The Bitcoin Dilemma | Decentralized Finance | New Technologies | Crypto

foreign began more than a decade ago when Satoshi Nakamoto released Bitcoin in response to the 2008 financial crises with more than a decade passed since then in all these years Bitcoin has given rise to a huge ecosystem of what we now know as cryptocurrencies that can be used as a medium of exchange and storage and potentially replace or argument fiat currency now different Industries are looking at implementing blockchain and potentially using cryptocurrencies to do many things this includes paying vendors receiving payments creating efficiency within their industry my name is Ian Khan my love of Bitcoin started almost five years ago when I directed my first documentary blockchain City in blockchain city I spoke about the emergence of blockchain as a viable technology to change how cities function it might work as a futurist I encounter a lot of different Technologies and emerging ideas that can rapidly change the world we live in in the Bitcoin dilemma I'm bringing to you different perspectives from the cryptocurrency industry investment Community well-known experts inventors and influencers to help understand the role of cryptocurrency in our world today and its potential impact on all of us in the future you'll also learn a lot about the future of Finance asset management and a simple way of understanding decentralized finance and non-fungible tokens this documentary is meant for everybody and is not a technical documentary where you need to have a huge background or knowledge about Finance or cryptocurrencies or a blockchain or technology in fact the less you know know the better it is this documentary is suitable for school kids University students professionals Homemakers business owners employees leaders in every industry you can think about we've approached this documentary with the simple fact that everybody will be impacted by cryptocurrency at some stage in the next few years the more we understand this era of cryptocurrencies the better decisions we will make about our lives this in turn will benefit all of us collectively I will introduce you to all the guests in the documentary as we encounter them and with that let's begin with my friend Kim Commando a Hall of Fame broadcaster radio host whose show is America's largest radio show about technology and more I asked Kim to help us understand what Bitcoin is thank you let's say that you want to send your friend John ten dollars you could give him cash you could write John a check you could send him the ten dollars using venmo or Zell or you could use cryptocurrency now cryptocurrency is the broad term that describes when two parties exchange currency over the Internet so you would send John the equivalent of ten dollars in United States dollars but in Virtual currency that goes by these crazy names like Bitcoin and Dogecoin and ethereum and when you do the transaction there's going to be some small fees associated with it because after all nothing's free not even when it comes to cryptocurrency well there we heard it from Kim to understand cryptocurrencies it's really important to have different perspectives and I couldn't think of anybody better than Limon beard inventor and creator of a cryptocurrency called hashgraph Limon is a globally recognized Authority mathematician and scientist who's working on the future of cryptocurrencies to his invention of hashgraph let's hear about what distributed Ledger technology is all about [Music] Bitcoin was the first distributed Ledger technology the first DLT the first Ledger it gave us the ability to have a kind of money that isn't run by a central bank there is no single person controlling it it's distributed across a large number of people running computers and as long as most of them are honest in the case of Bitcoin as long as you can estimate exactly how much computing power then you can trust it and so the whole idea of these ledgers are that we take things that were done by a central party and we distribute them out over a group so that you can trust it no one person can hurt it so you know money right now is paper money but most of the money in the world is not paper bills most of the money in the world is just ones and zeros on the computer but it's a ones and zeros in a single computer your bank account is held by a single computer and the bank could cheat and change the numbers [Music] but with a ledger it's ones and zeros but it's distributed across many computers in a way that no one computer can cheat even a small group of them cannot cheat and so you can trust it so ask anybody who knows anything about cryptocurrencies or blockchain or dlts trust is a fundamental pillar of what this entire technology stack is bringing to different Industries and in fact to the entire world blockchain technology that forms the foundation of crypto is all about trust eliminating mistrust and challenges that we face with the current Financial system I spoke with Bobby Lee a board member at the Bitcoin Foundation he's also author of Promise of Bitcoin the future of money and how it can work for you Bobby is one of the earliest Pioneers in the cryptocurrency space and has seen the rise of Bitcoin from its very very early days prior to bitcoin we never really had a tangible digital asset of value everything digital was belonging to some centralized entity or Corporation whether it's movies music artwork photographs and stuff like that we never had a truly native asset class that was worth money so even though today we call Bitcoin a digital currency I'd much rather describe it in more technical terms as a decentralized digital asset what's an asset an asset is a vessel a container for value and the idea that people hold assets is for two reasons number one is they want to preserve the value this is what they call store value or store hold of value and the other reason to hold an asset is hopefully maybe you might even appreciate in value relative to other assets as we get deeper into learning about Bitcoin and everything that goes on with it I wanted to bring in more of an entrepreneur's perspective I spoke with Ben way Ben started his first company at the age of 15 and went on to raise 25 million pounds in his teens making him one of the world's first.com millionaires today Ben is an entrepreneur author and investor cryptocurrency Revolution has been an incredible journey I mean the only analogy I have or experience I have anything like it in my life was the internet Revolution I was there right at the beginning when people were telling me the internet was a fad and their main names would not exist in a few years and my father laughed I said to him Dad one day people buy things on the internet and he was like son you're you're definitely bucking up the wrong tree it is actually an interesting predictable path these revolutions take they have a kind of beginning where everyone's just in the industry talking about it and then it starts to build into some kind of Snowball Effect and then it transitions into something dangerous which is the hype cycle and the hype cycle is very dangerous because it's generally where you have big crashes and because it's become general knowledge and that's also when mums and Pops lose their money and people get really hurt so having seen these Cycles the crypto cycle is very similar I wanted to also bring in a critical element to understanding the whole cryptocurrency world and I spoke with my good friend Daniel Rob over tools the editor-in-chief of a publication called decrypt he has spoken and covered cryptocurrency since 2011 and is a highly recognized journalist and writer covering the crypto space let's talk to Dan about the realistic foresight on cryptocurrencies at the very least I think it has proven itself over the course of 10 11 12 years to the point where it's not going away it's not going to collapse and disappear tomorrow there are tens of thousands of other cryptocurrencies altcoins what have you some of them have real projects and purposes behind them some don't many will disappear but at the very least I think Bitcoin and also ethereum which is a separate blockchain Network are here to stay and in the last year and a half or so there was kind of a perfect storm of narratives that converged the covid-19 pandemic really reiterated for a lot of people the appeal of Bitcoin as an investment as digital gold when gov governments are handing out stimulus checks and when the FED is pulling various levers that's a reminder that Bitcoin has a capped Supply there will only ever be 21 million coins even if you have no interest in it fine even if you think it's stupid fine but I think that what the consensus has shown is that it's here to stay it exists it's going to continue to exist and in addition amid the last year and a half or so you had not just traditional Wall Street investors but some publicly traded companies also buying in and showing that they believe it's here to stay PayPal Square Tesla of course the Tesla one has been very controversial to Elon Musk but sort of all at once multiple parties Embrace Bitcoin like never before and the difference from 2017 which was the last Mania is that that was really retail driven that was just the regular folks now it's kind of multiple parties at once jumping in now you may think of everything that's happening with crypto being really different from what we know about the financial world and how is the supply and demand really impacting how we work with cryptocurrencies do you think this is stupid let's hear from a crypto analyst Scott melker is a cryptocurrency analyst and well-known crypto Advocate here's what he has to say there was a grand Awakening since covet hit that the policies of central banks and governments were failing the people when you saw stocks continuing to rise and endless money Printing and quantitative easing I believe people started to look for a solution to store their value and Bitcoin solves that you know in the cryptocurrency space we're building an absolutely new Global Financial system that will allow people who are unbanked and underbanked access like they'd ever had before multiple times author Michael Casey is going to help us understand a lot more about the rise of cryptocurrencies Michael works as an educator and advisor at the MIT media lab and the MIT Sloan School of Business Management he is the acclaimed author of five books on finance social media and cultural history his latest book The Truth machine the blockchain and the future of everything is a must read for anyone who wants to know more about the future of blockchain it's an integral part of the way that we see the world now the the crypto sort of blockchain mindset if you like and therefore I'm going to say it I'm going to call it out put a flag in the ground say that this is the age of cryptocurrency [Music] I also wanted us to talk to someone from a really strong financial background someone who does this day in and day out I could think of nobody else but Mark yusco who had Morgan Creek Capital Management and is an authority on anything related to Investments here are Mark's initial comments if we go back in time throughout most of History assets or Bearer assets right if you go back to the history of money in the old olden days you had cows I had chickens and we would bring our cows and chickens to Market and we would trade and then that got to be too cumbersome so you printed little coins with cows on them and I printed little coins with chickens on them and we would exchange those coins well then carrying those saxo coins got to be really heavy so we deposited those coins at a bank and they gave us pieces of paper currency that we could exchange and that's how Commerce and and money was created now there was a time when money actually had backing right like you could exchange a physical note for gold or silver in fact a pound note 380 years ago would get you a pound of sterling silver the problem is because we went away from the gold standard and the silver standard today it would take you 174 pounds of sterling silver to get a pound note so we've devalued currencies around the world in the Fiat world so Fiat means the government can issue currency at will at Fiat and we've untethered from backing so quickly currencies have never had anything behind them right money is simply custom and belief in the old days you had your coins with cows and I had my coins with chickens and the only reason those had value is because you and I were willing to exchange them or you can go back to the Roman Empire they had the Daenerys because people customarily accepted it in exchange for something of value why are my dollars in the United States green pieces of paper in China they're red pieces of paper and in Israel they're yellow pieces of paper they're just pieces of paper but they aren't backed by anything right if I turn my green paper money into the US government I get zip zero not up I don't get gold I don't get silver I don't get a share of tax revenues and in fact it's worse than that currency actually is backed by debt the only real money in the world is gold which has no Associated liability which is why for 5 000 years one ounce has bought a fine person suit from a suit of armor to a zoot suit in the 20s to a fine Man suit on Savo row today and why Bitcoin as digital gold all the properties of gold but digital form has no liability associated with it but all currencies US Dollars remnb Euros all have government debt associated with them and that's why they are devaluing in the last 12 months the US government printed 40 percent of all actually in print they hit a button and now we have ones and zeros because we actually don't you know have paper money anymore it's all electronic but 40 of the outstanding money supply in the history of the Republic which goes all the way back to 1776 in 12 months which means the value of that currency is going down in terms of purchasing power and that's unfortunately the nature of currency so what a real money right gold or Bitcoin the reason its price is rising is not necessarily that that asset is getting better is that the cross the dollar is getting worse [Music] now I'm sure you'll agree this is getting so exciting because we're looking at the history of money where money actually started and the impact that it's been having on us let's hear more about what Fiat means and get deep into the simplest explanation of money that I have ever encountered uh yeah there are two type of exchanges Fiat to crypto and crypto to crypto and I know what you're thinking hey I thought a Fiat was a car well not in crypto land like most Industries crypto has its own lexicon Fiat money is government-issued currency so if you're in the United States that means the US dollar and you have many exchanges to use one of the easiest for beginners to use is something called coinbase you pick an exchange and you open an account the rest of the process is really really simple you verify your identity you deposit US Dollars into the exchange and then you can start sending and spending your crypto most cryptocurrencies are created by something that's called mining computers mine coins by solving these complex math problems the more powerful the computer the faster it can think now if your computer is the fastest one to solve the problem well Bingo you're great you just won one unit of whatever cryptocurrency that you're Mining and in some cases that could be 500 or maybe even I don't know fifty thousand dollars way back when around 2009 you could fire up your own computer and start mining but today mining is run on Specialized chips known as an Asic or an application specific integrated circuits yeah anytime you talk about technology there's always This Acronym anyway they have up to a hundred billion times the capacity of PCS these systems cost thousands and thousands of dollars and Mining is now big business it's just a ton of competition if you're thinking about getting into mining only spend money that you are prepared to lose is on the gear I mean you could buy tens of thousands of dollars worth of hard drives graphic cards and processors and not get one coin but in the meantime your electric bill soars and those computer parts will wear out in no time at all now remember these computers are working at full speed 24 hours a day seven days a week we have currencies we have Commodities and I think now we have digital currencies and digital Commodities eventually we'll also have digital stocks and digital bonds and those are the four asset classes stocks bonds currencies and commodities and if we think of Bitcoin as potentially digital gold and we think of other cryptocurrencies potentially as as other forms of of currency that are more easily used for transactions they could dash for example so Bitcoin I actually liken it to a league of its own there's been many other cryptocurrencies that have come up the likes of ethereum Litecoin Deutsche coin is very hot very popular however these other asset classes are just copycat Bitcoin is fundamental digital money whereas these other asset classes represent something different even though you have a lot of people pumping all these other alternate coins or coins if you will what comes with Bitcoin is also the speculation I see it a lot of platforms a lot of exchanges cater to these local investors some of them are almost like degenerate gamblers right people liking them to unregulated unlicensed online casinos so that's the sort of ugly side of the Bitcoin speculation trading but legitimately I advocate for people to invest to hold Bitcoin as a long-term asset that will appreciate many many times in value because I think the world has yet to wrap its head around it now that we have a foundation of Finance we know a little bit about the background of cryptocurrencies let's talk about some more advanced and related concepts of cryptocurrency some of these are tokens non-fungible tokens and other asset classes let's hear back from Mark and also Steven stoneberg who heads a cryptocurrency exchange and also my friend Stephen Ritter a crypto security expert all of whom will help us understand a lot more about the whole idea of trading crypto exchanges and tokenization we also have digital Commodities you know we have the nft boom and digital art there's two kinds of tokens and there's what most people would refer to in the industry a utility token that just means it's not a security so it's this new asset class which is called a token which never really existed before and so you have some of these tokens are called cryptocurrencies or utility tokens I mean there's lots of like lingo that's thrown out there I think if it is a two by two Matrix to make the market make sense so you have utility token or security token the security token is just it's just a token but it's considered a security by like the SEC or somebody else no it has to be sold that way even though it trades on a blockchain and then there's two kinds of those tokens and the other axes it would be fungible token that's a Bitcoin where it's like a dollar bill you don't care which one you have they're all the same and then there's non-fungible token nft which is you care which one of those tokens you have and you could have an nft that's a utility token or a security token the same thing with a fungible token they can either be a utility token or a security token now as an exchange we have utility tokens that's what all cryptocurrency exchanges offer and then we are also offering security tokens on a limited basis you're selling securities so you have to do that under the right regulation or not it depends on the exchange we follow we follow the regulation nfts right now look like a cash trap in many cases they are a stunt or a celebrity or a pro athlete to make a quick dollar well also they would say strengthening their engagement with their fans and that's okay but that's not necessarily that exciting to crypto purists you also have to understand the politics and the context here which is that most nfts are built on the ethereum blockchain separate from Bitcoin so you also have a lot of people who just want nothing to do with that space a Bitcoin maximalists they believe there's only one God and that God is Bitcoin and they have no interest in all the other stuff now ethereum is really interesting because it's a blockchain in that was specifically designed to support smart contracts and there are all kinds of business applications that open up because of that nfts are one of them there are multiple Industries embracing them I think right now the media has been interested in nfts because of those eye-popping prices in many cases the most expensive nft sales have been to existing crypto VCS and rich people you know medicovan who is an nft person was the one who bought the 69 million dollar Beetle nft so does that one sale demonstrate that nfts have gone mainstream not really now if you've been following cryptocurrencies at all you probably would have heard that many celebrities and influential people talk about different types of cryptos the names of cryptocurrencies including Dogecoin come to mind in fact celebrity CEOs such as Elon Musk who's a big advocate of some cryptocurrencies I spoke with chester spat who served as the chief Economist at the U.S Securities and Exchange Commission SCC I asked Chester about the role of celebrity influencers and is this something that should really influence the price of crypto and the rates at which cryptocurrencies are traded I guess this was my initial question on really the hype versus reality of cryptocurrencies and what is real and what is not Elon Musk uh he's a genius the broad aspects of society across the the political spectrum they recognize him as a genius but as a byproduct somehow the society doesn't expect the same uh types of norms and behaviors from him that the society expects from most individuals like about making misleading statements with little little factual basis and taking those statements super seriously and I would have thought he would have learned from his experience several years ago I think unfortunately the SEC only slapped him on the wrist they probably needed to slap him on the wrist a little bit harder and so he probably didn't learn so much but you look at the recent events where first he's really touted the Bitcoin and also the Doge on the side but having those two and he says oh we're going to take this a Tesla you know he doesn't say oh and what are we going to do with the Bitcoin well we'll probably convert it he doesn't say well we'll probably convert it into dollars I presume that's what they're gonna what they would probably do because their costs after all are in dollars um but then within a matter of weeks he says no we're not going to accept this because it's made from Funk because the Bitcoin is made from fossil fuels well wake up Mr must what you know the tech this didn't change this didn't change over a few weeks did you not do your due diligence and obviously the market swings are dramatic well you'll have a response I mean maybe not a legal responsibility but you know if people are gonna move on every word that you say you need to be thoughtful about what you say it would be different if suddenly the world discovered that fossil fuels were being used to mine the Bitcoin and people had no idea before but that's not the case there was no change I think there was a little change at all in what people knew about it [Music] I also wanted to ask Chester about big tech companies such as Amazon Google Microsoft Facebook and others that have gained a tremendous amount of power on our lives because of the amount of data that they control big Tech is very very big the problem with that is that the decisions that it makes have such broad implications for society so is the answer to split them up uh it's not it's not clear that that serves society's interest you know ultimately the problem is how do they become so big well because there's such a scale economy in forming in a network and informing networks so the scale economy in in a Facebook for example is tremendous or even the skill economy in Google in in terms of the the absorption of all the information and putting all the information together the scale economies and these activities are response abilities that these companies have and there's issues on the one hand about competition I mean you look at Amazon and the impact of Amazon on all kinds of the different Endeavors not all for the good by the way you look at the impact arguably and suppressing Free Speech now that's not to debate the merits of individual decisions but I think on at least some of the decisions some of which have been shown to be wrong with the passage of time you know even in the broad domain associated with covid-19 the vaccines seems to be incredibly important of course but I also think that some of the kind of judgments and what are what's permitted to be said and what's not permitted these are tough issues okay but the question is who decides and how does power best in the society there's too much smugness among the leadership in the high-tech Community I guess one of the questions that arises is when it comes to digital currencies and crypto is it really a good thing to invest in or should we all be very pessimistic and cautious everything moves at the speed of technology and digital currency is the next natural step for money but that doesn't mean that's a good thing that's a good thing if you're invested in Bitcoin which is outside of those centralized systems that does not mean a central bank digital currency is a good thing for the people if you believe that central banks are Bad actors and the governments don't have your best interest in mind that a central bank digital currency is actually their wet dream because it's a more defined control of the money supply which is not what your average person probably wants but I I believe as far as mass adoption that we are extremely early we're only seeing the beginning steps with institutions starting to adopt it as a treasury asset with the paypals and visas of the world starting to look at it as a legitimate payment and even seeing banks in the United States starting to look towards custodying Bitcoin and other crypto assets and to adopting stable coins as new payment rails really it's not just about whether or not you know cryptocurrencies uh and blockchain Technology have infiltrated the economy but how much it is now driving policy decisions and and a broader agenda around where the world is going and you've got central banks looking at Central Bank digital currencies you cannot separate that that change that and that is a very profound potentially very disruptive approach to the way that our monetary system works from uh what Bitcoin and and the rest of the sort of crypto Universe brought to bear in terms of the ideas and new ways of thinking about how we represent and trade things like nfts are now an element of the way that pretty much every Media company is thinking about what that future holds for it and even some sort of questions about um you know data security and this environment that we live in with you know ransomware has been being brought to bear on you know centralized honey pots of data and so forth all of that is also something I think is now being questioned in ways that weren't before one of the things we all want to know is how safe is Bitcoin and how safe are other cryptocurrencies what about exchanges and what about the vulnerabilities when it comes to investing in crypto and feeling safe about it as well imagine putting your hard-earned money into a crypto investment and the next day you hear that your exchange or your crypto wallet was hacked and that you've lost all your investment is that really possible or we've always lived in a world where some people are not trustworthy and we've always lived in a world where you need trust part of the reason that it takes days to send someone a wire and you're charged twenty dollars is because it has to go through so many intermediaries partially to try to build up trust to make sure that it's not being done incorrectly no ends up stealing the money just ones and zeros in a computer you can send it across the world in one second you actually do it in a few seconds you can actually have finality and have your your wire transfer in just a few seconds so trust makes it more efficient if you're at trust then you have to bring lots of equation to make it trustworthy you have to have middlemen and if I wanted to sell you some property maybe I hand this middleman the property and you hand them the money and then they swap and give you the property and give me the money just to make sure you and I don't steal from each other if we're strangers with ledgers you don't need that you just have this instantaneous swap of my value for your money and it just works and so we've always had our trust problem ledgers are addressing this trust problem in a way that makes it more efficient and faster and cheaper Bitcoin itself has been very secure meaning the Bitcoin the Integrity of Bitcoin meaning if Bitcoin is sent to an address it's irrevocably in that new address in that new account so that in that sense is very secure Bitcoin has not itself been hacked the second thing you talk about is smart contracts so smart contracts decentralized Finance smart contracts built on top of ethereum now unfortunately these D5 smart contracts are all new software programs they've been out only for for less than a year for a year or so many any of them are immature many of them are still buggy and we've seen many many examples of D5 contracts themselves getting hacked where D5 projects and D5 sort of fundings get uh diverted by hackers so that's unfortunate which is why I don't advocate for newcomers for people who are who are not knowledgeable about this to to touch any device stuff I think it's way too risky it's not it's not worth it but that's a very different conversation than Bitcoin itself so if you have an account on some exchange that purports to store your Bitcoins I would say don't leave it on a custodial platform you got to take it out because you have three different types of risks right one is the exchange can get hacked uh and you only get Pennies on the dollar number two is actually your account can get hacked because people steal your email address they find out your password they log in pretending to be you and steal all your cryptocurrency The Exchange might be insolvent to begin with they don't have the cryptocurrency the Bitcoins that they claim they do so that what you see on your account balance is really just a figment of of their imagination a cryptocurrency wallet is an app or physical storage device that lets you store and use your digital currency wallets can hold multiple cryptocurrencies so you're not limited to just Bitcoin you can use an app or a physical wallet the currency itself isn't stored there rather the wallet store the location of your currency on the blockchain and that's super important blockchain is the technology that stores the record of your crypto transactions from the day the coin was mined to get this every trade sale or other moves that it makes there are two different types of wallets hot and cold now a hot wallet it's connected to the internet you move your virtual coin and spend it wherever it's accepted hot wallets they have big risks they can get hacked people forget their passwords that sort of thing so the most secure way to store your cryptocurrency is with a cold wallet it's not connected to the internet these are usually specially designed USB drive is that directly store your cryptocurrency physical wallets provide you the most protection from the hackers in the long run now for beginners a wallet app is a great place to start if you bought into cryptocurrency using Robinhood or maybe PayPal good news those apps work as wallets too some of the things that come to mind when we talk about cryptocurrencies and crypto as an asset is monetary policy and regulations today we're seeing that across the world many different countries have a different response towards crypto some countries are totally Banning crypto mining the usage of crypto crypto investing and While others are fully adopting cryptocurrencies as a legal tender El Salvador comes to mind let's understand where crypto adoption is and how regulations today can pay way to other economic aspects such as taxation Physical policy and the legality of crypto based worlds I think it's clear that many of The Regulators are concerned about these currencies now maybe part of it is that this reduces their control it reduces is the ability to do a traditional monetary policy you know when countries announce much tighter regulations you see that in the movements in the price even when our Secretary of the Treasury you know makes makes negative statements about the future regulatory environment the market reacts the tax issues I think also make prove to be important and interesting if somebody in in effect invests in the cryptocurrency and then they they go use they plan to go used to they plan to use the money so to speak whether to buy a Tesla when Tesla decides to take the cryptocurrency again when they go to spend the money they're going to pay Capital Gains they're going to first have capital gains taxes upon their their appreciation the biggest obstacle for Americans right now is the tax code cryptocurrencies are taxed very aggressively like property and not like money so anytime you transact in any digital currency in the United States you have a taxable sale of the asset that you just used to buy something so if you own Bitcoin and you want to buy a cup of coffee with it then you've sold your Bitcoin to buy that cup of coffee and have a taxable transaction and capital gains based on that sale so it effectively raises the price tremendously of anything you're doing and forces you to make a decision of whether it's worth taking the taxes there's plenty of places in the world where Bitcoin can be used as money other cryptocurrencies can be used as money you don't have to be concerned with that but right now anyone in America has to think twice before spending their cryptocurrency because of the tax implications I think The Regulators to this point uh to their credit have done a pretty nice job they have been measured they have been reasonable they've been diligent all the things that you would want in a regulator they haven't been Brash they haven't been reactive perhaps you could argue that they're a little behind in the sense that maybe they could have got out ahead of some of the things that happened in the Ico world but I think they've done a very good job retrospectively going back and saying yep you guys broke some rules so we'll be coming after to you and hey you didn't break the rules so you're good unfortunately incumbents try to use regulation to slow the speed of competitors and that's been true throughout history and I think it's true again today so you know about this time in in the bull market in the previous Cycles in 2013 and 2017 you heard rumors and and this this fud this fear uncertainty and doubt about banning Bitcoin or Banning cryptocurrencies and the reality is You Can't Ban a decentralized asset it's like squeezing the air in a balloon it just pops up someplace else and what the internet did to media and Telecommunications and commerce blockchain technology is going to do to financial services and clearly there needs to be regulation around that just because you're creating a new technology and you have these tokens that settle on a blockchain they're still subject to laws so I think it's it's a bit gray and people are subjecting these two interpretation or assuming there's a whole Camp of people that just think these don't apply to them and I would say they absolutely do if your trading a security token you know then those definitely and derivatives are security so if you're doing a derivative of alpha Bitcoin if a Bitcoin is considered a utility token a derivative of Bitcoin so like 10 times levered Bitcoin or just outright like you know futures or options on bitcoin those are securities by definition and then fall under the security slots even if it's just another variation of a token on your exchange and I think that's where the technology can move much faster the regulations are there not everyone is sort of following them or understanding that the rules apply to them unfortunately that's not how it works with the regulator they'll say well lack of knowledge of the law doesn't justify breaking the law this happens in any sort of new industry I think the stakes are a bit higher and I always make the analogy you look back to the 90s you know when the internet just got going and Amazon was just selling books and they wouldn't charge sales tax you know you sort of evaded them and everyone knew they were doing that and eventually they imposed you know they figured it out and there there weren't these horrible penalties but if you're breaking Securities laws that's a much more severe type of infraction than the type of stuff that went on in the early days of the internet over the past few years one of the things that has really increased in frequency and in fact in precision as well is hacking hackers have been really active at holding organizations hostage stealing data and selling information on the dark web what role does cryptocurrency play in all of this and does crypto create a way for cyber criminals to get away with crime one of the big I think consumer features of cryptocurrency is that it is anonymous right that you don't have to share as much information about yourself with the business or the person that you're doing business with on the flip side of that that is also a very powerful characteristic for criminals and fraudsters we have seen this I think throughout out history where criminals will use the newest technology Trends to help with the scale and reduce the risk of their attacks the general you know pattern of attack and the general theme of the scams those get recycled quite a bit right um and but what what changes is the technology used to deliver them and the platform and environments in which they attack so moving away from you know email heavy and text heavy things like Discord and uh and Telegram and Instagram that General nature of the the the scams themselves hasn't changed but what really has changed is this scale at which attackers can attack and the the you know relative impunity with which they can perpetrate these attacks the centralizing entities in the world today the governments and the big businesses and and the banks they provide a certain safety that right because they provide certain insurances that things are going to be done on the up and up so when you're going in and deciding to use a certain crypto exchange I still think the reputation of that exchange is incredibly important especially when you consider that they're going to be installing digital wallet technology typically on your mobile device or maybe on your desktop and because they put the software there you're putting your faith in them that they're the software is um is legitimate and doesn't have back doors and that sort of thing but I think some of the biggest losses we've seen have just been because hey if you lose your wallet or if you lose your your private Keys then there really is no uh recovering that and I don't know what the current stat is but I know there's an awful lot of for example Bitcoin out there that's essentially uh not claimable Bitcoin was revolutionary it really did start a new thing that hadn't existed before but it was you know the version one of how to do it and so they said well to stop people from cheating we'll force them to use locks of electricity on these huge supercomputers and so you know Bitcoin uses more energy than Ireland does right now you know every year it's using more energy than Ireland and it's slow you can only do a half dozen transactions each second across the entire world put together you can only do just a handful of transactions each second it's also insecure in various ways and slow in various ways uh you never really know for sure that your transaction has gone through maybe after six different computers have confirmed it you would believe it that takes an hour and even then there are rare occasions when one hour wasn't enough you really needed to wait a little bit more than an hour before you really knew that it went through and you never know for sure it's just your probability goes higher and higher and so there's a way of doing it where you get the same kind of trust but you get finality where you actually know the transaction has gone through for sure and instead of taking an hour to be pretty sure in four seconds you know for sure 100 guaranteed you reach finality in just a few seconds and instead of maybe doing six transactions each second uh right now we've slowed ourselves down to ten thousand per second so you know you go from six to ten thousand that helps and ten thousand is just what we're currently slowing it down to um inherently can go far faster than that so the whole point here was that we wanted to use less electricity we use about one five millionth according to one published report I saw those are good things we even have fairness for markets but it's it's still just taking that original idea and bringing it to the world to be able to use and the and the original idea is continuing to build momentum over time and Bitcoin itself is building momentum over time so not only are cryptocurrencies becoming more and more like Fiat there's also a lot of talk about Fiat turning into a cryptocurrency these are Central Bank digital currencies whole countries are talking about hey we're going to create a cryptocurrency of our own and our actual Fiat will be a cryptocurrency just because it makes so much sense you can have so much more trust you can have so much more speed you can have so much lower costs all of those reasons are reasons why the whole world is moving towards this thing we've looked at some really important aspects of cryptocurrency right from the basics of what crypto is to implications on finance investing and other areas of impact one of the most promising sites of cryptocurrencies and fast gaining traction are tokens we learned about tokens just a few minutes ago and there's more to them than we can understand this documentary alone the idea of non-fungible tokens as an asset class or an investment can help other Industries flourish including digital art creative economy and intellectual property in general let's hear a little bit more about the tokenization revolution that's powered by cryptocurrencies I asked our guests Mark yusco Chester spat Dan Roberts about this emerging area of tokenization and the possibilities that it holds every stock every Bond every currency every commodity every piece of our art every piece of real estate every private business every fine wine every collectible car every asset in the world will be tokenized it will all be digital and this is a natural progression that's been going on for decades from analog right we used to have physical pieces of paper money that we exchange for physical pieces of paper stock certificates then we turn them into electronic form we trade Q sips with ones and zeros from our bank account and eventually we'll trade them on digital blockchains where we have a public open source record and we don't need trusted third parties Financial Services in the middle charging fees so every asset and art is a great example digital art is just a digital commodity and nfts are a way of creating scarce assets in digital form and Eric Schmidt had the best line about this he said what what Satoshi Nakamoto whoever he she they are did back in the gold Financial crisis is basically found a way to create a unique asset in the digital world I think that's pretty valuable I think some really big businesses will be built on that everybody says oh no it's a bubble can't you see you know the people sold for 60 million dollars well let's be fair I'm not a big fan of people's art I don't really like it no accounting for Taste that's not the point I respect the fact that he did something every day for 13 years I'm pretty sure and I haven't brushed my teeth every day for the last 13 years but he created a piece of art every day for 13 years put it into one unit could never be replicated and sold it yeah I think that's really valuable so we don't work we often have these numbered lithographs and so you know often you have a situation where painter paints this original painting and obviously the original the one that has the wheel that has the big value but then there's something in between the original and a poster now in some cases the numbered Edition might involve the artist actually filling in the colors on the individual piece so that is really kind of between because they're in fact the artist actually worked on you on your piece but in some cases it's not that in some cases it's it's just that the artists committed that we're only going to make let's say 300 reproductions of this and they remember them and that's it and in a way nft strikes me as a little bit of a cousin of that there are interesting examples now of decentralized blogging platforms and Publishing writers or tokenizing novels the idea being I'd rather write or create directly from people who I know are interested in my stuff and here's a way for them to buy in to what I'm creating and demonstrate their fandom and then maybe even they'll gain financially from buying into what I'm creating really the the tokenize all the things movement is the same value proposition and idealism of crypto and really of Bitcoin since the beginning since 2009 which is no one person or entity in control no one Central Bank of Bitcoin no company that you have to you go through it gets a cut of the deals now of course there are a number of leading players that do get a cut there are centralized exchanges like coinbase that charge High fees but that's why crypto curious are so excited by decentralized exchanges dexes and other forms of players and protocols where it's all just about the code so that's what we really mean when we talk about tokenizing things is just put a digital put it on the blockchain nfts are the same way where a lot of people look at people who have paid a lot of money for an nft and they say I just can't understand that because I can't even hang the thing on my wall but everyone by now understands how to use online banking and you log in and you see here's how much money I have even though you can't touch and hold it but you trust that it's there and in many ways that is Simply Now translating to memorabilia digital Collectibles art and music I mean if you look at Spotify and streaming it hasn't actually been great for musicians I mean they earn pennies for their streams on Spotify if you ask some musicians or some artists they see some real potential to give back a bigger cut of royalties to original creators and that really is interesting so you just kind of have to get your mind over that hurdle of understanding that in many many cases value is digital in this documentary we've seen a lot of different things about cryptocurrencies and one of the things I wanted to talk about is crypto as a solution to challenges the world is facing right now on a daily basis we see economic unstability War inequality and many social political and economic events that are shaping the lives of people and communities across the world the question is what role can cryptocurrency play in a world full of turmoil and unstability is crypto able to bring peace and prosperity to Nations that are torn by war or is crypto a way for the dark Industries to keep on functioning I believe that we're very near where we have a full Global Financial system based in cryptocurrency not that replaces the current system but it runs parallel that will allow people who are underbanked or unbanked which is most of the world people don't realize to have access to the the same kind of systems that people in First World countries and who have acquired wealth will have access to these smaller economies tend to get buffeted by the effects of what's happening in the United States it's an inherent misalignment between the interests of those smaller countries and those United States where the US is pursuing its own monetary policy for its own mandate Ibiza and that's perfectly legitimate but because the dollar is the currency that basically sits on the assets of all of these different banks that use it as the means to then lend against whether it's in a small economy or in Europe or anywhere what happens to the dollar and what happens to interest rates in the United States profoundly affects those places and this has been a problem now for for 20 years because the quantitative easing that came out of the financial crisis had huge buffeting impacts on Emerging Markets so hot money inflows and outflows and this is a constant thing right that is the backdrop gives us I think the motivation of a lot of these smaller countries to start exploring some of these options especially right now when there is legitimate concern that U.S monetary policy is going to have yet again that sort of impact on the world we've already seen obviously a massive amount of expansion dollar issuance but as we move into a period where people are starting to get worried about U.S inflation where there is a massive debt overhang both at the governmental and at the corporate level the the prospect that the US will just go even deeper down this path of essentially inflating its way out of those problems creates real problems for these small countries who are caught up in the big waves that are set by that so the only idea that you would then seek out some other alternative is actually I think a legitimate uh certainly a legitimate option to explore let's put it that way you're seeing these smaller countries saying you know what maybe I can opt out here's a here are these options I'm not gonna I'm not using a crystal ball here I don't know how many years ago there'll be a lot of pressure brought to bear on them not to do so by those who are interested in them not doing so but I think that um there's certainly a trend that is worth watching here interesting issues too about traceability accountability is this going to facilitate bad behaviors you know in the extreme terroristic activities because payments can be easily made and it's not clear to me which way that cuts because on the one hand you know it's always struck me that cash is inherently not very traceable Bitcoin and other cryptocurrencies are kind of interesting in a way because on the one hand they're viewed as Anonymous but on the other hand there's a whole record-keeping Trail so we are now 50 years into the chaos of money what I mean by that is in 1971 President Nixon actually took the US dollar off of the gold standard and this is something that happened people know about it but people don't realize the impact by taking the US dollar off the gold standard we're now a ninja the printing press is is just going full speed it's happening in the US it's happening in China it's happening in Europe it's happening in many many countries the the central governments are almost in a unspoken race of seeing who can print their money faster because with more money printed the the more the currency is devalued the more the economic growth this is convoluted right think about that the more you have your currency debased and devalued relative to the other countries the more competitive your exports are and the more the growth and you have better GDP numbers you have better stock earnings and that's what we're entering all governments in the history of mankind have had inflationary Fiat currencies because it's the nature of governments to overspend that's what governments do that's what Empires do and the only way out when you get overly indebted right once you have all the debt you got four choices you can pay it back you can restructure it you can default on it or you can inflate it away there's not enough taxation power once you get to a certain level to pay it back so you can't do that you can't restructure it because to restructure you'd have to have somebody accept the deal no one's going to accept a deal on a bad asset you can default but then you get kicked out of office and politicians don't like that so the only choice is to inflate it away and in the history of mankind there have been 775 paper currencies three quarters of them disappeared off the face of the planet because they were inflated to zero now we've done a pretty good job with the dollar from 1776 to 1913 a dollar was worth a dollar a couple Wiggles around two Wars but it's basically worth a dollar there was no myth of inflation inflation is just theft inflation is theft by the government on the masses and the middle class to make the rich richer that's all it is we are almost headed towards the end of our journey together today we're now on the brink and a really large Revolution that's not just Financial but also social and economic we're also headed towards an era where money as we know it is changing its nature and becoming decentralized we're looking at technology becoming a dominant player and the role of big Tech and Innovative companies that can create new offerings and solutions become prominent is it time for a new Revolution ultimately we are at this moment where you know climate change is the biggest threat right in the world and contrary to the kind of rather shrill critique of Bitcoin that it is sort of on destined to fry the planet um and also contrary by the way to the rather naive perspective of lots of Bitcoin as we think if we just let it all go away it will naturally become green there's a middle path here that I think is a strategy option for these smaller countries to actually use Bitcoin as a funding mechanism for the development of green infrastructure and that is a really powerful concept not only from the perspective of how do you get Renewable Energy Systems laid out but actually how you Empower local communities because if you've got not only a local source of energy through say a solar microgrid built into a community but also a local source of funding through the Bitcoin mines that would be attached to those you get this really interesting new way of thinking about sovereignty sovereignty is as access to energy and money we can create mechanisms with these powerful new means of essentially creating value that are attached to energy sources and that that becomes a form of sovereignty a form of empowerment so I was sitting at lunch today and and there was this big giant armored car big diesel engine black smoke sitting out in front of the grocery store and it was out there for 10 minutes while they collected the money I think the lesion of those trucks around the world collecting physical coins is probably worse for the environment than Bitcoin I can't prove that yet but I probably will but here's the thing is it more efficient to do a money market with code than with lots of bodies at a banking Network system around the world of course it is foreign Bitcoin said hey we could make money be something that you can trust because it's distributed and then after a while people realized well the record of the money could actually be a record that stores other information you could have things like nfts being stored which is just a way in the computer of representing value in the real world so you can have tokens that represent houses and dollars and gold and anything else you can imagine you can turn it into nfts to represent it even weird things like your time or your future income you could turn into nfts and sell them today it's just amazing stocks and companies can be turned into nfts and so the second generation was realizing if we're going to have this Ledger remembering money well it could also remember everything else of value that was kind of the second generation and then the third generation was well now wait a second if we have money and we have things of value if you can have some money on The Ledger and I can have a house on The Ledger then why can't we do a transaction or we swap them and you get my house and I get your money and maybe there's rules built in that's enforced by The Ledger itself and this is what smart contracts are smart contracts are just any kind of computer program that's running that lets you do arbitrary rules and the rules are enforced by The Ledger you don't have to

2023-07-10 22:27

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