, well, what's gonna stop me from going and making my own currency? Well, I mean, nothing really, you can do it, but people are gonna go, well, who are you? Why am I going to give you my money? Now when I could just go buy this? Like, I'm not going to give you the right of the printing press?

Steve Martorano 

I hear you. Your faith in the supremacy of this -- I understand.

Jason DiLuzio 

We also we have a 10 year, we have a 10 year history right now, 11 years of it not being...

Steve Martorano 

But we're talking about money. We're talking about money, which is a 1000s of years of history and it's changed over the years, I still wonder and I don't know very much about this. So maybe my wonder is ignorance. That what was created in the mind of a very clever person can be created again, even if it's in a form, after all, that you're not thinking about now, because it doesn't exist. Bitcoins didn't exist and then one day they did, I'm saying that there is a potential that someone will create something that surpasses this.

Jason DiLuzio 

The idea that that would happen - like this is a problem that somebody has been working on for 30-40 years to solve. One guy hit a big Is there a nonzero chance of that happening? Yes. But you know, since bitcoins been brought into existence, there have been 1000s of other crypto currencies that are trying to have tried to supplant Bitcoin and none of them have been able to do it. 

Steve Martorano 

There's nothing inherently inferior, technologically or in any other way in those other currencies. It's just they can't grab the share of the market that Bitcoin has. I can create a search engine tomorrow. That's every bit as good as Google. I'm not gonna move Google. I'm just not. 

Jason DiLuzio 

The reason would be you come up with an idea that is like leaps and bounds better than Google, right? You say that, you know, Google has such a strong network effect. And it has a lot of what we call it liquidity, right? Money goes to where the liquidity is. and money is a network effect. So it's really difficult to unseat something that has such a network effect.

Steve Martorano 

Now, I understand. Let me end on this, as you know, and I'm really I'm pushing back to sort of that's what I do here. The other thing that might disrupt this rosy scenario about bitcoins is market manipulation. No matter what it is, if it's a tradable item, and it's a commodity and there's a market that market is susceptible to bad actors. Isn't in true that the overwhelming majority of bitcoins that are held are held by a very small number of people. It is something like 13% of all the bitcoins that have been created belong to just a couple of people, groups anyway?

Jason DiLuzio 

I'm not really sure. I don't think so. I know there is a there is a concentration amongst the early adopters, right? Because you could mine it on your computer, and you would get 50 blocks. I mean, there's people that have 10s of 1000s of Bitcoin. But again, you know, you compare it to what compared to the US dollar, I think we have a big concentration of the US dollar as well amongst wealthy individuals, so yes, are there people that can move markets with their we call them whales, right? Yeah, sure. But you know, that's the way it is, in any market, the people that hold all the chips get to make the rules. So...

Steve Martorano 

True dat but as long as that well, as long as the rules are easily understood by everybody else. I want to leave you with something Mark Cuban said, and you probably are familiar with the quote, Cuban's a pretty sharp guy. I think he holds a bunch of cryptocurrency, probably Bitcoin. But he did say not so long ago, this stuff is not going to ever become the dollar in the sense we've been talking about it until grandma knows how to use it. We're lightyears away from that if ever, don't you think?

Jason DiLuzio 

I think the same thing would have been said about email in like 1995. I don't know about you, but I know a lot of grandmas that are using emails and facetimes and iPadsb and yeah, there's a user interface problem, right. There's a lot of work that still needs to be done. As for whether it's going to supplant the dollar? You know, I don't know, I don't think it's going to necessarily supplant the dollar. But I think when the dollar fails, Bitcoin will be one of the last things standing.

Steve Martorano 

In that regard is a purchase a Bitcoin, a bet against the dollar and in fact, the American way of life?

Jason DiLuzio 

Well, I think the dollar and the American way of life are two completely different things. I think America is an idea, you know, I mean, the Federal Reserve, which...

Steve Martorano 

The idea is the dollar.

Jason DiLuzio 

No, I mean, I think, you know, we have a constitution we have, we have these fundamental ideas that the country was formed around and in 1913, a cabal of bankers formed a private bank and got the exclusive right to issue the US dollar. 

Steve Martorano 

That's the Jekyll Island...

Jason DiLuzio 

That's Jekyll Island. I don't think that anything to do with America. I mean, sure, is how we project our power? Absolutely. But again, I also I don't necessarily think the US government is America. America is made up of its people and its idea. The constitution was made in such a way where we could throw away the government and start over again, when these guys got corrupt and I don't know I think these guys need a little bit of a flushing right now. And...

Steve Martorano 

You'll won't get much of an argument with me on that. I don't know that the but I don't I don't we you and I agree on that fundamentally. I just don't know that Bitcoin is that instrument. But anyway, you have done a world of good here as far as I'm concerned. Trying to get our heads around Bitcoin. We really appreciate your time, Jason DiLuzio. I got to ask you before you go, your family business in Philadelphia was a landscaping. It wasn't that Four Seasons place where they had the press conference?

Jason DiLuzio 

No, no, I was out in Delco. That's funny. 

Steve Martorano 

That's too bad. Thanks, Jason DiLuzio for hanging with us on the Corner and the rest of you as well. Thanks for hanging with us here. You know, don't forget you should look for the -- remember I found the phone booth on the Corner? That phone booth is live,. Call it give any questions, you can just leave a message and we can talk to you about it. Look on Facebook, you'll see what that's all about, and follow us everywhere else. Take care, we're out.

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