Let’s Talk Crypto | CoinPicks Live

What's going on everybody? Welcome back to the live stream. We're doing live streams every day. We're a little bit late today. We're a little bit late yesterday too. It's because we do a lot of trainings, but we're going to be doing it every day from 3 to 4 PM Eastern Standard Time. Show up. We're going into deep crypto. I had a course. There's a free course on our website, coinpix.app, that you guys can sign up for. It's really cool, has a whole bunch of stuff, but I'm kind of going off tangent on purpose because we're getting into some deep crypto concepts. Some really, really deep crypto concepts. So today we're going to be talking about wallets, but all the backend stuff and how they all work and the safety of them and how to send money and where it goes to when you send money. The entire thing about wallets, okay? That's going to be the foundational teaching. From there, if you're new here, do me a favor, like this video, share it with as many people as you possibly can. The whole purpose of these live streams is to educate as many people as I possibly can at the exact bottom of the market. So where you don't want to join crypto is when the market's up, right? Trading 101, write this down in big letters on your wall, tattoo it on your arm, and call your mom and tell her, buy low and sell high. Does that make sense? Yes. So what you don't want to do is start your education process at the exact top of the market. And so as a free will gesture to the world, I am just going to nonstop binge education From 3 o'clock Eastern Standard Time to 4. So tell your friends at the bottom of the market. Tell your friends. Share the button. Click the button with the share thing and the like thing for the algorithm so that more people can see this video. Get your friend group that keeps talking about sports and convince them to talk about money. That little friend group that's always talking about things that don't make you money. Send them the link and be like, hey, I wanna change my life. I want financial abundance, and I'm tired of talking about sports because it keeps me broke. Send it to those people, share it with as many people as you possibly can so we can get into this livestream. And then come back tomorrow, be consistent, 3 to 4 PM Eastern Standard Time. What we do is we livestream to all platforms, and then we do the recording on the website, coinpicks.app. Also, crazy, let's just take this further. We have a big blue button. It's not on this page here. But imagine a big blue button on the website that says to get the free autonomous trader. Autonomy means it buys, sells, and does the research automatically, nonstop for you. You do nothing. It just buys, sells, and does the research. We give it away for free, 100% free. Not only do we give it away for free, it's called the execution layer, but we also give away the brain Which we're currently running anywhere, it costs from— Jesse told me today he spent like $700. So I don't even know if it's $100 to $300 a day. It could be up to $700 a day where it does a whole bunch of buying and selling and it does research. We let you connect to our smart AI for $10,000 a month. Just kidding, it's free. So you get the execution layer and you get the smart brain. I'm just burning through. And you're probably like, ask Alex, how do you make money? The way that we make money is when you click that button, you'll see a process where it sets you up with consultation. So if you wanna get on one of our calls with our guys, they're gonna show you how to train the bot, set it up, keep it consistent, because every bot is different. We can give you a file, but it might set up different according to the model that you use, and they just go rogue sometimes. I don't understand why. So we train you. We train you how to use the bot. We train you how to keep it consistent, make it more profitable, use your specific strategies, not ours. We give you our strategies, et cetera, et cetera. And you can go through that process if you want to, and if not, don't worry about it. No pressure. Just get the free AI, and then hit me up in a week when you realize that you need training because of how hard it is. So click the button right here, blue button, free AI trading, sign up. We're going to get into the lesson. All right, so today we're going to be talking about wallets. So cryptocurrency wallets are different than your regular wallet, right? The wallets in your pocket, you have a wallet, you have cash in there, it's similar. But in cryptocurrency, You'll see like a Chrome extension, it could be a digital app. The main ones right now are MetaMask. I'll give you, you know, they change all the time, but MetaMask, and then usually the chain that you're using has its own wallet. Like for example, Base has their own wallet, and then we have Solana, it's Phantom, they have their own wallet. And then also, what is the other chain called? Robinhood. Robinhood wallet. Robinhood has their own wallet. So like there's like The chain usually has their own preferred wallet. MetaMask kind of connects to all the chains. And then we have some wallets that like, it doesn't really matter, to be honest. They're kind of all the same thing with the same security. So typically what we use, at least what I use on Base, I use the Base wallet. I use Phantom and then the Robinhood wallet. And then I also use MetaMask. I use kind of all of them. And you'll realize that especially when you want to separate funds, that you're going to use different wallets. Does that make sense? Mm-hmm. All right, so the first concept you guys have to understand, because a lot of people don't get this, is there's the centralized world and the decentralized world. So there's something called a centralized exchange and a decentralized exchange. Now the centralized exchange is where you trade cryptos, so both of these trade cryptos. Now I'm going to give you an analogy so you guys understand. But basically, I want you to imagine going to a new land. We always give this analogy because it kind of works in crypto. But imagine like you're, I don't know, early America, and you're going to mine gold, and there's no settlement in Texas. And you're going to mine and there's no one there. You build like 5 houses. And then after you build a certain amount of houses, you kind of create like a mini town. One of the first things to be birthed is the marketplace. So the marketplace is this. This is where you can buy and sell digital assets. In the form of the analogy, it's goods, right? So if somebody has leather, you want to buy leather, you give them cash, etc., etc. It's a place where you trade from one coin to another coin. So obviously, this is where all the economic value is, right? Pro tip, when we buy coins, we're closely assessing these. This is where all the economic value is, right? You want to see where the money is going, Within the centralized or decentralized exchange. So our autonomous bots, pretty much everything, even manually, all we did nonstop is look at the DEXs and the pools within the DEXs. Does that make sense? Yep. So this is like really important. If you have like a buzzing marketplace, the coin can suck, but just because the marketplace is buzzing, it can get some of that offset liquidity and go up in price. Does that make sense? Okay, now let's go into— we have centralized exchange and decentralized exchanges. So decentralized exchanges are typically the foundational decentralized exchange. We're not going to go into details. We might do another training on this is AMMs. So these are automated market makers. This is a zero one to a zero to one innovation created by cryptocurrency did not exist before blockchain technology. It's one of the most foundational pieces of all cryptocurrency is the automated market maker model. Now they have since hybrid and changed it. And there's other really cool ones, and they have their specific reasons why they're cool, and they get better and better to solve the problems. But the core automated market maker is something that every crypto person should be studying intently. It's like top 5 things of importance in cryptocurrency, okay? Now, the centralized exchange, and to put it simple so you understand, imagine a pool. Let's start here. Imagine a pool of money. Half of it is the token, So let's say token A, right? Token A, and then the other half is the USD equivalent. So when you go to trade, there's always like a pair, right? You notice it'll be like USDC ETH, right? Bitcoin USDC, like these are pairs. So that pair is what you trade in and out of. Does that make sense? So if you have token A versus USDC, What it is, and this is a very simple version, but you should understand. Let's say this pool was worth $1 million. So in this pool, it would be $500K here in USD worth of the token, and there would be $500K here. So it's an even split pool. And so what happens is when someone places a trade, someone just, let's say that somebody wants to buy, they have $20,000 and they wanna buy Token A, they'll put $20,000 through a wallet, they'll connect the wallet to the AMM, they'll put $20,000 in the trade, they press confirm, they pay a little gas fee, they set their slippage. These are deep things, we'll talk about it later. But essentially, they'll set the parameters of their buy, they click buy. And what will happen is literally the coin, right, they have to— if they're buying $20K, they have to put in $20K of USD, they put $20K of USD, The $20K will go into this pool. This will now be $520K, right? $520K. And then right here, $20K will leave. This will now be $480K, right? And then what happens automatically, really, really fast, is the pool will rebalance. So really, really fast. There's different forms of ways to do this. Like sometimes they have built it into the automated market maker. Mm-hmm. Some don't have it built in, and there's just these arbitrage bots. Arbitrage is basically people that take advantage of these price differences, and they buy and sell it really fast, and that evens it out. But long story short, there's multiple mechanics that will get this pool back to the $500K, $500K. Does that make sense? Mm-hmm. And you'll understand what I mean by this, but the whole point of it is to just get the pool locked in to $500K. And so like, that's— this is all like no human. This has never existed before. Before, They— I don't explain the other model, but basically this has never existed before, and it makes it— it allows for the buying and selling to be fully automated with no humans at all. It's a decentralized exchange market. Does that make sense? Yeah. All right, wake up. I know this is a hard concept. You guys get it? This is probably the most pivotal crypto thing in all of crypto. Please understand, this is like— this is exactly why our strategy makes so much money. This is why I tell people, when you come from traditional stock market and they try to bring their strategies, I'm like, man, you have no idea. The core foundation of our strategy comes from something that didn't exist in the stock market. So all of your technical analysis, all your hoopla doesn't matter. It literally does not matter. It actually is a lot of times an inhibiting factor to somebody making money in crypto, because they just, they're just like, you have to unlearn a whole bunch of stuff. Does that make sense? Mm-hmm. Okay. That's the decentralized world. That is where all of the money is. So another aspect of the decentralized world is all the small coins that do the 100x's. They don't usually come from here. They usually come from here. And so because there's a learning curve, you know, people never really get the real fruit of crypto, which is the high multiples. Our strategy primarily is liquidity displacement. So if I displace this pool, let's say it's only 500 on this side, right? There's only 500. So if I put in a buy order of like 480,000, what's going to happen? It's going to get filled. That thing is going to get displaced, meaning one side is going to be super lopsided and the other side is going to be super lopsided, right? It's going to be super uneven. And so think about it. In this case, the small case, what happens? The small case, we have the 480,000. The automated bots will go and they will sell to this one, or the opposite, it will buy from this one. So essentially, it will be the bots bringing up the price. When you have a whole bunch of buys, you have one buy order. When you have a whole bunch of buys, it will bring back up the price. Does that make sense? Yep. I'm gonna try to put it a little bit more simple. I come in with a buy, $20K, it displaces it. To even it out, there's buys and sells. Those buys and sells lead to the price increasing or decreasing. So if you have a big displacement, meaning it's massive, then those bots are gonna run it up and really move the heck out of the price. Does that make sense? Whether either down or up or down. Does that make sense? Okay, so the centralized exchange, they adopt— there's these weird hybrids now, but the centralized exchange adopts the automated market maker on the back end, but then they also have something called the order book model. And to put that simple, this is the way that traditional finance has always ran typically. It's just they just try to pair and match Buys and sells. What that means is if Carlos wants to sell me something at $10 and he puts an order in, hey, I want to sell this at $10, and another person wants to buy it at $10, they match them and it makes it happen. That's completely different from this. This happens regardless if a human wants to buy or sell. It just— you could do it automatically in the pool. In this case, there needs to be an order that needs to be filled. Does that make sense? It sounds small, but it's a massive difference. All right, the reason why I explained the difference between centralized exchanges and the new ones, by the way, like the Coinbase ones, like the new hybrid exchanges, they have this, and then on the backend without telling anyone, they have this as well. Does that make sense? So they kind of merged them. This recently happened like a year and a half ago. I've never seen it before. So that's like obviously the most options, right? So on centralized, Like a Coinbase, you're going to have more options for like ease of use. But then on the small pools like this, you're going to have the higher multiples. Does that make sense? OK, that's pretty much it. Now, on both of these, you have wallets, right? Go ahead, you have a question?

Yeah, sorry, about the liquidity displacement. Yeah. So let's say, for example, somebody was to buy, like you said, 480 of it. The bots start going crazy, they start trying to fill it to balance it out. Yeah. How does that affect the price? By the buy, it shoots up?

Yeah, so for example, like, okay, I'll give you an exact— so for example, if, um, somebody has $480,000 cash, they're buying $480,000 of Alex token,

right?

So that means that this side only has $20K, but this side has a lot of cash. So what the bots are going to do is they're going to buy a whole bunch of Yeah, they're gonna buy a whole bunch of this token. No, how does it work? Off the market, right? I'm getting the math wrong. So it goes, this will have— yeah, so because the 480 goes to the guy, so the guy now has $480,000 worth of Alex token. This only has 20, so we need to fill this with Alex token. And oh yeah, I'm sorry, okay, and, and what will happen is they'll get it from another pool. So there's not just one pool, there's like many pools.

Right.

So you'll have like a whole bunch of these. And so what they'll do is they'll go buy Alex token on these pools to fill in the gap. And that will increase the price because that's—

That will increase the Alex token.

Correct.

Right. And so in reverse, if somebody, if people were to sell $480,000 worth of Alex token— Yes. It dumps.

It will sell the heck out of everything. Because what they're doing is they're taking Alex token, they're injecting it here, and then the pool is forced to give them the cash. So now they have $480K cash, and then now the pool is forced to sell the Alex token to get more cash to balance it. It's not exactly like that, but it's pretty much like that. Does that make sense? And it loses value. Yes, correct.

So would that be like an example of a rug pull?

So a rug pull would be the case to where they remove the liquidity. Most of the time, they'll remove the liquidity, and so this $500K will go to like— it'll be the same pool, But it'll be worth like $10 on each side. So if it's only worth $10 of ALEX token and USD, and you can't sell more than $10, so you could have like $500,000 and it says in your wallet that it's $500K, but then if you can't sell it anywhere, is it— it's not worth $500K. Does that make sense? So the pool is so small you can't even sell it. Does that make sense?

Because it's not gonna— it's not gonna match your payout. So even though it looks like a lot, On paper, it's not a lot.

Correct. So like in your wallet, and I know a lot of people are like, they claim billionaire status, but they can't sell their coins. They're not billionaires. But like, for example, they'll be like, oh, I have in the wallet, it might say, because the price on the website says that it's whatever, it might say in your wallet that you have $500K. But when you go to sell the $500K, the price impact will be like 99.9%. So yeah, you could sell it, But it'll be like 99.9% impact or something. And then you could sell it, but you won't pull any value out. You'll sell it and you'll get like $10, $5 of real USD cash because the liquidity pool only has $10. So you can't pull anything out.

Is that what happens in Zora?

No. Zora still has liquidity, but because all the individual pools, I think, Like there's individual pools of coins because they lost liquidity and the Zora token was tanking. It could have like been a kind of leverage effect of all of the communities dropping and then also Zora at the same time just sucking liquidity dry. I don't know, I haven't studied it, but I'm pretty sure that— and it's really the answer to any price drop is, is like sucking liquidity. And it doesn't— a rug pull Is like when they purposely suck their liquidity. But there are cases where the investors just don't want a part of the product, they don't want to provide liquidity anymore, they just don't like it. That's not a rug pull, it's just a failed project. Does that make sense? Mm-hmm. Cool. All right, all this to say this: there's wallets on both of them. So there's wallets on a centralized exchange, and there's wallets in a decentralized exchange, but the difference between— But the wallet is not on the decentralized exchange. So on the centralized exchange, the wallet is on. So imagine like a little wallet, right? On the decentralized exchange, the beauty of the DEX is that when you hold your crypto assets in a wallet, you can connect to any decentralized exchange in the world, and your crypto stays here. So in this case, you don't actually own your money. In this case, What it is, is it's on this app, and they're giving you permission to it. And at any time, and in terms and conditions, they can press a button, and they can take your money. That's what happened, like, at FTX Exchange. It's not directly like that. They can't obviously just take your money. But if they file for bankruptcy, or if like something happens, they don't have to pay you back. They just, they actually own— this is the concept of ownership. They own your money. They give you access. That's the same exact access you get with your Wells Fargo and your bank account. Does that make sense? You don't actually have cash in your hand. It's a number on the screen. And what happened to Victor the other day is that they decided to stop banking with him. They literally canceled all of his bank accounts. I think because he works for a crypto company or something. Canceled all his bank accounts, sent him a check and said, we're not banking with you anymore. That cannot happen or exist here. That could only happen in centralized entities like Wells Fargo, Chase, and like Decentralized system, and there are centralized apps in crypto like Coinbase that can happen there. Does that make sense?

No, most people don't know that either, right?

I would say like the, the, yeah, I would say like vast majority, but when they get a little bit into crypto, this is like a concept most people start to understand. Does that make sense? Do you guys understand? This is a lot. I'm trying to like force knowledge in your head. Please slow me down.

No, you're good.

Okay, so in this case, the main thing you gotta understand is that this is not decentralized crypto. Centralized exchanges are like basically, and they do it on purpose because they want to give people convenience, because it's significantly easier to buy, sell, and to trade crypto on a centralized exchange. It requires pretty much no know-how. You can Apple Pay, buy, boom. Now there is some features with DEXs, but it's not as easy. Does that make sense? Yeah. So it's like you're sacrificing convenience for ownership. So if you don't want convenience, you can own your assets. Okay, now there's a couple things. So security, right? Security surface area. Like in one case, centralized exchange can go bankrupt, right? But what I've seen is the trend, and this is why I shift my opinions and stuff, is 9 times out of 10, when someone really loses all their money, it's because they lose their private keys. And I'm explaining that it's because they literally lose access to their DEX wallet. It's gone. That is what we see most commonly. We don't see, for example, a centralized exchange going bankrupt as a common thing. That is not common. It's happened like one time. It happens a couple times, but like on a significant level, it only happened one time with FTX exchange. And then I believe after that, it will probably never happen again. Does that make sense? So it is actually technically, in my opinion, if you take in and factor all the variables of wallets, significantly safer on a centralized exchange. The chances of you losing your money on a centralized exchange are significantly less if you take everything into context. Does that make sense? Okay, but you don't own your assets. Do you guys understand? So you're kind of like giving them the security and like, hey, you got it, bro. Does that make sense? And they can use your money to make money, by the way. I don't know if that's a— that's what FTX did. I don't know if they like blacklisted or like made that illegal, but they definitely use your money to make money. They can do loans. I don't know exactly if they banned it. But, um, back in the day, they would run your money up. They would do like fractional reserve banking. Like, they would have like customer deposits of like $10 billion, and it would leave like, you know, $10 million on there and not care. That's how FTX went bankrupt, because they were like loaning their money out, doing these arbitrage liquidity strategies, all these crazy things. And then they messed up, and then they went bankrupt. Does that make sense? Yeah. But I'm telling you, like, the odds of that happening again Especially with the integration of Coinbase in the government, it'd be like taking down the United States government. Like, I don't— like, they're so ingrained with the government, like with USDC and Coinbase, that conglomerate. It's like, it's like a monopoly. It's a monopoly right now, modern-day monopoly for them. For Coinbase to go down— and this is why I put all my money in Coinbase— for Coinbase to go down would be saying all of crypto Armageddon, essentially. So like, that's like an ultimatum that I don't believe it will exist. Does that make sense?

Yes.

So for security purposes and for your life, I, uh, not official financial advice, would recommend you play with this first. Of course, first, please. Now, if you are getting degen mode and you want to like really get that 100x, you can't really— you can kinda, not really. I would say most of the 100x's are going to come from here, which gets us into the concept of decentralized wallets. So decentralized wallets give you 2 main keys. They're all kind of different. But the two main ones is a private key and a public key. Okay, please understand this. The private key is a thing, and sometimes it's like they give you versions of it. They'll give you like a key phrase or a key string. It's the same concept, but basically it's the thing that you do not give out. It is like your wallet. It's like if you give out the private key to someone, You are handing them your wallet. They can refund, they can take your money from anything in the world. This is the thing that you keep extreme. This is your true ownership. That's actually your true ownership because you could have the wallet like you open Chrome, right? You ever seen, you guys know extensions, Chrome extension? So you pop open the Chrome extension, you see the little wallet, you see like $10,000 in there. That's your money. Let's say your computer goes fry. Like let's say you like drop, this happened to me recently. I dropped coffee on my computer. It actually broke. Right? The beauty is, is I had my private keys written down on a piece of paper, and all I got to do is plug my private key into any wallet I ever want— Coinbase wallet, MetaMask, does not matter, they all follow the same standard— and my money pops up. So the real ownership comes from the key. The little frick— the box on Chrome is just a front-end interface. It's just an interface. That's all it is. It's literally a place where you can see it. That's it. Does that make sense? This is the true wallet, and that standard is pretty much consistent throughout every blockchain— Bitcoin, Ethereum, XRP. They might be called little different names, like a key phrase, but they're the same concept. Does that make sense? That is the ownership right there, that key of string. All right, okay. The public key is your— basically your, uh, your email address. You hand that out to people so they can send to you. It's the public identifier of your wallet. so that somebody can send you money. Does anybody have any questions? Going once. What's up, Jenny? Can you give some examples of decentralized exchanges? Yeah, so I'm going to get into that, we'll get into that. Okay, so let's get into that part. So does anybody have any questions about this? All right, cool. Now, let's get into examples of decentralized exchanges. But before we go into decentralized exchanges, which I told you in the analogy of the town, which is like the place where the marketplace exists, we have to first understand the land or the land that's under the town, which is the layers, okay? So there's all these different types of blockchains. There's layer 1s, there's layer 2s, there's even layer 3s, but they're not that popular. And there's actually layer 0s, and they're not that popular. But this is basically where all of the money exists. So essentially, on each layer, they will typically have a main exchange, right? They'll have a main exchange or a main DEX. They'll have a main DEX on the layers that is like very obvious in different ways. Sometimes it'll be branded with the chain, like the chain, it'll be like the actual brand of the chain. Most of the time, it's a different brand, but they're all in cahoots. Like the people that created the chain are in cahoots with the DEX, like for sure. It's like the main pivotal liquidity point of everything. It's like all the action happens on DEXs. So you have different exchanges like ETH. ETH is the main biggest one that's ever existed. It has all the infrastructure, all the money, all the wallet connections, user interface. It's like the mainland. You have Base, which was created by Coinbase. You have Robinhood Chain, and there's so many that I'm not going to list them all out, but here's kind of like the main ones. You have Solana. Technically Bitcoin's a chain, but no one uses it as a smart contract platform. They just use it to hold Bitcoin. What else am I missing? That's pretty much the biggest ones, right? Right. So they're, they're like, for example, this is a layer 1, this is a layer 2. It's weird, and you don't need to understand the whole technology stack, but Base technically stacks on top of Ethereum. They're, they're like stacked, and Ethereum provides security. Its advantages is security. Base gives you fast transaction speeds and cheap costs. So every land, like when you go to a new territory, let's say you go to a place with a lot of wood. If you go to a place with a lot of wood, there's going to be benefits to that land to where you can cut the wood down and you can use that wood to generate value, right? And make money. Why do people go to new lands? They go to new territories because there's some type of opportunity that that land provides. Does that make sense? So all of these have different opportunities. I would say the main use case for Robinhood is that they're connected to the biggest financial app in the world, which is Robinhood. That's probably the only advantage. And then they're really fast and cheap. That's it. The biggest advantage of Bitcoin is it's the first ever, and they have the most liquidity infrastructure. It's even bigger than Ethereum. The main advantages of Solana, really there are no advantages except for the one time they got a really cool hot meme coin season, and it seems like all the meme coin guys stay on Solana. There is no other advantage, basically. Can you give me another advantage? I just technically The fastest? They say fastest, but the blockchain, if you look at like the proof, their blockchain goes down like more consistent than any other blockchain, which is not supposed to happen. Blockchains are not supposed to go down. They're not. And it goes down like once every Friday. Like it goes down a lot, right? So it's like they claim like fast speeds and cool technology, but it's not that good. So the main real reason I believe is meme coins. They, they were able to birth a meme coin season Last bear market, and since then everybody sees it as like the meme coin chain. But right now what's happening is that's coming over here for sure. Like Robinhood is now like kind of like the meme coin chain from what I'm experiencing. So they all have their advantages and disadvantages, right? And some of them stack on top of each other. For example, Robinhood is a layer one. They decided I don't want to stack on top of Ethereum. I don't want to get the benefits of Ethereum. We're gonna we're gonna do our own thing. Does that make sense? Base is smart. I think they were smart by stacking on top of Ethereum because they get all the liquidity from Ethereum, all the benefits. Go ahead. Oh, it's a layer 2. Do they have a layer 1?

No, they're on Ethereum as well.

Oh, they are stacked on— okay, excuse me, I apologize. So this is actually a layer 2, and this stuff updates really fast. I do not keep up with it, but they are a layer 2 that stacks on, so they were smart. They got— and if they're— if anyone else is smart, if you're creating a chain, that is the sauce. stack on top of Ethereum because they have everything. Solana is a layer 1, and Bitcoin is its own layer. You can't even consider it a layer 1, but it pretty much is. All right, cool. Any questions? Now we can answer your question, which is on these layers, there's literally like we call it— it's not really a native DEX. Native means like it's native to the DEX, like, but it's just you could tell they're the guys. Does that make sense? You could tell like that's the main marketplace. And you can find them. What's the best way to find them? You can go. The best way to find one is go to CoinMarketCap or CoinGecko. This is the best way to find them. I'm not gonna cap and then Gecko. And basically, you can. There's a tab where you can search all of the biggest exchanges. Now, if you want to find the biggest exchanges, big means highest liquidity. So you can see something called the TVL. TVL. TVL, which is the total value locked. That shows basically how much money is in the exchange. If they have the biggest one on the chain, typically they are the main DEX. Does that make sense? Any questions? Simple, straightforward, no big deal. Now, now that I explained all the decentralized world, right, the wallet that you have can connect to any DEX, right? So you can connect to the Solana DEX, You can connect to the ETHDEX, all within the same wallet. I think some will give you support to connect to Bitcoin. It depends on the support. And of course, Base and Robinhood. There's a standard that comes from Ethereum. It's called ERC-20. ERC-20 is just a standard of Ethereum-type coins. So there's a lot of layers that are— we call it ERC-20 compatible. What is ERC-20? And that essentially will allow you to connect your ERC-20 wallet. And some of them are just like, it's getting crazy at this point. Like it used to be like where I had to like worry a lot, but now like you just really connect. Like if you go on like, what's a good wallet? What is it called? Phantom? Phantom like connects everywhere, bro. Like all the chains, like it just works. And then you just switch the network. Does that make sense? Yeah. So that's the part I want to explain. There's a lot. I'm trying to compact everything in one teaching, but the wallets have something called the network, and the network can be switched within the wallet. So in the wallet, let's say I have $10K, it will say literally like $10K ETH, and then you'll see a little logo. It could be the Ethereum coin. You'll see a little logo that looks like a little ETH. you'll see a logo, but you could also have that same 10K in ETH, you'll see the same thing, but you'll see a little Base logo. I don't know how the Base logo is driven, but there's a little Base logo. So it's the same Ethereum, but in this case it's on the ETH chain, but that same Ethereum could be on the Base chain. So you can send, for example, the 10K ETH from Ethereum chain To your same wallet on the base chain. They're just 2 different networks. So you see why understanding all this makes sense? There's a whole bunch of different networks. That money is not only in the— like the— then I guess it is the denomination. It's not only in the actual denomination of the currency, but also the network. Go ahead.

What's the difference between the For example, I have two people. This person sends me ten K Ethereum, but he sends it in base, and I'm receiving it on. I give the wallet of Ethereum wallet. I'm still going to receive it no matter what.

No. So you will, but they will have to switch their their network to.

So they have to switch their network to match ours.

Correct. Okay, let me let me go through a couple scenarios. So we say we have two wallets. We have the receiving wallet. I'm gonna ask some questions, you guys ready? What time is it?

37. All

right, good. All right, so we have the guy that wants to send money to this guy, so send and then receive, okay? So first off, if this guy wants to receive, what does he have to give this guy? An address. What address?

Public address.

Public address, so he gives him the public, okay, great. Now what else does he have to give him? Yes, correct. The amount of like, hey, I want like this much what, right? What else?

And what chain is on?

Network. What network? What chain? Anything else? Correct, the coin. What else? That's it. That's it? That's a trick question. So why? It's very simple, right? Number 1, they need the public address so they know where to send it. Number 2, they need the amount of money they're going to send. Number 3, they need to know what chain they're going to send it on and what coin that they want. It's that simple. Does that make sense? So let's say hypothetically we have, and I might be wrong about some of this, it depends on the wallet, but I'm pretty sure It's right. But let's say hypothetically this guy, he's like, oh great, I gave you my public address. He receives the public address, he sends ETH on the Base chain, and let's say he sends ETH on the Base chain over here, but this guy actually gave him the public address for Ethereum. Let's say he communicated and the text didn't send, and he said, hey, here's my public address for For ETH on the ETH chain. Jesse, what happens?

Technically, in this situation, because Base and Ethereum are EVM, it would work, but there are some situations where it won't work.

Correct, correct. So EVM means what? Do you know what EVM is? Ethereum Virtual Machine. So Ethereum Virtual Machine is the ERC-20 standard. So this is the ERC-20 is referring to the coin type basically, but the Ethereum Virtual Machine is referring to all the smart contract capabilities and the ability for different chains to interconnect. So Ethereum was so big, they're like, hey, we need to make everything EVM compatible, meaning if anyone makes a chain, they can have their own chain, that's fine, but they have the option to make it EVM compatible to where they can connect to us. Does that make sense? So what he's saying is, that's kind of your example, I think you said. So in this case, what would happen is this guy would be like, oh man, you sent it to the wrong network, right? But because Base and ETH are both EVM compatible, all this guy has to do is switch it, switch his network, and the money will be dropped there. So his network will be in this case like on Ethereum. He'll be like, oh man, I messed up. It's okay, I sent it to your Base wallet. Switch to Base. He'll switch it to Base and the money will pop up because it's the same network, EVM compatible. Go ahead.

And if you— now if you have your Ethereum on Robinhood and you send him a Robinhood address, it won't go through because they don't mess with each other,

right? No. So Robinhood, it depends if it's a centralized exchange wallet, probably not, because It depends on how they run their centralization. Centralizations are weird, they do whatever they want, basically. But on a decentralized— because he said it was what? He corrected me, he said that it was a layer 2 that stacks on top of Ethereum. In that case, you should receive it on a decentralized wallet, you should be good.

Okay,

go ahead, Jesse.

It's because all of the EVM, the public address is the exact same public address, correct, for all the EVM chains.

So, and thank you for following that up. So basically, like, in your wallet, right, you have one public address. There's like thousands of chains that are EVM compatible, and they all share the same public address. Does that make sense? Okay, but please do not rely on that. Please. I'm just telling you so you don't freak out just in case you make a mistake. Go ahead.

Can you break down why XRP makes this so hard?

Because XRP is not EVM compatible, or they are in their weird They have like one gene, right? XRP is a layer 1 that refuses to do anything with anybody. There's like a dead network. I hate to be mean, but like it's true. Like, it's like their network is non-existent. They only keep it internal with them, and they're not EVM compatible at all, and they're not ERC-20 standard. And they, like, in that case, if you send XRP to an Ethereum wallet, it's bye-bye. It's gone forever. You can't get it back unless the central— sometimes you can work with a centralized exchange and they might give it back to you. They might like find it and do some weird, I don't know, but like I doubt it. Go

ahead. So they have to send it on the Ethereum— I mean, on the XRP ledger?

XRP, yes. XRP is so weird. I've never— I don't think I've ever sent it. I think I sent it one time in my life, an XRP transaction. So XRP needs to go to XRP, same ledger, XRP. XRP, they keep it all XRP as heck, all right? And then they only got one, so it's hard to mess up. Correct. XRP, you wouldn't have a mess up. The only way, like, I think probably, and from what we've seen in the company, the biggest mess-ups are when you send it to a centralized exchange on the wrong network and they don't— the centralized exchange doesn't— the centralized exchange doesn't support the network. The decentralized wallet will always support it, it just supports it by the standard. But the centralized exchange is super weird how they handle it, and they don't support it.

So where would it go?

Huh?

Let's say you lose it, where does it go?

It's still— so this is a great question, let's get to the next subject. So like, it's based— the technical answer to that is it just stays there until the centralized exchange decides to accept support, and then when they decide to accept support, you can get the money back. But this is how it works, let's get into it, it's gonna get weird. Don't, bro, are you really— I paid $7,000

for this

board, that's crazy. And you're trying to get me to sign up. They got the free, the free access email login. Like, I wanted to keep this too. All right, whatever. I gotta delete one. I'm gonna delete the first one. Okay, I'm not doing all that. Moise's heart gotta go.

No.

All right, one more.

All

right, so now this is where it gets crazy. All right, so we have blockchain. I don't even think Jesse knows this. Let's see if Jesse knows this. Blockchain, now what's in this here? Transactions, we talked about this, right?

Yeah.

Transactions. I hope these are recorded for all the new hires, right? Because there's gonna be a lot. So these are transactions, but if I'm— it's not, I don't believe it's in the blockchain, I could be wrong about this, correct me if I'm wrong. But there's also, remember, we have computers that connect to it, right? Imagine these little computer desktops and they're all connecting to do what? What are they doing to the blockchain?

They're making sure that nobody hacks it?

Correct, they're securing the blockchain through a lottery system, and basically the lottery system pays out Bitcoin, so Bitcoin comes out. Now I'm pretty confident within this, it's either in one of two locations. Within this location or this location, with the actual computers that are securing it, or both—I'm pretty sure it's both—they actually have the full state of what?

The chain.

The entirety of the chain. So when I mean the entirety, I mean from the beginning of inception of the chain.

State or state?

State. The full state of its entire history. So the reason why that's important is because. When I go and I have a wallet, right, in real life, if I hand over cash to Carlos, the money moves from my wallet to his wallet. In crypto, it doesn't move. It just assigns different ownership. So technically, to answer your question, the money stays on the blockchain in the same place it was before. So I'll give you an example. So back in the day, what was it, like rhinestones? So rhinestones, you have one guy here, right? I'm going to put like a little guy. OK. And you have another guy here. And they have this big rye stone in the middle, right? And this guy has broken his leg, and this guy is an actual doctor. This guy owns the entirety of the rock, but it's so big you can't move it. He needs his leg fixed. He pays this guy in ownership of the rock. The rock stays the same place, but the ownership is assigned to another person. So these transactions, although they're recorded, if I send $100,000 to Carlos, the money is technically still existent in here, it never moved, but the ownership was reassigned to Carlos. Does that make sense? That's what I meant by the entire state of all the ledger is contained, I think, I'm pretty sure, in the blockchain, pretty sure. Go ahead.

So like, I remember you said before, that's all Obviously coded into it, right? Yeah. So like, if they know that it has the possibility of getting lost, why don't they like vote to code it in there so it would transfer ownership back to the person if it wasn't accepted by the other person?

Good question. So let's say hypothetically I have one wallet here, I send it to a centralized exchange on accident on the wrong network, right, to another random wallet. The centralized exchange doesn't allow ownership, and let's say it's $10K, $10K lost. So what she asked is, why doesn't the whole chain come together and just change the chain so that the original person can get the $10K back, right? Because it's $10,000 and no one cares. The network is so big, like you would have to round up like the entirety of the Earth to vote on this one small issue.

That's crazy.

Which has happened before, by the way. So it has happened before, there's something called the DAO hack. The first, we're going into history, I'm gonna finish up with this, it's one of the coolest stories ever. So back in the day, in like 2015 when Ethereum first launched, it was kind of small, and they were like, hey, let's make the first decentralized autonomous organization, let's make an organization of people, we're gonna build projects and invest in different things, right? And so they created something called the DAO, I don't know what the name was, but it's like, this is like a great DAO hack. So they created a decentralized— remember we talked about this— autonomous organization, the first one that ever existed. And they did a crowdfund where a whole bunch of people invested in it, and they were like, hey. And I think they got like not even that much, it was like $20 million or $30 million, it wasn't even that much. And so they have this pool of $30 million, and what happened is somebody's super smart, and because code is law, their original creation of the DAO had a bug. And it gave him the ability to siphon funds from this as he will, like as he pleases. As he pleases, he was just taking money out, bam, bam. Everybody started freaking out because it was the beginning of Ethereum, so all the assets were so small, and it was like bad, right? And like, it was bad. Like, it was like half the network of Ethereum's value, because everybody was coming together. And basically, like, they were like, hey, give us the money back. And he was like, no, this is technically law. Like, you guys— The code is law. There, if you look, it was a white hat guy who was anonymous. He would send messages on the Ethereum chain and everybody would uncover the messages and see, oh man. And he's talking to him, he's like, bro, like, you guys are about to destroy the original white paper promise, which is code is law. You made a mistake. The code allows me in the law to withdraw money. This is not illicit activity. According to the conditions that you guys set, you allow me to siphon funds. And they were like, no way, Jose, we don't care. And what they did is they essentially got all together, all the big guys, and they got together and they basically forked the chain. So in these blockchains, if you get enough people together and they all agree with you, you can choose to make a different state of the blockchain and do whatever you want. So in this case, The different state was the same as the original. The only difference is that the money can never be siphoned, and give me your money back. That was literally it. And then now that's why you have Ethereum Classic. Right now, if you go look it up, you have Ethereum Classic, and then you have the main Ethereum. You have the main Ethereum and Ethereum Classic. Ethereum Classic is literally this DAO version, which is identical. and it's just not being supported, nobody cares about it, and it's pretty much a dying chain. And they just forked it, and then they took the $30 million that the white hat hacker took, and they just gave it back to themselves and then fixed the bug. That has never happened before, ever. It only happened one time. Go ahead.

To clarify, we're now using a different Ethereum than we used to.

Correct, which is super weird. You have to understand the severity of that. So essentially, like, For example, that's never happened before on Bitcoin. The original Bitcoin that was ever created, the original, original, original Bitcoin has never been forked. There's been attempts where people have come in and tried to hostile take over Bitcoin, failed, and the original Bitcoin was always adopted. That is not the case with Ethereum. So this is the inception or the inception point that they control Ethereum. If there's enough people to get together, They can do whatever they want on Ethereum, essentially. Wow. It's a lot. So Bitcoin, that's why people like go to it kind of for safety. They're like, oh, um, it's never been hacked. And then we can go into that. It has been hacked, and I don't even want to get into it. But like, uh, yeah, we could tear that apart too. That's why money is not like your god. And like, yeah, okay, you guys get the point. All right, so to answer your question, all the transactions happen within the blockchain itself. I didn't even go on lesson. All right. 3.51, let's ask questions and let's go over it. I have a couple of things here we can continue, but like, let's ask questions. You guys have any questions?

Was that an Ethereum hack? Was that the 51 attack?

In this case, it wasn't. This, this was like a weird hack within the DAO that they got. I don't think it killed the— it wasn't a hack on the chain, it was a hack on the individual. Like, they created a DAO on the chain, so it was a hack outside of the chain, but then they switched the chain anyways. So this wasn't like a chain attack, I think it was like they just, a smart contract attack, which is like, yeah. All right, hold on, let's go into a couple things. So there's different types of wallets, we lost the wallet training here. How do I delete this? I don't know. All right, so there's different types of wallets that you can have, and this is probably gonna be more relative to like, The real questions that people are asking, which is number one, we have hot wallets, cold wallets, cold storage, hardware, software. There's more, but like these are the main ones. So a hot wallet is very simple. It's just a wallet that has access to the internet. That's like your Chrome extension. The reason why they call it hot is because it's literally hot. Does that make sense? It's a hot wallet, like, it's on the internet. If there was a hack, like, that's the most vulnerable type of wallet. Does that make sense? Mm-hmm. A cold wallet is something where, like, a Trezor or like a— a cold wallet would be like a Trezor or Ledger. This would be cold and probably a hardware wallet. It's basically where it's not connected to the internet. It's not connected to the internet, so you can't get hacked. A cold storage is like super security, not connected to the internet. It's like kind of the same thing as a cold wallet. And usually these cold ones are hardware wallets, and then the software would be like a hot wallet. Go ahead.

Didn't Ledger like have a thing where they actually did an identity hack?

Yeah. Okay, so it gets crazy, but like all the— yeah, bro, like that's why I said, like, that's why I said go to the centralized exchange. The way I navigate crypto, I believe, is the safest, most convenient, and the best way. Considering all variables. So yes, the hardware wallets, there's a way that it generates a private key when you turn it on, you click the button, you know, the private key that's super safe and secure that nobody's supposed to have access to. Well, they had access to it. Somebody figured out a way to know everyone's private key that ever had a hardware wallet. I don't know how they did it, but someone figured it out. Okay, so like that means everybody's private key is public. Does that make sense?

No.

So, and then like Yeah, there— and it's like almost everyone gets hacked. That's why I said the way that I do it is I want to avoid centralized entities. So like if there's one place that creates a whole bunch of hardware wallets, that's a centralized entity that has all the customer emails and everything, and that's centralized. Like I'd rather make it on my computer because nobody knows who I am. Does that make sense? Yeah. All right, any other subjects? All right. We went over self-custody. Self-custody is basically like you having the private keys yourself. I'm gonna ask some questions, okay?

And don't forget we have the mic so the live can hear you.

Cool, there you go. Let's ask some questions. Okay, see the bottom here. All right, right now, what is the strongest possible Smart contract layer. Just so you can't answer, and I want to know why this is the smart the strongest smart contract layer.

Ethereum.

Go ahead. Why?

Because the transactions fees are lower compared to like a Bitcoin. Nope. Am I wrong?

It is lower compared to Bitcoin. Yes, but that's not like the main selling point of Ethereum. What's the main selling point of Ethereum?

The amount of Ethereum coins actually out there. Liquidity.

So those are two different things. I would say the amount of liquidity that's in it.

Okay,

so it's the amount of liquidity, the amount of institutional connections, like pretty much the build, the money backing it,

really.

Yeah, like they're just like the oldest and biggest and best. Uh, yeah, by far the best. Like they're the best. So like that means that— go ahead, go ahead.

So was your question asking— so your— the answer to your question is Ethereum, right? Because it's the most compatible.

It's— there's a— there's different variables. Number one, most compatible. Number 2, it's in stores. It's actually in retail markets. They're the most, I guess you could say, penetrating the market. Number 3, there's the most liquidity. Number 4, they have the most developers, the most amount of people developing on the platform. Number 5, I mean, we can go crazy. They have the most apps. They have the most everything.

And it's not Bitcoin because Bitcoin is more complex?

No, Bitcoin is actually, in all of those perspectives, actually even bigger. Bitcoin's original thing is not smart contract. They don't want to make like apps on Bitcoin. They have options for apps on Bitcoin, but they suck because Ethereum literally was meant to be a smart contract platform. Smart contract gives the ability for apps. So all of those things, Bitcoin is actually bigger, but you can't— you could make apps, but they're just like rinky-dinky. Like, they're just kind of like, I don't know if they're really apps. Like, I don't know. No one uses Bitcoin for smart contract.

Got it.

All right, um, now why do people use Base? Come on, I gave a lot, like a lot, and I want to see who's listening. Why do people use Base over Ethereum? Go ahead, same 2 people. Come on, somebody else. Melisse, why do people use Base?

Why they use Coinbase?

Yes, so Base is the— Base is what? It's a layer two. Remember that? So what does layer two's do? Give like

I guess people use base.

You have to believe and it will the answer will appear in your brain. All right. So base. What do what do layer one stack on top? Come on, let's get it. Let's get active. You guys get active. This is the future of money. It gets even crazier than this if we keep going. I'm not going to get into it. I believe that your whole life, you know, you click the button where you click login with email right now with every app known to man, that will switch to the wallet in like 2 years. So the entirety of your entire online digital footprint, everything you currently use, even your phone itself, will be on a digital wallet. Do you understand? Yeah. The market of beasts will come through a digital wallet. Everything digital wallet. So we need to understand. So if you have a layer one, layer layer one here, at least that's Ethereum. Why the heck? Why don't? And then I have a layer two because layer two is base. Why would I use base over Ethereum? What do you think? I did say it in the. It's okay, I know it's a lot of information. All right, the reason I use this is because what does layer— what does layer 1 do? It gives me security, right? It's a big network. What does Base give me? Convenient, even way cheaper. Because it connects to everything else. Yeah, so the fee— the, the stacks on top of here, so it takes the security benefits of Ethereum, but then the fees are like less than a dollar. Like on Ethereum, the fees are like $3 per transaction. I don't know what happened to my board there. $3 per transaction. On here, it's like less than a penny. So it's fast and really, really cheap, and it gets all the benefits from the layer 1. And not only that, but the creators of Coinbase made it, so all of Coinbase's user base is being shot into Base. Does that make sense? Yeah. All right, what's another— all right, we have 1 minute. Any final thoughts, questions? All right, what I want you guys to do for real is take the transcript, ask Victor, get the transcript, put it in Claude, and tell it to quiz you and just learn. Okay? I know these are really high-level concepts, to be honest, but you got to figure it out. I don't know what you want to tell you, figure it out. All right, cool. Thank you guys for watching the live stream. I appreciate you joining. We'll be here tomorrow, 3 to 4 PM Eastern Standard Time. Be easy. Talk to you guys later. Bye. You can end the live stream. Ciao.