Cryptocurrency, Elon Musk, and More - My 60 Tough Questions about Bitcoin, Ether, Inflation, Taxes - Tim Draper - Interviews of Notables & Influencers by Joanne Z. Tan (2024)

To stay in the loop on cryptocurrency and other great topics, subscribe to our Newsletter

#10PlusInterviews #InterviewsofNotablesandInfluencers

I will be interviewing Tim Draper on my next podcast series “Interviews of the Notables and Influencers”, about bitcoin, Elon Musk, inflation, cryptocurrency, and more.

Tim Draper is a billionaire and Silicon Valley luminary who invested about $20 million in bitcoin in 2014. He is an unwavering believer in cryptocurrency through thick and thin.

My next blog post and Newsletter in early June 2021 will feature the entire interview.

In this blog, I’m sharing with you why I am going to ask Tim Draper about cryptocurrency, blockchain, inflation, the economy, and a few of the 60 questions I will be asking.

My own cryptocurrency journey (so far)

My 21-year-old son was buying small amounts of DogeCoin, BitCoin and Ether, and sold some.

He was only 6 years old when the real estate investment frenzy cast a spell over many Americans, until the bubble burst in 2008, and he was completely unaware of that time period.

So many people, including professional financial advisors, lost so much money and their homes after their real estate investment failed. It took many of them 10 years to recover, and to subsequently remove the bankruptcy stain from their credit reports.

I’ve been seeing the same temptations, and almost gambler-like mentality on the part of not only the innocent, idealistic, and gullible, but also the highly-seasoned, well-educated, even-keeled adults from all walks of life, over the past few years of the crypto ups and downs.

I tried to dissuade my son from putting any more money into this “crypto fever”, but to no avail.

Then I started to learn more about it myself.

Why I decided to own One Ether Coin

So, I asked for opinions about investing in crypto from a friend of mine, who is one of the world’s best and most disciplined commodity traders, while reading about crypto myself. This friend said that even though “it’s super risky”, he owns Ether, Bitcoin and a NFT. He advised not to put much money into it and cautioned about paying tax retroactively.

After many rounds of questions and answers with him over a couple of weeks, I confessed that the “fear of missing out” was pushing me hard to cross the threshold, but I was still not game.

An accomplished artist, who is also a rational, disciplined man devoted to his ascending art career as well as to his family of four small children, was talking on Clubhouse about NFT. I joined the conversation and learned that for any artist to use NFT for publicity and sale of art, the only way is by using Ether tokens.

I aspire to “mint” some of my paintings and drawings as NFTs, someday. So I bought one Ether, for $3,532.61 on May 6, 2021, on the grounds that it has the capacity to have various smart contracts for different apps, and it is the only required crypto for NFT fees, as of May 6, 2021.

New Kid on the Block – ICT (internet Computer token)

Three days later, on May 9, 2021, ICT had a $45 billion debut and became an overnight sensation. It is said to be faster than Ethereum with better technology that can bypass Google and AWS, and even has the potential to protect owners’ privacy.

Wait a minute: Privacy and traceability are at odds with each other: The “beauty” of cryptocurrency is traceability thanks to blockchain; now if crypto’s chain of ownership is no longer traceable by this added “privacy”, what differentiates it from the green backs?

Traceability for cryptocurrency is one of the values upon which trust for crypto is built. The US dollars and all other currencies issued by governments do not yet have this blockchain-enabled transparency for money’s source and originality.

More contradictions or confusion about how some digital tokens are deviating from the crypto DNA

Another crypto value is based on scarcity – there are limited supplies of bitcoin, for example.

However, DogeCoin operates to the total contrary since it is produced without limits. Why is Elon Musk buying it, endorsing it, and accepting it for the Moon Mission?

Now, if traceability and scarcity are taken away from crypto, are there any other unique value propositions of crypto that will differentiate it from US dollars?

I seem to hear crypto fans say: “Decentralized.”

I don’t think solely being decentralized per se creates more value and trust than centralized traditional currencies. There have to be more “character traits” or unique value propositions, such as traceability and scarcity, associated exclusively with crypto, in order for it to compete with or supplement traditional currencies.

Even more bizarre, is the latest (as of May 13, 2021) from Bloomberg News, that the group formerly known as Libra is moving operations to the U.S. and plans to issue a dollar-backed StableCoin.

I’m confused: I thought cryptocurrency is DIFFERENT from traditional currencies like US dollars, why do we need a dollar-backed cryptocurrency? Just to bypass the banks?

But then, isn’t all the crypto coins’ monetary value based on the US dollar value, anyway?

Is the best cryptocurrency yet to come?

If it is true that ICT, the new kid on the block, outperforms Ether and all other coins measured by performance and sustainability, most likely ICT will NOT have the last say. Technology evolves so fast, there will be newer and better crypto coins up and coming. Does it mean that those who jumped in with both feet too early may actually have less advantage than those who wait for newer and better technologies? And better coins?

Fear and greed in this cryptocurrency “jungle” and the crypto unknown “wild west”

As many as 61% of people who had heard of the coins said they had little or no understanding of how they work. (Bloomberg News.)

Many of them are driven by fear of losing out, missing the boat, and inflation…

Is inflation more speculated and feared, than actual?

Assuming inflation will be actual, is cryptocurrency a safe haven for preserving cash from devaluation?

The herd of millions of blind followers are driven with greed and speculative fever. They listen to every word of Elon Musk. These blind sheep recently got whiplashed by Musk’s yo-yo between endorsing and buying Bitcoin to suspending it in Tesla transactions. Musk advocated for DogeCoin, then called it a “hustle”, but the next day he accepted it for SpaceX’s Moon mission…

Exploring the unknown world of cryptocurrency or Mars is adventurous and exciting, but I am glad that Elon Musk has come to terms with the cost to THIS blue planet by unsustainable energy use for mining Bitcoins. I hope he is not going to burn too much money and raise false hope for the human race’s migration to Mars, before it is too late to use all our limited resources to save our one and only home planet.

The best case scenario: Let Billionaires Eliminate the Crypto Losers

The overt and covert fights for crypto dominance among the billionaires and zillionaires with their respective backing of different coins will wipe out many meme coins and other crypto coins, in my personal opinion. The best case scenario: when the dust settles, there will be just half a dozen types of coins left. This can be good news for investors late to the game whose wallets are not nearly as deep, hence with less to gamble with, and proportionately less to lose.

But there is also the possibility of the worst case scenario:

Back taxes for ALL Coin Holders Can Be Devastating – Caveat Emptor

Benjamin Franklin famously said: ”… but, in this world, nothing is certain except death and taxes.”

The traceability of crypto will enable Uncle Sam to retroactively tax everyone who has ever owned crypto. That means, you could have spent $1,000 on crypto and ended up owing 10 times, or even more back taxes!

Suppose that you bought $1,000 of DogeCoin and sold it for $150,000 this year, and you did not pay any tax on capital gains or property tax which is about 40-50% of $150,000. The IRS and State Tax collectors can come after you in a few years and now you owe 100% due to penalties and fees. But if you put the $150,000 into some other crypto and lost it all, even though you made $0, you are still responsible for paying a $150,000 tax bill.

The IRS can go back 7 years or MORE. Crypto Coin-holders will be taxed retroactively. Anything over $1000 will be subject to taxes.

The biggest threat to crypto: Will The Governments Tolerate It?

But that is not all: When national governments, the US government included, view crypto as a serious threat to their power to control their own currencies, to tax, and to control their economies and protect their national security, do you think they will sit on their own hands and do nothing?

As of today, May 13, 2021, the US Justice Department, IRS are investigating Binance, one of the largest crypto exchanges, for money-laundering and tax offense. (Bloomberg News.)

The cloud seems to be looming on the horizon.

Is crypto’s value solely in the eyes of its beholders? Who will win? Who will lose?

Warren Buffet called bitcoin “rat poison squared”; Jamie Dimon, CEO of JP Morgan Chase called it a “fraud”, and Larry Fink of BlackRock said it was “an index of money laundering.” (Time Magazine, March 29-April 5, 2021, “In Bitcoin I Trust”.)

Elon Musk insists that he believes in crypto’s future; so does Tim Draper. About 100 million people around the world own crypto, as of now. (Market Insider.)

Some institutional investors are buying cryptos as their cash reserve against the risks of inflation caused by global monetary oversupply in the past year due to COVID. Will that make crypto go mainstream soon? If so, how soon?…

What and who can make crypto legitimate?

In my humble, uninformed, non-expert opinion, what will save crypto is not just billionaires’ endorsem*nts and ownerships of crypto, but what the masses will do or not do: Only mass ownership and circulation will make crypto viable and legitimate. The more people buy and use it, the more viable this digital currency becomes, and the more likely the governments will recognize its co-existing rights with traditional currencies — with regulation and taxation.

It seems that Tim Draper wants to replace all paper money in the world with crypto. Are crypto and fiat mutually exclusive? If yes, crypto is heading into a potential war and what makes him think crypto will win?

If the answer is no, – crypto and fiat can coexist, what is the relationship between the two, are they interdependent of each other? Is it a symbiosis relationship (meaning mutually beneficial, “you scratch my back, I scratch yours”)?

Please stay tuned for our next Newsletter, which contains links to the video, podcast, and blog versions of my interview with Tim Draper.

Disclaimer: I am NOT an expert in crypto currency. This article and the next interview are not intended for promoting or demoting crypto currency, but only for the purpose of sharing my concerns for the average Joe investors.

Written by Joanne Z. Tan, May 13, 2021. © Joanne Z. Tan, all rights reserved.

Please don’t forget to like it, comment, or better, SHARE IT WITH OTHERS, – they will be grateful!

– To stay in the loop, subscribe to our Newsletter

(About 10 Plus Brand: the “whole 9 yards” is not enough, we go 10+ to exceed your expectations in brand building, digital marketing, and content creation for both business and personal brands.)

– Visit our Websites:

https://10plusbrand.com/

https://10plusprofile.com/

https://poemandart.com/

– Find us online by clicking or follow these hashtags:

#10PlusBrand

#10PlusPodcast

#JoanneZTan

#10PlusInterviews OR

#InterviewsofNotablesandInfluencers

#30SecondsofAnything

#BrandDNA

#BeYourOwnSuperpower

#BeYourOwnBrand

#StandForSomething

#WeAreBetterAngels

Post Views: 9