Dallas Native Voice | Bitcoin


Mary Beth Harrison: Hi. This is Mary Beth Harrison with Dallas Native Voice, and today we’re talking about Bitcoins or cryptocurrency, whichever way you want to look at it, but really specifically today about Bitcoins. It’s interesting to me that transactions, real estate transactions, have occurred throughout the United States to this date using Bitcoins. Uh, the Mavericks, the Dallas Mavericks are allowed to use, to use Bitcoins to buy tickets for their basketball. And, uh, Amazon, you can use Bitcoins through there.

So, it’s starting to be more and more widely accepted as a currency. So, I brought in some experts on this, because I only know enough to be dangerous. And so, I want to introduce you to Jason Browning with Certainty Home Loans, Walter Mazariego with Lawyers Title. And let’s talk about Bitcoins, guys. So, Jason, I’m just curious, could I buy a house through you using a mortgage and use Bitcoins?

Jason Browning: Typically yes.
Mary Beth Harrison: Okay. I, I guess most people pay cash for a house, and that’s the point of using Bitcoins. But foregoing that, I, I want to put a down payment of $20,000 down, and I want to use my Bitcoins for my down payment. So, could we do that?
Jason Browning: Absolutely. You would actually take that Bitcoin, go through a digital wallet, either Blockchain or Bitpay, just take it into cash and use that as part of the cash down payment.
Mary Beth Harrison: Okay. So, I would have to convert my Bitcoins into cash, give it to the closing table for Lawyers Title, get them to close it and that would be my down payment.
Jason Browning: That is correct.
Mary Beth Harrison: Okay. So, explain to me, Walter, how, how does that happen? How does this … Who, who decides that my Bitcoins are worth $20,000? So, I went under contract the beginning of March and I’m closing at the end of March. At the beginning of March, my Bitcoins were worth $20,000, but now I’m at closing and it’s either worth more or maybe it’s worth less. So, who decides that? How does that work?
Walter: Well, that’s all decided from the network of conscious computers that are working the blockchain of Bitcoin.
Mary Beth Harrison: Okay.
Walter: So, the more computers that are called, say good nodes, which nodes is a computer,-
Mary Beth Harrison: Okay.
Walter: … the more computers that are good nodes that have conscious together drive the value of the Bitcoin up and down.
Mary Beth Harrison: So, in other words, the more people who own Bitcoins, the higher the value? Is that what I’m hearing you say?
Walter: Mm-hmm (affirmative). Yeah. The more people that are mining Bitcoins and the more people that are in their transaction moving money around and moving Bitcoins around drives up the value of that.
Mary Beth Harrison: Okay, so I can’t … It’s not going to help just to have a Bitcoin and put it under my mattress.
Walter: No.
Mary Beth Harrison: I basically need to use the Bitcoins, and therefore by usage, it makes the value go up. Is that what I’m understanding?
Walter: Yes, ma’am.
Mary Beth Harrison: Interesting. Okay. So, so Bitcoins aren’t regulated. Like, I know for a fact my dollar is worth a dollar.
Jason Browning: Correct.
Mary Beth Harrison: The government tells me that. I’m in Europe, I buy euros. I know my euro is worth whatever it says it is on face value because the government stands behind it. Who stands behind a Bitcoin? Who decides, “By golly, your Bitcoin’s worth a thousand dollars.”? Who decides-
Walter: That’s, that’s actually the be-, the best thing about … well, not the best thing about Bitcoin, but it’s actually one of the things that make it so popular is that it’s a straight transaction. That’s it. Like, my value is that what I’m trading towards you, and that’s what it is.
Mary Beth Harrison: So, so it’s worth what a willing buyer and a willing seller are willing to agree it’s worth?
Walter: Yes, ma’am.
Mary Beth Harrison: Interesting. So, that’s the definition of value-
Walter: Yes.
Mary Beth Harrison: … which always surprised me when we can’t get a house to value at what we, a, a ready buyer and a ready seller are together on is price, and then we have a bank tell us (laughs) it’s not the right price.
Jason Browning: There’s no appraisers in Bitcoin.
Mary Beth Harrison: Ah, interesting. Okay.
Jason Browning: It’s what they’re willing to sell and pay. That’s it.
Mary Beth Harrison: Yeah. And since it’s just value, it’s all about what’s it worth to you today.
Jason Browning: Yeah.
Mary Beth Harrison: So, let’s go back to the $20,000 I’m giving you for my, for my closing, and we get to the table and for whatever reason, that $20,000 is now only worth, say, $15,000. Someone’s got to come up with that other $5,000.
Jason Browning: There, there’s a couple of ways that you could work that at the time of, of, you know, showing the down payment or the cash that you have in Bitcoin. If you were to choose to just wait and cash it out at that point similar to a stock, then it’s there. Uh, then you have it. But if you don’t, then you have the gamble of if it go up or down, more of a gamble if it goes down. Then you have to go off that, offset that with some other assets.
Mary Beth Harrison: Right. So, I guess it’s possible I sell my house for $100,000 and you pay Bitcoin for it. And it, we all agree it was worth $100,000, and next week it catapults up to $200,000-
Walter: Well, that, that’s the thing, like, uh, when, when you do purchases with Bitcoin-
Mary Beth Harrison: Mm-hmm (affirmative).
Walter: … you’ll get your Bitcoin that’s $150 … w-worth $150,000. Right?
Mary Beth Harrison: Yes.
Walter: And if you want to, you can either hold on to those Bitcoins or, in this case, in a fin-, in a home financial-
Mary Beth Harrison: Right.
Walter: … transaction, you wouldn’t get any Bitcoins, because it’s all cash.
Mary Beth Harrison: Okay, so you’re not going to physically get this thing, and hold it in your hand, and it’s called a Bitcoin?
Walter: You’re going to get cash,-
Mary Beth Harrison: Okay.
Walter: … because that’s how we … Again, we need to trade it into money so we can buy that house.
Mary Beth Harrison: Okay, so, Jason, how are we turning that into money?
Jason Browning: Again, you, there’s a couple ways you can do it. There’s Bitpay and then there’s also, uh, one called, um, it’s Block, uh, Blockchain.
Mary Beth Harrison: Blockchain.
Jason Browning: And they will actually act as a digital wallet, take the Bitcoin and transfer it into cash. It takes about 15 minutes, actually.
Mary Beth Harrison: Okay. So, the day of closing on this house, this fictitious house, um, the title company then, Walter, could go to Blockchain and go, “I need to turn these, these Bitcoins into the $20,000.” And it’s either there or it’s not there. The value’s either there or it’s not there. Right?
Walter: Yes.
Jason Browning: That’s it. Yeah.
Mary Beth Harrison: Okay. So interesting. So, so, then from a lender’s standpoint, you could do a transaction with a Bitcoin. And as a title company, you could do a transaction as a Bitcoin buyer.
Jason Browning: Mm-hmm (affirmative).
Mary Beth Harrison: Interesting. So, I guess I kind of compare it to a stock that we’re all kind of familiar with that premise of, “I’m buying an IBM stock, and it’s … this is its price.” And it’s either going up or down. So, I guess I could go buy a house with my IBM stock.
Jason Browning: Absolutely.
Mary Beth Harrison: Just what it value is that day when I go (laughs) to cash it in? Is it there or is it not there, right?
Jason Browning: Right.
Walter: Yeah.
Mary Beth Harrison: That’s kind of what it sounds like. So, tell me what else I don’t know about Bitcoins. Talk to me about, uh, who came up with this. Where, where’s the currency? I mean, it’s, it’s this, it’s like this currency in the sky kind of thing.
Walter: Well, Bitcoin’s been going … Bitcoin’s kind of old. You know, people have been trying to do cryptocurrency for a long time now, and it came through as, for a while, digital money like Venmo apps and what … you know, apps that you can just transfer money. And the thing about what Bitcoin is, it’s just a ledger. All right? It, it’s all a ledger that’s the same … un-, uh, I can’t even explain it. Um-
Mary Beth Harrison: (laughs) It’s on paper.
Walter: It’s on paper.
Mary Beth Harrison: Right.
Walter: Right? It’s all out there in the network that every can read this chain that has … it can’t be blocked off. Uh, you can’t change it anymore. Once it’s set in stone, it’s set in stone. You can’t go back. The next block can change it, which is going to be the new transaction that’s happen.
Mary Beth Harrison: Oh, okay.
Walter: But you need the old transactions to make that new transaction.
Mary Beth Harrison: So, it’s almost like little building blocks that kids play with, right?
Walter: That’s it.
Mary Beth Harrison: If you think about it that way,-
Walter: Yeah.
Mary Beth Harrison: … I start with one block and now I’ve got two blocks, so this is worth more because I have two building blocks.
Walter: Yeah.
Mary Beth Harrison: And I’ve got my Lego set here, and now I’ve got a whole dinosaur going, right?
Walter: Yeah.
Mary Beth Harrison: So, now it’s worth a lot more because I have a dinosaur instead of just two blocks.
Walter: Exactly.
Mary Beth Harrison: Got it okay.
Walter: And it was brought out to the public in 2009. I don’t remember that. It’s by an entity that no one knows who it is. Um, it’s … ah. His name Ata-, Satoshi, his last name’s Satoshi. Um, and he came out with a thing saying, “Hey, this is what we invented.” And no one has, no one knows who he is. It’s just an entity out there.
Mary Beth Harrison: He just one day decided, “I think I’ll create a currency.”
Walter: Yeah.
Mary Beth Harrison: And so, what’s the advantage of doing it or not doing it, Jason? What’s the, what’s the point? Why, why not just go hand you $20,000 and be done with this?
Jason Browning: Well, you know, again, some of the, you know, the appreciation of Bitcoin just makes it very, very attractive. The other thing is you avoid a lot of the taxes used with going with Bitcoin-
Mary Beth Harrison: Ah, let’s talk about that.
Jason Browning: … and in the, in the lack of regulation.
MaryBeth H.: Okay.
Jason Browning: So, you know, you talked about IBM a moment ago-
MaryBeth H.: Right.
Jason Browning: … and that’s regulated. This is very high-highly unregulated. And again, you, you talk about building value, it’s about the two people involved with the groups involved to drive up the value. I mean, I, I want to say last year we hit the high of like almost $20,000 per Bitcoin, if I’m not mistaken.
Walter: Yeah-
Jason Browning: And then we, we dropped it a little bit, uh, toward the latter part of 2017, I want to say, around 11,000.
MaryBeth H.: Okay.
Jason Browning: Uh, so, you know, it has moved up and down quite a bit in the last, you know, six months or so. Uh, but, uh, again not regulated and you can, you, you can influence the value between the parties.
MaryBeth H.: Interesting. So, if I sell my IBM stock and I made $20,000, the government’s going to tax me immediately on that gain of $20,000. Right?
Jason Browning: Correct.
MaryBeth H.: But on a Bitcoin, if that same evaluation from the day I started this to the day I went to use it, it went up $20,000, no one’s the wiser.
Walter: Unless you cash it.
MaryBeth H.: Right.
Walter: Unless you cash it, then-
MaryBeth H.: Turn it, turn it into cash.
Walter: Yeah.
MaryBeth H.: Which you ultimately have to do to create a transaction. Or am I missing something here?
Walter: There’s some places that accept … you know, Amazon-
MaryBeth H.: Just Bitcoin to Bitcoin.
Walter: … accepts Bitcoin.
MaryBeth H.: Right.
Walter: There’s a developer in New York that made a high rise, and he’s accepting Bitcoin. But he’s not doing transactions with it. He wants the Bitcoin.
Jason Browning: Right.
MaryBeth H.: Right.
Walter: So, what does he do? He’s an investor and he … you buy an apartment through him with Bitcoin, and he just keeps it.
MaryBeth H.: Yeah. Huh, what I have not-
Jason Browning: [crosstalk 00:10:13] When you have more companies that are, are willing to trade in virtual currency-
MaryBeth H.: Right.
Jason Browning: … then you’ll actually do the Bitcoin-to-Bitcoin and you won’t have to cash it out. We’re just not completely comfortable-
MaryBeth H.: Not quite there yet, yeah. (laughs)
Jason Browning: Yes, that’s correct.
MaryBeth H.: Right.
Jason Browning: Yeah.
MaryBeth H.: I guess because … I mean, because it’s not regulated, it’s, it makes it a little trickier, but the whole point is it’s not regulated and that is what’s making it so viable right now.
Jason Browning: Right.
Walter: Yeah.
Jason Browning: Right.
MaryBeth H.: So, you kind of have two sides of this, of this coin here that are … I guess that’s probably a, a cliché at this point to say the coin, but, you know, it’s like this weighted thing. Here’s the good news, I got good news, I got bad news. I got good news, I got bad news as you’re, as you’re dealing with this.
Jason Browning: Right.
MaryBeth H.: So, what haven’t I asked you? What can I … What else can you share with me about this nebulous Bitcoin thing in the sky? And is there only one? Is there only one cryptocurrency, or are there more?
Jason Browning: Uh, there, there are more cryptocurrencies-
Walter: There’s a lot. There’s a lot more. Uh, Bitcoin is just the most popular one because of the blockchain technology it does have behind it and that’s it, you know, pseudo anonymous, which means that, um, addresses … So, you use addresses to change Bitcoin to each other.
MaryBeth H.: Okay.
Walter: So, you’ll have a certain address that’s yours and I’ll have an address that’s mine, and we’ll use that together with our personal signature block to make that transaction. And that’s what the nodes run through an algorithm, make sure all those codes match up, make sure the dates match up, make sure everything links up together, and that’s how the transaction happens.
MaryBeth H.: Okay, so no one has my number and no one has conned your social security.
Walter: Yeah.
MaryBeth H.: No one else has my social security number, no one else has yours.
Walter: Right.
MaryBeth H.: Got it. And so, does that number stay with you forever and ever?
Walter: Yeah.
MaryBeth H.: That is your bank account number, basically.
Walter: Your signature.
MaryBeth H.: Your, your Bitcoin signature.
Walter: Their signature … yeah.
MaryBeth H.: Yeah.
Walter: That stays with you forever. Now, your addresses will change, and that’s what they tell you to do. They tell you to change the addresses, because if you use the same address after a while, that’s when they can start noticing, like, “Oh, this person’s using the same address-
MaryBeth H.: Address as in my email account, or address-
Walter: Addresses as in the hex number that Bit-Bitcoin gives you.
MaryBeth H.: Okay, that Bitcoin gives you. Okay, got it. Got it.
Walter: Yeah.
MaryBeth H.: So, it’s another thing that’s been assigned to you?
Walter: Yeah.
MaryBeth H.: Okay. So, you can change that, but you never change your underlying number, your … I guess your account number on those, is what you have to think about it like.
Walter: Yeah. It’s like, it’s 16 digits that are randomly made.
MaryBeth H.: Got it.
Walter: And each time that signature’s made, it goes through the algorithm that sort of spits out a specific number-
MaryBeth H.: So, I’m just curious, just one more question is, how safe is that? So, if I have this random number, if I … Can you get in? Can it be hacked? I mean, tell me, tell me what the security is of this, because it’s not regulated. It’s not, it’s not a lot of things. So, how, how, uh, intrusive is it to someone coming in and, and messing with it?
Walter: I mean, it gets attacked all the time.
MaryBeth H.: Yeah.
Walter: People are trying to hack it nonstop. I mean, there’s got … with anything, right?
MaryBeth H.: Well, it’s-
Walter: Anything that’s out there in the world-
MaryBeth H.: If people spent as much time doing good work as they do bad work-
Walter: Exactly.
MaryBeth H.: … we’d have a really productive world. Yes.
Walter: Right?
MaryBeth H.: (laughs)
Walter: Um, so, it’s constantly under attack,-
MaryBeth H.: Mm-hmm (affirmative).
Walter: … but the rules that they have set up in it make it so that the computers only want to work on the longest running blockchain that’s there.
MaryBeth H.: Okay.
Walter: So, that’s why no one can … That’s why it’s hard. It’s possible-
MaryBeth H.: Yeah. I think anything is possible.
Walter: You know, anything is possible, but it takes forever. So, it’s … If anybody wants to hack it, the blockchain itself, they have to start at the very first transaction-
MaryBeth H.: Oh, wow.
Walter: … and then build up from there. And they’re never going to be able catch up, because each time they’re building-
MaryBeth H.: They’re changing-
Walter: … the blockchain’s already changing, moving forward.
MaryBeth H.: Right.
Walter: So, it’s always, it’s a constant fight of that, but you can’t get it. Now, where it does get iffy is when you start using your half nodes, which is a computer that just uses a wallet. Now, the wallets are really easy to get hacked into, and that devotes a different economy for blockchain.
MaryBeth H.: Right.
Walter: Right? No. So, they always say, “Go to Bitcoin.org and download the full program from there.”
MaryBeth H.: So, Bitcom … Bitcoin … (laughs) I’ll get that out. Bitcoin.com. Is that what you’re saying?
Walter: .org.
MaryBeth H.: .org? Okay.
Walter: Yes, ma’am.
MaryBeth H.: All right. So, that’s a good place to go to get information.
Walter: Yes.
MaryBeth H.: Uh, Blockchain is another, uh, good resource if you’re wanting just resources to go find out more about this cryptocurrency. They have a lot of really good information on, uh, Blockchain. Jason, any final words from you?
Jason Browning: Well, the good news is, I mean, we’ve had about six or sevens transactions, and one here in Texas in Austin, a single family residence where the gentleman cashed in Bitcoin and bought the home. So, it … you can do it.
MaryBeth H.: Yes.
Jason Browning: That’s the good news.
MaryBeth H.: It’s definitely happening.
Jason Browning: Uh, and it’s, and it’s on the, on the uptake.
MaryBeth H.: Yeah, absolutely.
Jason Browning: So, uh, we’re going to be seeing more and more of this as, uh, it’s … you know, it’s going, it’s not going anywhere.
MaryBeth H.: Yeah. Well, thanks for the information. I think it’s something that all of us need to be informed about whether we use it or not. Information’s a powerful tool, as you know how I feel about that. And so, thank you for your time and for … and giving us some education on this. It’s al-always interesting to me. So, thanks for listening. You can find us dallasnative.com. And we can … you can, uh, go in there and find out a little more about this or at least, uh, link onto some areas that we get you the information, and we’re where you are. So, thanks for listening.
Jason Browning: Thank you.
Walter: Thanks.

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