James Altucher, successful Angel investor and Wall Street Journal bestselling author, has always wanted to do something which helps a large number of people. Being a cryptocurrency expert and a former hedge fund manager, he started a newsletter service that focuses on educating the masses and helping them find better investing alternatives with cryptocurrencies. Learn more about cryptocurrency and cryptography as James talks about what a bitcoin is and what the good ones are, and how to avoid the scams and find the legitimate cryptocurrencies that could go up thousands of percent. He also talks about his thoughts on starting his own currency that would provide great service to the subscriber.
Listen to the podcast here:
Sharkpreneur with James Altucher
This is Seth Greene. With me, as always, is our co-host, the inventor of the infomercial, and the original shark on Shark Tank, Kevin Harrington. Kevin, thank you so much for joining us.
Fantastic to be here. Looking forward to an exciting interview.
Our very special guest is none other than James Altucher. James is an entrepreneur who started over twenty businesses. He is a successful angel investor. He is the Wall Street Journal bestselling author of the Choose Yourself series, which I have all of them. He is a newsletter publisher, which I subscribe to all of them. He is a cryptocurrency expert and a former hedge fund manager. He is a prolific content creator. James, thank you so much for joining us.
Thank you for having me. I’m so honored to be on your podcast.
You crammed more into one lifetime and you’re relatively young than most people get done in five or ten. How do you do it?
For better or for worse, when you do too many things, some things you do very poorly and you have to learn from that and learn from the failures and hopefully then attempt the next thing, which you can be a success at learning what you learned.
James, in the hedge fund world, it’s no secret, you’ve been playing a lot in the crypto space. You come out of the hedge fund business. From your connections, what are their views on crypto versus your views?
I was offered the opportunity to run a sizable crypto hedge fund and I didn’t want to do it. I’ve been in the hedge fund space, I’ve been in the fund of hedge fund space where I invested in other hedge funds and it’s a drag. You have up month, up month, and then one down month, and everyone’s yelling at you. You’re making twelve rich people even richer, and I wanted to do something, which I’m sure you can relate to, which helps large numbers of people. Let’s educate the masses in between Silicon Valley and New York. What is a bitcoin? What are the good ones? How to avoid the scams? How to find the legitimate currencies that could go up thousands of percent. I’m invested in cryptocurrencies but I started a newsletter service to focus on educating the masses and helping them find better investing alternatives with cryptocurrencies.
What we’re seeing is we went from 1,000 to 20,000 over the past year. It got a pullback, which was not unusual at all. Pulled back all the way down to 5,000. You saw most of the run-up in December, so a lot of these weak hands that didn’t know what they were doing. They bought and bought and bought and then they saw it go down, so they sold and sold and sold. We cleared those out. It’s going up again, like maybe it’ll hit 10,000 and a full 100% move up from the bottom. It should continue from there.
The great thing about cryptocurrencies in general as opposed to gold or as opposed to paper money is there are thousands of man years of science that are an innovation that are backing these currencies. Gold, there’s nothing backing it other than it’s a metal that’s been dug up from the ground. Paper money, there’s nothing backing. It’s something that has “In God we trust” on the back and the signature of the Secretary of Treasury, and a pyramid with an eye. If you believe that religion, I don’t know. That’s all that’s backing that money.
You brought up the government with all of the activity in the cryptocurrency space. How long do you think it’ll be before the government tries to regulate or tax it?
The government’s already trying to regulate and tax it and power to them. The only legal currency in the US is the dollar. Gold is not a currency. What do you even use gold for? I asked gold aficionados, “Other than jewelry, what’s an industrial use for gold that isn’t done much cheaper by silver?” There is no answer. Bitcoin and cryptocurrencies in general, there’s a huge numbers of technologies and problems that it solves, not just with money but with many other industries. The government should regulate it because let’s say there’s a thousand cryptocurrencies out there, probably 95% to 98% of them are total criminals, scams, frauds, or worthless, and so there should be some regulation because like any financial innovation, there’s a lot of fraud out there. As far as taxes, if you don’t pay your taxes, you’re breaking the law, whether it’s with dollars or gold or bitcoin or whatever. It’s against the law if you’re caught not paying your taxes.
I’m in commerce side of the business, selling products, and gadgets as seen on TV, whatever and Overstock takes bitcoin. Mark Cuban is going to be taking bitcoin Mavericks tickets. Where do you see crypto in terms of commerce in the future?
There was news that eBay’s looking into taking cryptocurrencies, which is a huge thing. The next thing that we’ll follow is Amazon, which will eventually start taking cryptocurrencies.
I’ll tell you a story. In 2013, I set up a bitcoin-only store to sell my book, Choose Yourself. I released it a month before. I released it on Amazon. Bitcoin only was the only way to get my book a month before I released it on Amazon. I sold a number of books and everybody left their email addresses because I had to email them a PDF of the book. I sold it for 0.1 bitcoin, which would be$1,000 for a PDF of my book. At the time, I was like $6 or with bitcoin was 61. Most of the people who bought were from the corporate email address for Amazon.com, so Amazon has been looking in this space for a long time and they’re eventually going to accept cryptocurrencies. I’m positive of it. Part two is countries will start accepting cryptocurrency. Arizona sat there looking into accepting bitcoin to pay your taxes, but now we’re seeing countries like Argentina. Every time there’s political volatility in Argentina, the whole population suddenly opens up new crypto exchange accounts because they don’t want Argentina to seize their money again like Argentina has done two or three times before or devalued their currency.
Cryptocurrency solves the problem of the government devaluing your money, the government seizing your money, other people forging your money, human error with your bank, the potential for the bank to see what you’re doing with your money, and all sorts of government services to see what you’re doing with your money. Cryptocurrency solves problems, actual multi-trillion dollar problems created by government currency. Government currency solved huge multi-trillion dollar problems created by gold. We see this as the next evolution in money and that’s why this is huge. Give us $200 trillion of paper money out there. There’s only $200 billion of cryptocurrencies. That’s a thousand X game, but supply and demand is fixed, so the price is the only thing that’s going to change here.
Let’s switch over to Blockchain. Blockchain is the underlying technology of crypto, right?
It’s part of it. There’s also cryptography. There are a lot of different aspects of the technology but Blockchain is certainly the most prominent.
Have you dabbled at all in any investments in any Blockchain deals at all out there?
Yeah, because every time you see a cryptocurrency that has a use, it means that it’s taking advantage of Blockchain. What most people don’t know is that Bitcoin and Ethereum and other crypto currencies, with software, they deleted the need for contract lawyers. Using Blockchain and the cryptography of Bitcoin, you can make wills, you can make escrows, you can make contracts for people. For instance, I invested in a coin called Filecoin, which allows me to instead of storing files on a centralized service like Dropbox or Google Drive, I can store it on a de-centralized network of worldwide computers that hold Filecoins. It’s the Blockchain aspect and the smart contract aspect of Filecoin that allows me to create these contracts between my files and all the computers that are decentralized that I will store my files on. That’s one example.
Explain more about how it replaces the need for contract attorneys. I get the sending money and I get the storing files, but educate us a little bit more in terms of how it replaces that paper contract, how it replaces that legal binding agreement between two parties?
I use it in the sense of Filecoin, but we can also describe it in terms of wills or standard contracts. In terms of Filecoin, let us say you own some Filecoin and people in China own some Filecoin and people in Egypt own some Filecoin and now I want to upload photos of my family. It’ll get sliced up and all the slices we put in this very private way across all these computers, so no one could ever see what my photos are as opposed to on the centralized servers. What’s to prevent you from stealing my photos? Implicitly in how Filecoin is set up, using the Blockchain and using cryptography, there’s a way for the Filecoin and all these currencies are set up that have actual use. There’s a contract between you and I, so that you can’t steal my photos or if you do it to someone else, it’s also decentralized, so there repeats in other computers, so that’s a way I’m using the blockchain to have a contract with all the users of all these computers so that I own my photos and you don’t. You’re storing them for me and you get paid. I pay like a fee through Filecoin.
James, this has been a topic out in the press on the advertising side. You’ve crushed it with your digital ads. I get them eight to ten times a day on the places I go, and then Facebook came out and said, “We’re not going take any more.” Is that the only place that’s putting a little cramp on spending for you?
Google was for a short period of time, but now Google isn’t. The reason why people are seeing these ads is because they’re working. We’re doing well with them. I have a whole team working on the product. We have great researchers, venture capitalists, and so on, working on the product, including me of course. It’s a quality product where we’re helping people. To be effective and to reach the most people, you advertise as you know. We spent money, it worked. The ads were good. People understand my background and so they said, “I’ll trust this person instead of these people I don’t know.” It’s working, but literally they are working so well, we kept upping the spend and they were everywhere. I was in Turks and Caicos, a guy on the beach setting up my umbrella asking me for cryptocurrency advice. It’s awesome. Everywhere I go, there’s been billions of impressions of this AdServ. It has pros and cons.
Kevin, let me ask you this. How did you ever deal with the people you did infomercials for when they started? Sometimes infomercials, like these ads, are not always seen in the most favorable light. Even if the product is sincere and authentic and effective, there’s a backlash. At the very least, there’re people who don’t like advertisers or marketer.
We did Tony Little and Jack LaLanne and George Foreman. Most of the time, it was positive, although we would spend and spend. I was getting up to $1 million a week and spend on some of my big campaign. You’re driving some big branding at that point. I enjoyed seeing it because we’re only spending because it’s working. I’m a direct response guy. I love to see people have success and generally there are people quick to come in and duplicate. I haven’t seen anybody becoming the second guy in yet, but there probably are. Has anybody else come by?
There’re a lot of attempts and I know we’re doing better than them because everything’s going well. We’re getting testimonials, the portfolio’s doing well, so we’re always able to regenerate new copy, because everything is going well, so that increases. We test the ads. Unfortunately the ads with the pictures of me are the worst-looking pictures possible. For some reason everyone wants to click on those, but then the copy explains the philosophy of this is why bitcoin and cryptocurrencies in general are going to replace paper money, $200 trillion here, $200 billion here. We give the reasons why and we give a free course. As you know, we get as much value as possible upfront for free and then people could decide if they want to buy. I’m not even trying to sell here. We give a lot of value for free, you don’t even have to buy. Then we give a huge guarantee at the end. As you know, you give guarantees with these things. Some people are offended. If I were to say, “Please everybody, buy my methods for making you 1000%,” I would get no subscribers. You have to advertise to get people to look. We live in a tension-glided economy.
The best investor in the world may not be Warren Buffett. It is someone no one’s ever heard of because he didn’t have any marketing but he picks better stocks. Who knows?
That’s very possible. Who knows? Warren Buffett is a weird example because when you invest like that, he’s got $60 million worth of investments, but at the same time, there’re so many examples. You have to use the most aggressive techniques possible to reach large numbers of people and then what tells the truth at the end of the day is your product good or not. If your product’s good, word of mouth, people are going to keep on buying your product and you keep on advertising.
I’m a subscriber by the way. I love reading, number one. It’s cool. Congratulations on all of that. My closing thought, the Dollar Shave Club guy did very well, sold to Unilever for a billion dollars. Do you know Chris Stoikos, the Dollar Beard Club guy? He does very well. Your next business can be the Dollar Hair Club guy.
You’ve got this amazing marketplace as a crypto analysts, any thoughts about starting your own currency?
I want to provide great service to the subscriber, so I’m only looking for their benefit. Obviously the price of crypto I’m linked too because I’m selling a service. I own Bitcoin, Ethereum, some other currencies, but in general, if you stay with the legitimate ones, the ones that solve huge problems, they’re going to go up. In terms of my own currency, I thought of an idea, which I don’t quite know, I haven’t wrapped my head around it completely. I thought of an idea where it’s like the old Bowie Bonds. Why don’t we all pull together and then put 10% of all of our incomes in a black box and then issue a currency off of that black box, so people can bet on groups of people by buying the cryptocurrency for those people, like Kevin and Seth, we can take all war-room mastermind or whatever or pull all these marketers together and say, “10% of this is going to go on this black box and people will own the cryptocurrency, can trade it, and trade with bitcoin and so on, and it’s based on the price of how much money we’re generating, so people couldn’t anticipate that.
The future is on digital marketing income. I would bet on that.
That’s how Blockchain and cryptocurrencies, that would be like a contract, “We will put all the income generated in the Blockchain, all the transactions will be tracked and all the people who subscribed will be tracked and then the money’s disseminated accordingly.”
You might be onto something pretty cool there. I like it.
I keep running around. I don’t know. There are only so many hours in a day.
We know your time is incredibly valuable. For the audience who want to learn more about what you’re doing, there’s 8,000 different ways we could send them to. What’s the one you want them sent to?
JamesAltucher.com because then you get the full picture of what I’m all about. Also, there’s a link to my podcast where you can scroll back a couple of years and listen to Kevin Harrington on my podcast because I had a lot of questions for him too about all this.
That’s great. I appreciate that. James, thanks.
- Kevin Harrington
- James Altucher
- Choose Yourself
- Mark Cuban
- Tony Little
- Jack LaLanne
- George Foreman
- Dollar Shave Club
- Chris Stoikos
- Bowie Bonds
About James Altucher
James is a Top 10 Linkedin Influencer, prolific writer, successful entrepreneur, chess master, and venture capitalist. He has started and sold several companies and is actively invested in, or advises, over 30 different companies in areas ranging from tech to energy to healthcare to biotech.
He is the author of the Wall Street Journal Best Selling books: ‘Choose Yourself’, and The Power of No (co-author), as well as “The Choose Yourself Guide to Wealth” (most recent book), “The Choose Yourself Stories “, SuperCash, Trade Like Warren Buffett, Trade Like A Hedge Fund, The Forever Portfolio, 40 Alternatives To College, and I Was Blind But Now I See.
Because of the popularity of the book “Choose Yourself”, Choose Yourself Meetups, helping people network, come up with ideas, and actively contribute to each other’s success, have sprung up all over the world.
USA Today ranked James: “Choose Yourself” second among the 12 Best Business Books of All Time.
James is the Co-founder of 20 companies, including some that have sold for large exits. Previously he was a hedge fund manager.
He is currently on the board of a public company with a billion dollars in revenue and advises several others.
James’ writing has been featured in The Financial Times, Forbes, The Wall Street Journal, TechCrunch, and The Huffington Post.
He hosts two highly ranked podcasts: The James Altucher Show (which includes guests such as Mark Cuban, Peter Thiel, and Tony Robbins etc) and, Ask Altucher, in which he answers direct questions from the audience. Collectively the shows have been downloaded 12 million times.