Crypto Investing #77 – Crypto Lessons From Early Crypto Investor, “15 Cent Joe”

Tai Zen: Alright this is a Tai Zen again. We’re broadcasting from the Havana Central restaurant bar, it’s a Cuban restaurant, they got some really good food here but this is an investment channel so we’re not here to review food, we’re gonna talk how to make money.

So with me today I got my buddy, David Fong, he’s the one that builds all the tools and the software for us on our channel, help us manage our portfolios and help us trade better and manage risk better.

And then we got with us here a very unique and special individual. And we’re not talking about the special kids that ride the short-half-yellow-bus either, we’re talking about 15 Cent Joe here. Say hello to our audience Mr. 15 Cent Joe.

15 Cent Joe: Hey everybody.

Tai Zen: The reason why I’m calling him “15 Cent Joe” is because I’ve met Cryptocurrency investors who bought Bitcoins…right now as we’re talking, it’s about $4,400 and I’ve met people and David has met people that got into Bitcoins at $4,000, at $3,000, at $1,000, at $500, at $100. But Joe is actually the first person that I’ve met that actually got into Bitcoin when it was only 15 cents.

15 Cent Joe: It fluctuated a lot way before the dollar phase, we’ll put it that way.

Tai Zen: And he was actually miningBitcoins with multiple computers, probably like 5 minutes after Satoshi released the white papers.

15 Cent Joe: Quite a while later, it was the CPU at first, and then I switched over to GPU.

Tai Zen: So the reason why I have Joe on today is that he made some mistakes when he first got into Bitcoin, and I want him to share his mistakes with you so we can all learn from it. Talk about first, how you even heard about Bitcoins or found out about it, because you didn’t get into it because of money?

15 Cent Joe: No not at all, in fact, I was shopping for a new computer and I was on a forum reading a review on a new CPU and someone said this mines Bitcoins really fast, and somebody else said what does that mean? And the guy goes I don’t know.

But some people buy them on these forums online and I bought a faster processor than I needed because I think I’ll get paid back. And of course, I thought this was a fascinating idea that I could pay for the cost of the computer. And at the time you can mine a lot of Bitcoins a day.

Tai Zen: What year was this?

15 Cent Joe: I think it was 2010, maybe a little earlier than that.

Tai Zen: Because the Satoshi released the Bitcoin white paper at the end of 2008, and then in January 2009 is when he started mining it.

15 Cent Joe: It was a bit after that but it went for a long time, basically under the radar.

Tai Zen: When you started mining with your computer, how many Bitcoins were you getting a day?

15 Cent Joe: You had to use mining pools and a lot of it depended on the CPU, how fast it was. But there was almost no arms race back then, it started happening several years ago. And you would all join up on mining pools, but the mining pools had to make sure none of them had more than 51% of the hash.

And they had these websites that have a track how big the pools were and whenever a pool would start to get in the 40s, people would jump to a different pool to maintain equilibrium, so no one would accidentally fork Bitcoin. This all happened years ago and people don’t have any recollection that these things were happening.

Tai Zen: The last time I remember that happening was with a Ghash.io. They started getting around 50% and then the miners started migrating away from it to reduce the percentage there. Now, what was your background at that time when you were doing all this? You must have a computer background or something.

15 Cent Joe: I was just working a 9-to-5 at the time. I think I was working in what they would call a green-collar-job, I’m trying to architectural salvage.

Tai Zen: You said you had several hundred Bitcoins, but then your family got sick or something like that.

15 Cent Joe: I sold everything when Bitcoin hit $7 and 15 cents. I didn’t have thousands because I was selling them as I was mining them because I was doing it to pay for computer hardware, but I just kept reinvesting it in more computer hardware so I was never actually saving any, I was in the arms race. And every time the value would go up a little bit, I would feel emboldened and so I buy a little more hardware.

And then the biggest mistake ever was investing a bunch of money into SHA ASICs many months before they actually shipped them. And so I bought a bunch of butterfly labs hardware, by selling Bitcoin to buy the hardware and it was a lot of Bitcoins to buy these little miners.

And then the difficulty went up, orders of magnitude by the time because as an end-user, we were receiving the very first consumer-grade ASICs right about the same time giant farms were going online. I exited mining many years ago.

Tai Zen: We get clients all the time that asked if mining is profitable and we tell them it’s not.

15 Cent Joe: I know virtually nothing about the economics of it now. I do believe that many of the people that are getting into mining now, you basically have to do it at an industrial scale and a lot of the investment is predicated on the belief, the valuations will go up 2 or 3 more times.

And if you knew that BTC was gonna go to $20,000 in the next 2 years, or you believed it, you’d be much more likely to invest in a bunch of proprietary hardware. Right about when Crypto switched over to FPGAs and ASICs, it’s when I exit the mining game because I don’t have the aptitude or the capital to compete.

Tai Zen: Did you still invest in other altcoins and stuff?

15 Cent Joe: I just basically became someone who kept an eye on the space and just tried to selectively invest in projects that I thought made sense, which was difficult to know because you had 3 different places only. You had to go to BTC talk and that was it, there’s nowhere else to go.

Tai Zen: So you’re an early investor since 2010 and I know you would say that you were just investing in it to buy computer hardware.

15 Cent Joe: I didn’t have the epiphany of what blockchain could actually do. I didn’t get that until much later after I’ve been exposed to it for a while.

Tai Zen: So you started back in early 2010, and then what and then what happened? Did you keep going in 2011, 2012?

15 Cent Joe: I just got more interested because I was always selling whatever I was mining and I was never really keeping any. And their valuations were not really going up, but I became more interested and I started reading up more projects. And this is right when this mushroom effect of all these new currencies, Peercoinsshows up, Litecoin shows up, Namecoin.

Tai Zen: When did you think about all that? Because I entered the market after all that came out.

15 Cent Joe: It’s really hard to describe because initially, everyone was just trying to copy Bitcoin, then there was the altcoin generator website, here you could actually input all the statues on and it would just send you the genesis BlockScript to run. And those websites probably still exist and it became a joke because so many people were cloning Bitcoin, changing almost nothing and then launching it as some new token.

So it kind of became a joke and it actually caused me to become very cynical when so many were coming out and the then larger legitimate project started showing up and it was very difficult to differentiate from them. So when Ethereum came out, I wasn’t even interested in mining it or investing in it or anything, I just I was like it’s another one.

And so I was already jaded, I would call Ethereum a third-tier project. That was the entry point for so many people and what Ethereum did that kind of balloon effect, I think those are people that were the pivotal in the springboard forward that’s happening now.

Tai Zen: That was like one of the big leaps forward for our entire team when Ethereum came out and it really helped quantum leap… We made good money from Bitcoin before then, but that really quantum-leaped us forward to be able to diversify our resources a lot. So would you say you kind of jaded back then? Did you stop investing in Cryptocurrency?

15 Cent Joe: I never started because I had sold everything I had mine up until that point either to live on or whatever crisis happens. I never had a tremendous amount of capital so when the larger project started showing up like Ethereum, I was skeptical of it but I still thought I would invest in it but I didn’t have much.

A lot of people went through these phases where you would have this Crypto burnout, you make enough money that you want to quit your day job, you just stare at charts for 16 hours a day and at the end of the month you’re like I made $500 here, I lost $1,000 there, I made $3,000 here, I lost $50 there. And you’re like this is not good, those were some dog days back then, and now as the world is beginning to understand, it seems like there’s a lot of larger investment coming into space because blockchain can solve a lot of problems.

Tai Zen: So now you are back into the swing of things. When did you get back into full swing into it now?

15 Cent Joe: I would say that I probably got into the full swing when I saw the value proposition that the Particl developers were showing up with. Because the backdrop of me being a hobbyist and then an activist blockchain proponent was that I was doing online sales through eBay, Amazon and also private websites.

Tai Zen: So basically you an online vendor and you saw that this thing coming out about the private marketplace that created by the Particl cryptocurrency project, and so that got your interest to step back into the Cryptocurrency.

15 Cent Joe: I had been participating in several projects up to the time, and there were actually a few projects that we’re talking about doing things like trading post or marketplaces, that kind of thing.

However, I felt that what Particl was attempting to do, solved my problems outside of Crypto as an online seller but then also appealed to my desire to see some of the positive change I think the blockchain can bring.

Tai Zen: What would you say is the top 3 favorite cryptos that you would like to share with our audience besides Particl?

15 Cent Joe: I’ve always been a fan VTC (Vertcoin) just because I’ve always appreciated projects that had a very simple and narrow vision. Script and SHA mining became industrial. And the idea was to achieve a broader acceptance inside of the entire community, more people as individuals need to be engaged and so there’s almost Algorithm war between all these different hashing algorithms, trying to all figure out how to strike a balance to try to keep the most people engaged.

Tai Zen: So besides Particl and Vertcoin, what’s the third one that you really like?

15 Cent Joe: I’ve never thought about it this way. I’m obviously very strong on Particl. I’m interested to see what EOS does.

Tai Zen: We like that project too but the valuation is just so high, 200 million.

15 Cent Joe: It was a pretty brilliant execution on trying to secure a pile of funding and then protect it by locking inconsistent funding, it’s gonna be interesting to see. It’s the kind of valuation that could produce technology that changes a lot of things.

Tai Zen: I do not invest in it simply because at this moment, I have not invested in it simply because in the real world, if you have a product or a service and you go to a venture capital firm, they’re not gonna give you 200 million dollars, they’re gonna give you a million, go build a prototype and let’s see if it works first before we pour more money into it. There’s no venture capital firm up that’s gonna give you 200 million dollars.

15 Cent Joe: I’m interested to see what happens with SALT Lending. Any time a project makes any attempt at a real-world adoption, specifically flexing some of the strengths of cryptocurrency as a unit of value or just takes advantage of the check-pointing and the security that it provides. I always get really excited about it but it’s hard for me to keep up.

Tai Zen: Do you have any lessons that you want to share with some of the new investors that are coming into cryptocurrency and 2017 now?

15 Cent Joe: Take it from somebody that that has participated in a lot of different projects and has at some point or another, held a lot of tokens from various projects, almost all of which didn’t really hit their stride until long after I needed to sell them to pay bills. It’s one of those things whereby not understanding the art of investing properly, I’ve absolutely sabotaged myself probably a dozen times.

And I’ve had people give me advice and always sell a little but never sell all, I’ve heard that. What I’ve also noticed is that lots of small teams they go all-in on something because they’re consumed by it, I’ve participated in this as well. And then what happens is because everyone’s investors are holders, and they get emotionally attached, and what happens is that sometimes it actually does a disservice to the project itself.

And so if you’re very supportive of a little project, and this means you have no other assets to support it with. And so what happens is that you become overextended on a single asset, you’ll have no Fiat or Bitcoin in reserve.

Tai Zen: Just like a lot of the Bitcoin maximalist out there now, they only believe in Bitcoin.

15 Cent Joe: I understand it up to a point because it’s just been performing so well and I think it’s gonna continue to just because it has a lot of inertia behind it, but you’re gonna get overextended.

So let’s use Bitcoin for example, if you have nothing but Bitcoin and no Fiat, if Bitcoin goes to one-third its value today, you should be buying it. But you can’t because you’re 100% in. And I don’t know if I can follow this advice on my own because I seem to be emotionally attached.

Tai Zen: I’ve been in situations before where I needed the money to pay bills and stuff. So I was forced to have to liquidate my positions and sell more than what I wanted to. If I had to go back in history, I might hold my Ethers for a little bit longer.

15 Cent Joe: It’s one of those things where I think that new people coming into it, I don’t think they should feel defeated or they’ve missed anything. People coming in 2017, 2018 Q1, you haven’t missed anything.

Because I view the majority of what the blockchain space is going to bring hasn’t even been thought of yet or theorized yet. And I think it’s gonna just continue amplifying it.

Tai Zen: We’re still early. Now the market cap is 145 billion as we’re speaking and our team has a firm belief that it’s going to over a trillion-dollar, that’s about 9x from here.

15 Cent Joe: I literally don’t know how that’s not inevitable at this point, just because all it’s gonna take is the first 1 or 2 true killer applications that have broad global applicable appeal. It could be anything.

Tai Zen: I think it’s gonna be something as simple as just a cryptocurrency that actually works, it works as electronic cash like it was meant to be, something that’s simple and private.

15 Cent Joe: If enough people accept it, enough people spend it then absolutely.

Tai Zen: Well I appreciate you coming on down here and meeting up with us here in New York City. And they just caught the light so that’s unconsciously giving a signal that it’s time to go, so let’s wrap it up here.

If you like these type of videos and the interviews that we do with people that are in the game and not just people that just talk about it, but people that are actually in the heat of the battle, in the fields, in the trenches and then you want to learn from them.

Subscribe to us at www.cryptocurrency.market/newsletter and we’ll get you more videos like this. And until then, we’ll see you in the next video. So thanks for joining me today.

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