In our final episode, Peter Rex shares how he’s using blockchain technology to disrupt real estate and other sectors – all part of a broader aim to expand access to capital. We discuss the rewards and risks of tokenizing real estate, the importance of smart contracts and street smarts, and how to level the playing field for earning wealth.
Guest: Peter Rex -- entrepreneur and Harvard Law School grad who is the founder and CEO of Rex, a technology, real estate, and investment corporation in Austin, Texas.
Immutable: Episode 8, with Peter Rex “Rethinking Real Estate”
Josh Burek: This is Immutable, from Harvard Kennedy School’s Belfer Center for Science and International Affairs. I’m Josh Burek. In our final episode, we hear from Peter Rex. He’s an American entrepreneur and Harvard Law School grad who is the founder and CEO of Rex, a technology, real estate, and investment corporation in Austin, Texas. Peter shares how he’s using blockchain technology to disrupt real estate and other sectors – all part of a broader aim to expand access to capital. We discuss the rewards and risks of tokenizing real estate, the importance of smart contracts and street smarts, and how to level the playing field for earning wealth.
Peter Rex, welcome to Immutable.
Peter Rex: Josh, great to be here.
Josh Burek: Peter, a quarter century ago, you and I could call our broker and ask to invest in Internet companies like Priceline or Yahoo. If we made that call today that our broker would probably laugh at us because every business has some business activity online.
I think we may be seeing a tipping point with blockchain technology today in the sense that the idea of investing in blockchain companies may be a moot point as more and more businesses understand the potential to leverage this technology. That’s one reason I’m really excited to talk with you. A lot of my previous guests have very specific financial services or crypto expertise.
You come at this from a different angle. Your background is in real estate, technology, law, and yet you’ve seen a lot of potential to grow your business using blockchain technology. Talk to me about your journey into this space – and how you are thinking about this, not from the blockchain out, but from the industry in?
Peter Rex: Yeah. So Josh, to give you a quick backdrop, help you to better understand how I found my way into using blockchain, leveraging and seeing it as a big opportunity. And I think you touched on a lot of the factors that would really almost make this seem like an almost obvious outcome that I’m actually building a blockchain-based product, which is selling real estate, leveraging the blockchain, or actually allowing people to tokenize real estate on the blockchain itself.
But more broadly, what I’d say is, to give a backdrop, who I am, what my background is, and why it’s appropriate. Yeah. I have a law degree from Harvard. Right. But also I have a CPA, as well, which I did while I was still at Harvard, as well. But this, in addition to that I was 16 years in entrepreneurship, in real estate and technology.
And right now I have 10 technology companies that are attacking the real estate space. Using cutting edge tech, including blockchain on particularly one of them. And also on a second one, now we’re going to be leveraging the blockchain, as well, which I can get into separately. But so that’s kind of the backdrop.
And I think actually to really understand blockchain, well, you need to understand the legal side of it. It’s good to understand the accounting side of how it can add value. I think that the CPA understanding has helped me and actually ironically, my, my background in college, I’d never studied or opened up a business book ever until I got out of college.
I just had read liberal arts, sort of Straussian technique, right? I studied everything and graduated, you know, double major at Georgetown in political philosophy and philosophy. But really it was, I used to say I was educating myself despite being at university because I was reading a lot of different stuff, you know, trying to learn things.
When you look at blockchain, I really think you made a good analogy there, Josh, and you hit it dead on, which is the analogy to the Internet. And I think when the Internet came around, a lot of people didn’t really understand it.
Right. But they could see that it was doing something interesting and that it could be used for something. Now, on the other hand, there was other folks that were just hyped up about the Internet for its own sake. But the Internet was really a tool. Now it is an accepted, obvious tool that is now readily available for everyone.
Right. And in the 90s that wasn’t the case. There was an old interview of Jeff Bezos and it was like in 94 or something like that. At that point they had interviewed him and they said, you know, what is the Internet? And he started trying to explain it. And then he started laughing.
He said, you know actually, I don’t even know. And he said, but I know it’s growing like crazy. And I know that my idea is to sell books on it. And that makes sense. So he didn’t quite understand it. It’s not that you necessarily need to understand it fully, but more appropriate is to understand how can you use this tool?
Josh Burek: Yes. I think Jeff got to the idea that it’s not important what it is; it’s what it can do for us. On this program, we’ve talked about the metaverse and digital real estate. One of our guests talked about Snoop Dogg selling digital land, but you’re talking about hard assets. Real real estate, but with this technology. Talk to me about the intersection of those two things. How does that work?
Peter Rex: The metaverse, which I think will be beyond the scope of this topic of what we’re going to be talking about here is not an area that I’m actually doing anything in yet. I’m keeping my eye on it though. I am actually in the real-verse and I have about a billion dollars of assets still. I bought a couple billion dollars of assets in the downturn of the GFC, the great financial
crisis. And I had accumulated a portfolio that I sold about a billion or so around 2018, 19, 20 or so.
Right. So still have a bunch of assets and I spun off a separate company as well. That’s also growing, that’s a spinoff outside of it that just does management services, leveraging technology. And that’s been taking off and doing really well. I’m in the real-verse and I’m looking at the real-verse and I’m trying to apply technology to the real-verse. And when I look at them, the metaphor is I think, Hmm, I’m not sure if it has the characteristics of scarcity that I’m looking for and we don’t have to get into that.
But we can talk about Bitcoin as well, quickly. Cause that’s almost a bit of a metaverse type thing in a way. Cause it’s meta-gold, cause that triggered me on blockchain back in 2016. When I read the white paper, I read the white paper itself and I thought, man, this is brilliant.
And I put money in escrow at that point. And I just said, when this thing crashes, or there’s a good dip, I’m going to have my wife move it in.
Josh Burek: You’re reading the white paper; you mentioned the Straussian background. What was it about that white paper that resonated with you?
Peter Rex: That kind of gets into how I learn. Right. So the only thing I knew coming out of college was I knew that I could learn stuff because I knew I could grasp concepts. So I continue to try to use that in the technology area, but I read the white paper and I would encourage people to read it as well.
It’s fairly short and when you read that, you will understand the, when you see genius, it’s often when you take something that’s almost obvious, disconnected and used in different ways and you connect them in a new way to do things. And that’s essentially what they did.
Cause cryptography, we already had. Cryptography was already going on. Right. And we already had distributed computing, but no one actually combined the two to hash information using distributed computing in order to preserve record-keeping essentially. Right. So, and maybe they were doing that in a small way, possibly.
I’m not sure, but no one definitely did it where they then combined also creating something that would create scarcity, because it would almost want a clock where it would start to run out of the amount of coins that it could create. And that’s really Bitcoin. Right. And that’s how it was set up and right away, when I read that, I realized, man, this is fairly impregnable type of concept.
Now I’m not saying it won’t go down. Who knows? And my, in my judgment, I think it will still be here. I also think it sort of has the category king right now of coins. So I think that is very valuable. It’s almost like it’s like Coca-Cola right. It just tends to be still valuable even after over a hundred years.
Right. So I think Bitcoin has a category kingship right now. It could be knocked down who knows, but also the concept also has built in scarcity into it. So that’s what attracted me to it. But within a few weeks, I’d say of after reading. I both had the idea to invest in Bitcoin when it crashed, which I did around the three thousands. It crashed big time in 2017 or 18. I remember in Thanksgiving cause I got a text message from a friend of mine. And he is actually a guy that went to Harvard Law School. I mean, he texted me to say that I was wrong about the coins. OK. You know, he obviously was setting up a straw man argument against me.
And I said, you know, I wasn’t into all the coins anyways. I said Bitcoin. And he said, well, that’s really down, too, it’s probably going to go under all of them. We’re going under there. I think there was like 300 coins went under in the next three months. So I set out actually, you know, I appreciate the notification cause I’m going to go ahead and buy Bitcoin and I don’t think it’s going under.
So I just told my wife move, move the money in from escrow and buy it. So, and we did and that’s done well. And I texted some of my friends to tell them to do the same thing, but none of them did because everybody was scared at the time. Right. So they thought, man, everything’s going under.
Josh Burek: Be greedy when others are fearful, right?
Peter Rex: Right. Yeah. I mean, when you’re right and they’re wrong, which is fairly rare, but basically within a few weeks, I also had the idea of doing that to real estate. So, I have a company called OwnProp within the portfolio of 10 companies that we have that are attacking the real estate industry using technology. That’s one of the 10.
Josh Burek: Let’s unpack this for a minute, Peter, because for centuries, real estate has been a signature vehicle for building wealth, for building capital. At the same time, there are high barriers to entry. It’s been exclusive in some regards. Any kid who’s played monopoly knows: Boy, if you can get your hands on Park Place, Boardwalk, you’re sitting pretty.
Talk to me about how this technology, or in your business, you’re trying to democratize access to real estate investing, to this powerful vehicle, to make it more widely available.
Peter Rex: Real estate is tremendously valuable as an asset class, as an investment class, right.
We look at real estate as a pure investment, though, apart from even home ownership, right? That’s been, you know, 90 plus percent, I think of the world’s millionaires, get it from rural estate. So we’re talking, this is a really valuable asset class. And to date, it has been an asset class that the poor and the working class have been largely cut out of.
And this goes throughout all of history. You know, one of the three triumvirate with Julius Caesar, I think it was Crassus. He was the richest man in the empire. Right. He had made his
money off real estate. So real estate has always been something very valuable. You go to any country right in the world, besides the ones that are totalitarian communist, where the government basically owns everything, but even in China, it’s like this. Cause I’ve been to over a hundred countries. On one trip, I went to 85 countries alone and I had over a thousand meetings. So I have a lot of intel on how people think in different countries, but you go to any country, Hong Kong, and any of these places you go to, you will see there’s a fascination with real estate because it’s a generational knowledge.
It’s almost like tribal knowledge. Everyone knows if you own that. It’s a compounded return over the long period. And it’s a good one to pass onto your kids and your grandkids, because if you give it to them, it’s not like cash where they could take it and be like, oh, I got this cash. I’m going to go, you know, buy a car.
It’s you have this investment, it’s illiquid, but it’s here for you when you need it. You have to go through a bit of a process of trying to unlock it, but it’s there. Right? So it’s very, it’s very secure, very good long-term investment. Yet, it’s been largely the luxury of the rich to participate in that.
And that’s one of the missions I’m on with this particular company, OwnProp, which, like I said, it, one of the 10 companies we have in technology that are attacking the real estate space, because I’m all about the rich doing their thing and getting richer. Great. You know, one of my models is live abundantly.
I want people to live abundantly. But I want to unlock the opportunity for everyone else also to participate in this wonderful asset class of real estate. Now I’ve made a lot of money off real estate, as well, but I came up, I was working class background, my parents were teachers.
So I had to really grind and hustle like crazy to get in and grow and come up. Fortunately, I did a lot of my coming up in a very tough time and the great financial crisis where it was impossible to get any money. So that in a way put me as somewhat of a scarce person out there, a lot of the other entrepreneurs were knocked out.
They were just, you know, bankrupted or out of the game. Right? So I was still in there hammering away, trying to get capital and buy deals that ended up being a very good time to do it. A very hard time to do it. But if you had the grit, determination, I was able to push through, but that type of sacrifice is way too much to be able to participate in the upside of this.
And with the blockchain, the way I see it, the key thing here is you can take the blockchain and you can tokenize real estate assets. And we are already doing this. You can tokenize the assets, leveraging the blockchain, and you can then lower the minimum investment. And that’s the key thing here is you lower the minimum investment to be able to get into this asset class for anyone that way. Because right now, so if someone wanted to invest with me right in real estate, generally, I would say million dollars.
Right. Just because the overhead and all the paperwork and everything else associated with it is just so much. Just tracking everything and knowing that you could track it appropriately and it’s accurate, right. Because you can’t get it wrong. You get it wrong. It’s just like, you’re out. Right. You can’t mess up these things.
So with leveraging the blockchain, as long as you put it in correctly, it’s immutably recorded. And then the transfer of those assets is also, you have provenance, you have title history, you can see that. That is key. So this is, this goes to the accounting background. I think possibly that I have, by the way, ironically, I never practiced law or accounting, so maybe I just wasn’t going to be either one, but entrepreneurship is my thing. But understanding how that the importance of accounting and record-keeping throughout all of history and also today.
And that this is really what blockchain does. It’s a transformative tool for accounting and record-keeping. So when you can figure out an application of that, where it helps you to drop down the costs more securely and verifiably know what was recorded, and for sure it was recorded and passed on to another.
Boom. There’s an opportunity, right? So what is that? That’s exactly real estate. So we bought a hotel in downtown Austin called Hotel Ella. This is an iconic asset in downtown Austin. I bought it a few months ago. That asset will be, you know, it’s being tokenized. What we’re doing there is we’re allowing the investors to then be able to sell their interests down to a thousand dollars.
And we want to get it down to a dollar. That way we can have someone who works at the hotel, you can buy interests in the hotel they’re working at for a dollar, 10 bucks here and there a hundred bucks, because then they get a secured interest in something that compounds and grows. Long-term, alright. So this is a huge concept.
Josh Burek: And I want to unpack this a little bit with you because there’ve been other large scale national scale attempts to create ownership. I want to go back to the George W. Bush presidency. Big theme of his presidency was the ownership since. And we saw the central bank and regulators make lots of efforts to bring more people into the home ownership process.
But along the way, I think that came with some costs. And I think perhaps there was some confusion between creating ownership and creating indebtedness, right? The idea being not setting people up to fail. The great financial crisis was a multifactorial event and I’m not pinning this on one presidential set of policies, but I think there’s an opportunity now to create ownership without massive indebtedness through tokenization, through fractionalization.
Have you met with people who had been excluded who are now able to get involved, thanks to some of the disruptive technologies that your businesses are creating?
Peter Rex: Yeah. I mean, I work with people that are like this right there in my companies.
They’re family members of mine that I, you know, grew up with. Right. So they’ve been excluded from being able to get in to the access, to investment in real estate, because they don’t have a large enough ticket size to get in. But they would love to be able to participate.
I don’t even see them as just real estate. They are precious jewels. Like an iconic asset in the downtown of Austin is a precious jewel. Austin is the fastest growing city in the country. You get a prize piece of property in that area of the core. They’re not building around there. We’re two blocks from university of Austin, Texas, which is the flagship for there.
There’s a lot of money around there. You really can’t go wrong in the long run and in 10 years that thing’s going to be worth a lot more.
It’s a very secure investment to be able to unlock that to the people that work there they can get in. That’s going to be a game changer. And I’ll tell you one thing that’s holding us back there and we’re just going to riff on everything here. But one thing that is holding us back is the accredited investor laws.
You have to be a so-called accredited investor to be able to participate in an investment, according to the SEC. Now there are some exclusions. But generally speaking, this accredited investor thing blocks out anybody who is not pretty much rich or has a really impressive income. So that essentially is what I would call a patronizing law. It probably comes from a good place, but it’s patronizing because it says, Hey, we’re so smart. We know better. You’re not rich enough. AKA. Smart enough. Yeah.
Josh Burek: Yeah, you’re not eligible.
Peter Rex: You’re not eligible. Cause you don’t got the money, which we correlate to mean that you’re probably not smart enough to make your own decision. These rules were set up probably coming from a good place to prevent people who have less money from losing their money. However, in effect, what we have here is we have the poor, the working class, and the poor are just not gonna be able to get richer.
So you have the rich getting richer by systems that are set up and laws that are created and enforced by the SEC. And I’m not trying to blame the SEC or blame anyone. I’m just saying here is a problem. An opportunity is to figure out a different way forward, because if we can open up to retail investors, anybody on the street, the people who work at the hotel, let them throw money in.
How do you know that they don’t know better what’s a good investment? A lot of times the man on the street knows what’s up. He’s actually got street sense. He’s street smart. This is something, you know, I went to Harvard Law School, you know, and when I’m there, I’m thinking, man, these guys are brilliant. I know guys, I, I grew up, but they didn’t even go to college and these guys are street smart.
They know what’s going on. I remember when Trump was, you know, starting to pick up in the polls and I thought, no way, this guy’s going to be winning. Right. And I was actually in other countries and I was meeting with some folks there and I told them, Hey, don’t even think about it. Don’t worry about it. This guy was in reality TV. It’s just funny. You know, I don’t even think he’s serious. And then I go talk to friends of mine that I grew up with and they said no, Trump’s going to win. And I was like, what, what are you crazy? And they said, nah, he’s going to win. And I said why is that?
Everybody I talked to there, they’re going to go for Trump. They want to turn this thing upside down. So I said what the heck. So you can see the person on the street right there had more street sense than me. And I grew up with these guys and I think I’ve been too much in the books, losing my sense.
Josh Burek: So from the perspective of the people on the street, leave aside the regulators, what risks should they be thinking about as they think about the many new opportunities that they have to invest in companies like yours in many other companies that are springing up? Some of them, frankly, are scams. Some of them frankly have bad actors. But there’s also some incredible opportunities here. How should people, what mental calculations should they be making as they think about some of these non-traditional ways to invest their hard earned money?
Peter Rex: Here’s a key thing, right? Is you gotta think about what is it that you are buying with your money. You know, consumers that are out there, they’re smart. Right? They’ll figure out a product’s not good. They won’t buy it.
They’ll go to a restaurant or they won’t even go they’ll know if it’s good or not before they even get there somehow. Right. So use your sense, use your judgment, find out what other people are saying and figure out what is the value of this investment? Is it backed by assets? If there’s not assets, what are the scarcity?
What does it value giving to other people? If it’s giving no value to other people, how does it generate value back? If it doesn’t have assets backing it, then what is the actual value if there’s not scarcity? So Bitcoin has scarcity built in. So it’s naturally going to be sort of like a digital gold.
I don’t see it as a transactional currency. I see it as digital gold. So when you’re buying something on OwnProp, what are you actually doing?
What are you investing in? Are you investing in OwnProp the company? No, you’re not. Actually, what you’re doing is you are investing in that particular property. So if you buy that hotel, you buy a token. You own that asset. Your investment is backed by that asset. You own that asset.
That’s what you own. You don’t own blockchain. You own that asset. Blockchain is a tool. It enabled you to buy that asset and get in there at a low investment minimum.
Josh Burek: So just like somebody on the street can buy .0002% of Apple with a share or a fractional share, somebody could now buy a portion of this premier hotel in Austin.
Peter Rex: Exactly. And this gets into how do we see blockchain? What, what really is it? How do you see it from the outside? If we just take a look at it instead of trying to get in the guts of it and understand that. You know, I don’t understand how the combustion engine works, but I get in the car and drive it.
Right. So I understand what it can do. So what is it that blockchain can do? We know that blockchain can drop costs dramatically and while it drops your cost dramatically, it also verifies even better than your costly structure currently to verify transaction. It does it even better because it does what they call immutably.
And what does that really mean? It just means recorded across, you know, thousands of computers and hashed. So essentially it’s very hard to crack. It’s basically impossible without supercomputing, which is not really there yet. So it’s a very low cost, it’s an extremely, extremely 10x, 100x low cost way to verify a transaction definitely happened and landed in someone’s hands. That, that this person gave it to that person or whatever happened happened. Right. So that is what the tool is. So let’s go back to the Internet. What is the Internet? It’s a place where you can find, you know, search and you could communicate with people that is say in the ether, right?
It’s something that is connected via networks that enable people to buy and sell goods in a different way, because before they could communicate, find, and search, but they have to go down to the local mart, walked on the street, right. But the Internet allowed them to do that in the ether, allowed them to do it using the Internet connected devices everywhere, allowed people to connect socially, interact, find search, discover things. And for people on the other side of it to offer things as well. That enabled people like Jeff Bezos to sell books, using the tool called the Internet, but he wasn’t selling the internet.
He was selling books. We’re not selling blockchain. We’re selling real estate. Josh Burek: Yes.
Peter Rex: That’s what’s happening.
Josh Burek: Yes.
Peter Rex: You follow what I’m saying there?
Josh Burek: Yeah. It’s a huge distinction, but you’re not just doing real estate. I understand you’re also making some, uh, gambits in the data security space. Can you tell us a little bit about that or some of the other, you mentioned OwnProp, just one of 10 companies?
Peter Rex: Yeah. We have another way that we use the blockchain as well, but very differently. And that is smart contracts. Effectively, we are enabling using smart contracts transactions to happen that are just too costly for us to monitor. And therefore are very cumbersome for our entry-level folks to track and monitor and keep up with, and we can’t use lawyers on it. So what we’re doing is we’re automating things using smart contracts. So allow people in the real estate space to transact very fast when there’s multiple parties involved because multi-party transactions gets a little confusing.
Like if I need to get something done, for example, Josh, and I said, Hey, you know, I got to do this in order for me to do this. I got to get Josh to sign it. Then I got to go get, you know, this other counterparty that is not actually on the same page as Josh, that is on the other side of the table to go sign it.
Then I gotta get Josh’s boss to sign it. And then I got to make sure that it’s reviewed by corporate and they sign off.
Josh Burek: So disintermediation is one of the great themes that this program has been discussing. The Internet obviously wiped away, uh, most travel agents. I think this technology could disintermediate so many other fields, including traditional banking. This is not an attack on the legal industry, but I think you’re pointing out that in most cases, do people actually need to hire a world-class law firm for some of the transactions that they’re undertaking?
Peter Rex: The world-class law firms. They will persist. The reason why is because you’re always going to need a really smart attorney because every new technology you come up with creates new issues. You didn’t think about before even applying it.
It’s like, oh man, I’ve got to, it’s almost brain surgery level thinking, right? It’s fairly difficult to think about all the legal issues that erupt from a new application. What we’re going to definitely eliminate on this other application where we’re using smart contracts is we’re going to eliminate low level effectively legal work that is being done by people who are not even lawyers. It’s not legal work where you need to be licensed to do it, but it could be you’re signing a document and you’re not even talking to your attorney, but it is a legal work that you’re doing for yourself. You’re signing something, right? That’s a legal document.
The other person’s signing, as well, but there is no oversight for the people that need to have the oversight, except that they had an attorney in the room, but that doesn’t make any sense to do that. It’s also not fast. Because we don’t have an attorney and other people don’t have an attorney in these small, these are micro-transactions effectively, right?
No one can afford an attorney and microtransactions where you effectively have is layers of low level labor that are going to be eliminated. And that’s very good because then what happens to humanity? It gets elevated. That’s one of our mottos: elevate humanity. Well, why does it elevate humanity? Because now you, don’t got to go in the field and plow with a stick or whatever.
Right? We’re going to have tractors, we’re going to have things that do that, these are power tools. Now those same folks can start, you know, using higher-level faculties, their brain in different ways, their more creative unlocking what is unique to humanity. The unique part of humanity our ability to intuitively decide things. That is the one thing machine learning cannot has not had any progress on; zero.
Yeah, there’s a good book by the founder of AI. And his name is Herbert Simon, he talks about how he got it going and the struggles they’ve had. And there’s really two different parts of artificial intelligence. One is this part that is pattern recognition and that’s where they made all their progress.
And on the other side, which is the intuitive intelligence – zero progress, but he kept lamenting like eventually we’re going to get there. I watched a thing where he was speaking and he was much, much older and he, and he was bringing it up that we’ve had zero progress still. I don’t think there will ever be progress and intuition. I don’t know what it is about humans, but there’s something about the spark of their intuition, it’s magic.
Josh Burek: I wouldn’t trust a supercomputer to be witty or tell a joke.
Peter Rex: Yeah, that’s probably true. The machine learning what it is particularly good at much better than human is it’s very good at rote work and things that are monotonous, sort of these microtransaction type things I talk about and overseeing that, that it’s very good at, and this is not machine learning we’re using there.
But what we are using, there is more of the smart contracts, because if we can immutably record and we know that this person signed it, and then afterwards, that person definitely signed it sequentially. And we definitely know they signed, then the other person also signed off on it. We basically know verifiably in a very low cost way that that was executed correctly. And that is an application of blockchain. That makes sense to me because we’ve gone through a lot of application thoughts of like, how could we apply it in different ways?
And there are some good ideas about it. Now the best idea, pure play is the one I’m already doing with the real estate that I mentioned to you. That is the biggest idea I have using blockchain. Now the other one using smart contracts, that’s a good application. It makes sense to me, but it only is a very valuable tech company in that I’m using that but I’m also combining it with a few other cutting edge tech things as well to make it much more of an interesting play.
Josh Burek: Let’s zoom out on the motto you shared – elevate humanity. In addition to being a lawyer and accountant and entrepreneur, you’re also a man of faith. So I’m going to ask you two related questions on this.
The first is, do you see potential for blockchain technology to impact the world of philanthropic giving? And the second one is this dualistic nature of technology. The iPhone is a marvel. It has given so much power to people to connect, share, and access information on the go. At the same time, screen addiction is a real issue, and we’ve also seen that these tools can become weapons in the hands of middle schoolers.
I have two kids in middle school and I’ve seen the social damage again that a tool can do. How do you assess this dualistic risk and upside of something like blockchain technology? We know what it can do for us, but is it good for us?
Peter Rex: Yes. I think it is very, very good for us. We talk about social impact, right? And that’s extremely important to me. Actually, people don’t understand this cause I’m a tough business guy and that’s mostly a side people see of me as the outside because in order to win a business, you’ve gotta be really tough. You’ve got to make the tough calls that you’re put in charge to make.
And you’ve got to, you’ve got to make products that people want. You’ve got to, whether it’s an investment product that people it’s going to make money for them. You can’t lose people’s money. You’ve got to be on top of everything really carefully. You know, I call it tough love, right? It’s the only form of love, actually, even with my own kids, right. But it’s because you love the people that you do that. Right. And when we think about blockchain, you know, think about I bring up all these problems in our, you know, here in the USA and also in the Western world, really where there’s a lot of money, even as the areas where there’s a lot of money, the rich are getting extraordinarily much richer than the working class and the poor, which is a problem.
The problem is not that that’s happening. The problem is why is it happening is because the deck is stacked unfavorably in favor of the rich, because the rich are allowed to participate in these illiquid opportunities that are very valuable and the work class and the poor are not, and that is the problem.
Now, if we have a deck stacked favorably and the rich still get much richer than the working class, I would say the problem is the working class is not hustling enough, but from what I’ve seen, they are hustling. So like the deck is not stacked in favor of them. When we look outside of the USA in the Western world the application of blockchain is much more impactful to elevate humanity.
When I look at these other countries, you know, we look at Sub-Saharan Africa, you look at these other places, right. That are coming from a much lower base. And these people are just lovely people. I’ve been to, you know, eight, nine countries in Africa and they’re beautiful people and they’ve got big hearts and they want to come up to, and they’re very smart.
I mean, they’re just as smart as us, except they’re hungrier. So when they have access to books, they’re reading them hard, because they’re hungry to come up, they want to succeed.
And they want to use the time they’ve been given to, to come up and they’re going to come up and blockchain is going to benefit them far more than it’s going to benefit us over here will benefit us, as well, which is what I’ve been talking about, but it’s going to benefit them even more. Why? You think about the access to a property like, you know, Ella, this hotel I mentioned to you, well, what if I can open it up that a person in Africa can go and buy a piece of that? Well, if they put a hundred bucks in there, that means a lot more to them because most countries, the currency, you know, essentially is inflated heavily.
Josh Burek: Zimbabwe, Argentina: devaluation is the rule, not the exception.
Peter Rex: Yeah. I remember in Myanmar, I go to exchange like a hundred bucks to get some cash in their local dollars. And they hand me like all these stacks of money and I don’t even know where to put them, I’m like stuffing down my pants. So then I’m going to get in the cab and the cabs like, oh yeah, give me, you know, X amount of money and I’m handing this wad of money.
And he was like, Hey, you should’ve just used American dollars. We love a dollar. So, well, why do you love a dollar? Because it doesn’t get inflated. So it’s worth a lot more than their money. If the dollar is worth, you know, maybe 98% of itself the next year, their money can be worth 70% of itself. So they could be losing 30%.
Now, imagine if you’re trying to come up and let’s just put ourselves in their shoes and you’ve got. And you have dreams for them and you want them to move up as well. And you want to put them in good schools and you’re working every day, like a crazy person, working a lot, right. For them. And you can’t actually move up and you can’t get them in schools.
Why? Because your currency you’re getting paid in is worth less than next year. You’re just on a treadmill. You’re not going anywhere. And they don’t realize that some of the people, cause there’s almost a government trick in a way, they kind of realize it in the street sense, but they don’t realize what’s really going on here is the deck is stacked completely against them. And in favor of the government who just continue to print more money and inflate their money. And this has been a problem throughout the history of the world, right? There’s this basically asymmetric situation where you have the government and the people
Josh Burek: When you don’t have integrity in currency, it brings everyone down.
Peter Rex: Yeah. And the currency never really has full integrity throughout all of history. It’s always been inflating, but especially in these countries is worth far more than this for us. I mean, even a real estate is a great hedge against inflation, right. I was going to sell some of my assets, and then when COVID hit, when Trump started printing money, I just, boom, stopped all
sales and held. Cause I said this is going to cause massive asset inflation, which it did. I mean, everything went up like 30% in the next year and a half. Right. So, I mean, we had Florida and Texas assets, so they just boomed.
You look at these countries, you look at, you know, Sub-Saharan Africa, Myanmar, a lot of countries in Latin America, a lot of people that are trying to come up, smart people, good people try and move their families up. Blockchain is going to allow them to do a lot of things that they cannot currently do, for example, store wealth. Take that dollar that they’re getting paid and immediately, boom, own a piece of real estate. And then immutably on that real estate. It’s going to go up, store that wealth, and then they get the next dollar next paycheck, boom, throw it in fast, get it in their store. Let it grow in a place that’s secure. This is huge, huge, huge game changer. It’s also something I bet you there are governments might not like for whatever reason, because the more you can give people that’s real property, by the way, that’s property. When you can build power like that, the more you can empower the people.
Cause I’m all about power to the people. The more you can power up the people, the less the governments tend to like it, right? Because there’s a power grab at the top where they, if you can keep the people down, you keep them subservient, and you can do what you want to get away with whatever you need. You can kind of milk them basically, right?
Ultimately this is a cancer. It falls apart on itself. You want to be powering up the people, give the people property.
What is the number like one of the best ways to have power against the government is to have property, you know, it’s the power to the people because if they have property, they have power. So this will empower them. The other thing is you think are these countries, they go to, even in their own local countries, they want to own a piece of real estate.
Right? Well, how do you know, they actually own that piece of real estate? They don’t have Western laws. They don’t have the accounting offices that we do. The recording offices, the title agencies. They don’t have title insurance who the hell would insure title over there, any crazy person. I would never insure title over there.
It would just be massively costly. You can’t trust anything over there. So you go on a piece of property over there and it’s been sold five times underneath you. So who actually. It’s I guess might makes right.
So who owns it as a guy who knows the judge, maybe. That is not a system that you can actually store wealth and grow it. And it’s also not a set system that you can protect your own property. So blockchain though, if you start to move that off of their local system, onto the chain, it’s out of.
And then you have provenance on title and you can have security and, and I’m not making these things up. I’m telling you anybody that maybe is listening that has been to these countries
or knows people that’s from these countries, they’ll tell you that things will be sold a hundred times sometimes.
Yeah. My, one of our guys on our media team, he shoots camera and he was, he was telling me after I was explaining something to someone, he said, man, you know, you don’t know how true this is in Mexico. My family, he said, owns a piece in Mexico from my dad. And they came over here as seasonal workers. And that’s where he grew up in the states.
Awesome people, super talented. Tells me about this. And this shows how smart this dude is. He says in Mexico, you know, they, he goes over there and they’re trying to reclaim, they try to, you know, say, okay, we’re going to put a house on here that they’re trying to go about building a house. And they are a cease and desist.
You can’t continue. What’s going on. You guys don’t own this. And they said, what, we do own this! Here’s our title. Here’s our proof. It turns out there’s just a whole cabal, right? I think it was sold 17 times. Different people sold 17 different times. So eventually they had to buy it back because it was a family kind of almost like an heirloom equivalent.
So in order to reclaim it. So, I mean, it’s just, this is a case in point.
Josh Burek: Wow. Well, I think you’ve very well articulated some of the transformative potential. This technology and exciting to see how you’re trying to personally build your business around it.
Peter Rex: It’s the best things that create the biggest problems, right, at times for us. Think about, you know, just human sexuality, right? Think about food. These are great things. If you’re not careful with something that’s. All of a sudden it becomes a bad thing. Right. And then it hurts your health. That hurts. It hurts humanity. Right? So, but it is a good thing, right? It’s a good thing.
Food is how we nourish ourselves. Humans tend to commune with food as well. Right? So it has community gathering factors. It also helps us to flourish the two awesome things. The iPhone. It helps us do a lot of things we couldn’t do before move around.
You know, I was connecting with you, I think via text before we got here with one of my assistants, right. So allows us to move on the, go, make moves, make decisions. Awesome. However, it’s got its own dangers. The endorphin pops you get from it can I want to become a bit of a drug addiction, right?
Almost like food, right? You’ve got to limit it. You can’t allow that to take over your life and you have to allow it to be something that opens up the beauty of nature and opens up things to you and opens up people. And you get together with folks rather than closing you away. So in other words, this good thing can become abused and used in a bad way.
And then have it become very ugly, and the same thing with blockchain, I think we’re going to see, we’re going to see criminal behavior on the blockchain.
Josh Burek: We already do.
Peter Rex: Probably like we haven’t seen before. Um, and then it could be, you know, we get start thinking of. This is so bad, but I think there’s going to be so much good from it as well. We’ve got to figure out how to stop the bad stuff and encourage the good stuff.
Josh Burek: As usual, a determining factor is good government predicated on good self- government.
Peter Rex: Yeah, absolutely.
Josh Burek: Peter Rex, thank you so much for your time. We’ve covered a lot of ground. I’m really grateful for your insights today.
Peter Rex: Yeah. Thank you, Josh. Appreciate it.