We caught up with James to talk Bitcoins, his new book, and what it means to "choose yourself."
BUSINESS INSIDER: What's the book about? What do you want people to take away from it?
JAMES ALTUCHER: My book is called "Choose Yourself!" because it's about the best investment – when we invest in ourselves.
It's about how we live in a word where all the large institutional structures that supposedly supplied "safety" to the individual are slowly disintegrating. The only way we can thrive as entrepreneurs, artists, innovators, or whatever we want to do to live successful lives is to choose ourselves for that success. No longer can we rely on the old paradigms ("school", "corporations", "government", etc) to provide the safety and success we deserve.
In fact, it might be the only way to be successful, whether you want to achieve success in entrepreneurial endeavors, financial, artistic, creative, or any passion that you pursue.
I only advise what I have done for myself and I wouldn't presume to give any advice that has not worked for me. I describe how I hit bottom (more than once. Ha, more than thrice) and how I used the techniques I describe in this book to pick myself up off the floor and make millions. I then give other examples, stories, and testimonials, as well as talk about the economic shift that is occurring now that is forcing people to choose themselves rather than wait for the powers-that-be to reach down from the corporate skies to choose them. That isn't happening anymore.
And yet more opportunities exist than ever before. It's either an exciting time or a scary time. But, either way, it's our choice.
I had a fun time writing it. As a side note: I am very happy that Dick Costolo, the CEO of Twitter, wrote the foreword.
BI: Why make your book only available for purchase by Bitcoin at launch? Why make the paper-dollar crowd wait to buy it?
JA: The kindle and hardcover and audio versions of my book are all going to be available on Amazon on June 3. I like working with Amazon and that has always been my planned release date and I have a lot of fun stuff planned around that date including some surprising announcements and experiments I am trying.
Many people who self-publish right now are simply uploading their files and hoping for the best. I am self-publishing as if I were my own actual publishing company and doing every aspect of this perhaps even more professionally than a publishing company does things. I plan on describing the step-by-step in a separate post on what things I did here that are different than the average self-published (or even mainstream-published) book. So that's why I decided to keep June 3 as the official release date.
That said, the book is ready now, I'm fascinated by Bitcoin as a "Choose Yourself" currency, and didn't think it was a big deal to release it this way three weeks early. I don't expect a lot of people will buy via Bitcoins (I don't think that many people have Bitcoins) but I liked the idea of being the FIRST book in history to be, for a couple of weeks at least, only available on Bitcoin.
BI: Set us straight on Bitcoin – is it only hot for the moment or is it here to stay?
JA: At first I thought Bitcoin was a fad because I kept seeing daytraders gamble and lose money on it. Daytraders should not be daytrading Bitcoins.
But after extensive conversations with a friend of mine, Naval Ravikant, the founder of AngelList, he convinced me that Bitcoin is, in fact, the first "choose yourself" currency. It is not dependent on any one institution or person to bless its success.
He convinced me (plus subsequent research) that Bitcoin has many features that make it attractive not only as a potential future currency but as a replacement for all contract law. In one swoop, any economy that takes up Bitcoin as a currency will rewrite all contract law (eliminating the need for lawyers in 99% of situations), will eliminate the need for exchanges, and make international trade infinitely simpler. A lot of my answers, and a lot of the reason why I did this is based on the conversation I had with Naval plus subsequent research. Additionally, Naval was the first person to buy the book using bitcoin.
Bitcoin is a "choose yourself" currency. So I wanted to make this the first book ever to be for sale ONLY on Bitcoin if you want to read it before the final release. What makes it a "choose yourself" currency?
It is not dependent on any one person (for instance, a Federal Reserve Chairman).
It is not dependent on a government (for instance, a government that relies on a fiat currency).
It is not dependent on complicated central bank operations to have the money transfer from one wallet to another (every wire or transfer, or even credit card transaction) from one human to another in US currency involves the central bank at some level unless it is in small amounts like a cash transaction).
Nor is it dependent on "In God We Trust", a phrase that was first put on coins in 1862 to instill more "faith" in a currency that was potentially in trouble due to war.
Will it be here to stay?
Nobody knows. Ultimately, a government/country acknowledges something as currency if it accepts that currency as tax revenues. Else, it is not a valid currency in that country. Bitcoin is not a valid currency in the United States, just like gold and yen are not currencies in the United States. You can use gold and yen to barter in the US but it is actually very difficult to do so and most people would just as soon do transactions with dollars.
That said, for complicated transactions there are several things which are no longer necessary given current Bitcoin technology: an overlay of contract law (when people do a sophisticated transaction it often involves escrows, lawyers, banks, etc. to complete the transaction) and for international transactions, central banks are involved.
These things are not necessary for a Bitcoin transaction.
Furthermore, there ultimately will be a fixed amount of Bitcoins. This will get rid of the pervasive worry that a government can print its way to inflation, which has happened quickly in some countries in dire circumstances (Zimbabwe, Argentina in the 80s, Germany in the 20s) and more slowly in the US (where the dollar has lost 97% of it's value since 1913).
Whether or not Bitcoin is the "winner" it has several qualities that are going to be important for "Currency 2.0":
- It is encrypted, making all transactions secure and private. A feature our banking system does not have.
- It is peer to peer. Meaning, no bank or credit card company (or both) is involved in the middle of a complicated transaction. No "wire" needs to be done.
- It is decentralized. Meaning, a single bank (The Federal Reserve) cannot control all transactions. Remember Napster? It was centralized and now gone. As opposed to BitTorrent, which is decentralized and here to stay.
- A cryptographic record of every transaction is kept in every Bitcoin wallet. Transactions occur as the network "approves" them, eliminating the need for banks, checks, and all the massive overhead of processing transactions in a fiat currency. Such overhead ultimately leads to inflation, and mindless draining on the system that will no longer occur with "Bitcoin".
For these reasons, Bitcoin is like the "Internet of Money".
Will Bitcoin be the winner? Who knows. But the eventual Currency 2.0 must have the above characteristics and Bitcoin is the winner so far.
BI: Are you familiar with other currencies like Litecoin? What's your take on those?
JA: Very familiar with Litecoin. Litecoin is very similar to Bitcoin but there are small technical differences. However, the primary difference right now is simply that Bitcoin is first and for various reasons that makes it less prone to hacking or manipulation. Since the size of the Bitcoin universe is bigger at the moment, it is much more difficult for one entity to control it. For now, Bitcoin is the Currency 2.0 of choice no matter what Litecoin does.
That said, I do believe PPCoin (#3 in transactions after Bitcoin and Litecoin) has some significant differences and I will be adding PPCoin functionality within the next week.
BI: Do you personally own any Bitcoins? Ever bought anything with them?
JA: Yes, I bought my own book with Bitcoin. I haven't bought anything else with them. I prefer to horde them :)
BI: Are people wise to be dumping money into digital currencies right now, or has that ship sailed?
JA: I don't know if it's wise or not. Three types of people ask me about Bitcoin.
Technology people who want to know if I think Bitcoin is technologically sound (it is) and unable to be hacked/stolen (it isn't, if you keep your own wallet key(s) secure).
Libertarians who want to know if this is Gold 2.0 (it could be),
And daytraders. Daytraders are the only ones who should not be thinking of Bitcoin at all. It does make sense to look into digital currencies as a long-term replacement for "normal" currencies. But if you think there is only a one in 1,000 chance that Bitcoins can replace the US dollar, then only put that portion of your net worth into Bitcoins.
Daytraders, however, have no way of valuing a Bitcoin or the direction of Bitcoin's price. It is pure gambling. It is volatile. It is stupid to trade Bitcoins. It is just as stupid to daytrade Bitcoins as it is to daytrade stocks or currencies, which are totally rigged systems whose day to day movements are beyond the capabilities or machinations of most daytraders sitting at home.
JA: Of course. With Bitcoin it is very easy to keep track of all the transactions. Every transaction is forever stored in your wallet. Additionally, in my logs I am converting everything immediately (on paper) to dollars at the second of transaction, so I can see the profits. Assuming I make some money on people buying the book via Bitcoin, I can easily convert Bitcoin prices to dollars and declare any profits on my taxes.
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