Speaker 1: Brought to you by Toyota. Let's go places. Welcome to
Speaker 1: Forward Thinking. Welcome everyone to the Forward Thinking podcast, where
Speaker 1: we talk about all stuff that is the future. That's right,
Speaker 1: and today we're going to talk Yeah, I'm clearly not
Speaker 1: alone in it in this. Uh So, today we wanted
Speaker 1: to talk about the future of digital currency. Now, let's
Speaker 1: introduce ourselves. I'm Jonathan Strickland, I'm Lauren vocal Bum, I'm
Speaker 1: Joe McCormick, and we have a case of the sillies.
Speaker 1: Now today we want to talk about digital currency. We've
Speaker 1: already had one podcast that was about what cash is,
Speaker 1: what currency is, what it represents, and uh, you know,
Speaker 1: we're all pretty familiar with physical cash, maybe not as
Speaker 1: familiar as we would like to be were not personally,
Speaker 1: but hypothetically, I mean ideologically, I get it, I've seen it,
Speaker 1: I want more of it. But we wanted to talk
Speaker 1: about some digital currency. Really, it's the first one I
Speaker 1: was going to talk about. The main one I'm going
Speaker 1: to talk about is bitcoin, which is really an alternative currency.
Speaker 1: It's not a currency that is backed by any particular government,
Speaker 1: which is kind of an interesting idea. UM, So we
Speaker 1: should probably start with the idea of what makes a
Speaker 1: currency a currency? All right? So yeah, what does make
Speaker 1: what What does make a currency a currency if it
Speaker 1: doesn't have to be backed by a government. What makes
Speaker 1: a currency a currency? Well, I've got a theory on that,
Speaker 1: all right, probably not original at all, but it seems
Speaker 1: that a currency is just something that everybody wants, okay, right,
Speaker 1: it's it's a standardized unit of wealth. And what makes
Speaker 1: a currency valuable is that you can get pretty much
Speaker 1: everybody to agree that they want it, um so. And
Speaker 1: and this comes in where we have the idea that
Speaker 1: like currency is magic, right, that that that a US dollar,
Speaker 1: little green rectangle of paper that says one dollar, you know,
Speaker 1: and has the creepy triangle pyramid eye on it, like
Speaker 1: that magically equals one dollar. Well why why does that
Speaker 1: thing equal one dollar when this piece of paper that
Speaker 1: I just wrote some notes on doesn't, Or why this
Speaker 1: other piece of paper that has a slightly different design
Speaker 1: on it is worth one hundred of those dollars? Exactly?
Speaker 1: They're made of the same stuff, Yeah, exactly. I mean,
Speaker 1: there's nothing about this little physical object that magically equally
Speaker 1: has that amount of value. Right, It's simply that we
Speaker 1: we've all agreed, we've assigned to it. We've assigned that
Speaker 1: to it. Sure, Yeah, and we've agreed to it, not
Speaker 1: just assigned it, but that everyone has bought into it. Yeah.
Speaker 1: It is a like I said in the last episode,
Speaker 1: it is a belief system than anything else. Well, it's
Speaker 1: sort of an illusion also because it's the thing. All
Speaker 1: you have to do to make this hundred dollar bill
Speaker 1: not worth a hundred dollars is convinced enough people that
Speaker 1: it's not worth a hundred dollars, right, and then that
Speaker 1: before any of you go out there and thinks, I
Speaker 1: think this is gonna make me rich. If I convince
Speaker 1: everybody that the money in their wallets is worthless, then
Speaker 1: I can take all their money. But you're a hard
Speaker 1: job of it, right, Well, first of all, you have
Speaker 1: a hard job of it. But too, if you actually
Speaker 1: did convince enough people for that to make you fabulously wealthy,
Speaker 1: you wouldn't actually be fabulously wealthy because the money itself
Speaker 1: would in fact be worthless because again, it's only worth
Speaker 1: anything because people want it, So if people don't want it,
Speaker 1: then it's not worth anything. The point is that the
Speaker 1: value of a piece of money is not magically assigned
Speaker 1: by FIA. The government can't really say what something is worth.
Speaker 1: The people as a whole determine what sometimes, yeah, and
Speaker 1: and the and that a certain amount of food or
Speaker 1: a gallon of gas or work that I do for
Speaker 1: somebody is worth that amount. Right. So so with bitcoin again,
Speaker 1: because you know, you don't have to have a government
Speaker 1: to back it. If people say this bitcoin has value,
Speaker 1: and they and enough people believe in that in enough
Speaker 1: and enough of a structure there supports it, then it
Speaker 1: does have value. Well, Jonathan, what is a bitcoin? You're
Speaker 1: using this word? So, bitcoin is a unit of digital currency.
Speaker 1: It was first proposed by a guy named y Day
Speaker 1: who proposed it in nine. It's an idea. The idea
Speaker 1: is it's a cryptocurrency, meaning that it is secret like cryptozoology.
Speaker 1: Well like like not such secret, like cryptography. Yeah, you're
Speaker 1: talking about encryption. Yeah, something about the currency has to
Speaker 1: be based on encryption. I'll get into that in a second.
Speaker 1: But it's essentially to a digital currency that's used that
Speaker 1: can be used in transactions, just as any other currency
Speaker 1: could be. So you would use this digital currency to
Speaker 1: buy stuff. That stuff could be digital or it could
Speaker 1: be physical so you could use the this digital currency
Speaker 1: to buy a real car, assuming that there was a
Speaker 1: car dealer out there willing to deal in this digital currency.
Speaker 1: If they accepted it, then you could buy a car
Speaker 1: with it or anything else. Um. Now, the actual currency itself,
Speaker 1: even though it was proposed in didn't start to show
Speaker 1: up until two thousand nine. And that's when someone who
Speaker 1: was using a pseudonym. The pseudonym was Satoshi Nakamoto, began
Speaker 1: to published a paper in a in a we'll not
Speaker 1: published a paper wrote in a forum actually about cryptography,
Speaker 1: about a proof of concept for this digital currency, and
Speaker 1: that was the birth of bitcoin. Interesting thing, Uh, only
Speaker 1: a few people, I assume know who this person is
Speaker 1: because this person has never been publicly identified or one
Speaker 1: of them. No, I do not know the actual identity.
Speaker 1: I am not privy to such information. Um And if
Speaker 1: I did, I wouldn't tell you. So maybe I do,
Speaker 1: but I don't. So here you think about it. If
Speaker 1: you have a digital currency, can you think of any
Speaker 1: questions off the top of your head, like things that
Speaker 1: if if the currency is digital, what are some of
Speaker 1: the questions that arise in your mind? Well, first of all,
Speaker 1: what is it? I mean, a US dollar is a
Speaker 1: little square or not square, a little rectangle of paper
Speaker 1: I put in my wallet. What what is this unit
Speaker 1: of currency? It's a block of data. Okay, yeah, where
Speaker 1: does that come from? Okay? So, uh the furs it's mind,
Speaker 1: which sounds kind of interesting. The way it works is
Speaker 1: that you have to create transactions and then through those
Speaker 1: transactions you create these blocks of data, which when you
Speaker 1: analyze the blocks of data, will create more bitcoins. That's
Speaker 1: a gross over simplification of what's going on here, but
Speaker 1: it all comes down to that idea of cryptography. Within
Speaker 1: that block of data, there is what is called a hash.
Speaker 1: Hash is essentially when you take uh, some numbers and
Speaker 1: then you apply math to it. And when I say
Speaker 1: apply math, the reason why that's vague is because it
Speaker 1: depends upon the hash about you know what math radical
Speaker 1: processes going on? Right? But let's say I tell you
Speaker 1: that I've got you know, I've created a hash, and
Speaker 1: I've got a number and that number is fifteen, And
Speaker 1: I tell you, Joe that I arrived at the number
Speaker 1: fifteen by adding two other numbers together, but I don't
Speaker 1: tell you which two numbers they are. And for you
Speaker 1: to be able to get a bitcoin, you have to
Speaker 1: tell me which two numbers I added together to get fifteen. Now, uh,
Speaker 1: I haven't given you any other information, so you just
Speaker 1: have to start handing me guesses as to how I
Speaker 1: got to that number fifteen, Right, And we knew it
Speaker 1: would be pretty reasonable for you to use a computer
Speaker 1: to do this rather than just shouting out numbers. Right,
Speaker 1: But in this let's let's say, in this instance, I
Speaker 1: tell both of you, Joe and Lauren, that I've got
Speaker 1: a number fifteen. So you have to tell me which
Speaker 1: two numbers I added together to get that number. And uh,
Speaker 1: the first one who guesses correctly gets fifty new bitcoins.
Speaker 1: Which what's your guess? What'n eight zero? No? That wasn't
Speaker 1: that any sorry, but so so what happens? You would
Speaker 1: keep on guessing until you were to get the ones
Speaker 1: and it was sixteen, a negative one by the way. Um,
Speaker 1: if you were to it once you once you were
Speaker 1: to guess it, I would hand you some bitcoins, not
Speaker 1: from me. I would actually generate through this process. It's
Speaker 1: kind of like the idea of mining a mountain for gold.
Speaker 1: Would be as if you had found a gold vein
Speaker 1: while just digging randomly in the mountain, same sort of idea,
Speaker 1: you were actually digging randomly using math. Now, in the
Speaker 1: case of bitcoins, the numbers and hashes are way more
Speaker 1: complicated than what two numbers that I used to create fifteen,
Speaker 1: And so you have to use a computer to go
Speaker 1: through all the various UH guesses that could potentially reach
Speaker 1: whatever the hashes in order to find uh the result. Now,
Speaker 1: it takes quite a bit of computing power, actually usually
Speaker 1: more in fact than than just one laptop. There's a
Speaker 1: lot of computers that are usually working on one of
Speaker 1: these at the same time right now. Well, in the
Speaker 1: early days, very early days of bitcoin, this is how
Speaker 1: brilliant this system is, you know, and I say brilliant.
Speaker 1: This is beyond whether or not bit you consider bitcoin
Speaker 1: of valuable currency, al right, just the system itself is brilliant.
Speaker 1: So in the early early days of bitcoin, those hashes
Speaker 1: were not so complex, meaning that if you had a
Speaker 1: decent computer with a decent CPU, you could start having
Speaker 1: it run these various guesses and expect to maybe solve
Speaker 1: a problem within um like you know, ten twenty minutes maybe,
Speaker 1: and and you're you would get bitcoins. So you're just
Speaker 1: like Mario jumping repeatedly into the block that gives a
Speaker 1: coin every Now you're like Mario jumping at all these
Speaker 1: different blocks. In one of those blocks gives coins, the
Speaker 1: other blocks don't. That's the that's a better analogy. Um,
Speaker 1: And so what would happen is that as more people
Speaker 1: started joining in, and when I said ten or twenty minutes,
Speaker 1: that's really again that's really exaggerating. But when as more
Speaker 1: people joined in, that would mean that more bitcoins were
Speaker 1: being mined because you have more computers working on these problems,
Speaker 1: and so things start to unravel faster. Well, then the
Speaker 1: system itself has a a way of fixing that, because
Speaker 1: you don't want to flood the market with bitcoins and
Speaker 1: then you devalue the currency. Right, That's what would happen
Speaker 1: if if the FED just said, well, let's print infinite money,
Speaker 1: or it would would be what would happen if you
Speaker 1: dug under you know, you you reached a mountain, you
Speaker 1: removed one shovel of dirt and realized that everything under
Speaker 1: one layer of dirt is gold. If the mountain is
Speaker 1: solid gold, you would suddenly devalue gold because there'd be
Speaker 1: a ton literally, there'll be tons of it flooding the market. Yeah,
Speaker 1: so there you go. You just devalued gold. Same sort
Speaker 1: of thing with with bitcoins. You cannot, you know, you
Speaker 1: have to control that release of bitcoins into circulations. It's
Speaker 1: intentionally making it difficult to create an artificial scarcity that
Speaker 1: will keep the value in tax. It's actually you're you're
Speaker 1: creating a real scarcity, but you're doing it through artificial means. Yes,
Speaker 1: synthetic or a forced scarce, yes, yes, yes, So there's
Speaker 1: a there's already a designated number of bitcoins that will
Speaker 1: ever be in existence, and beyond that there are no more.
Speaker 1: That's twenty around twenty one million bitcoins. Now, the bitcoin
Speaker 1: itself can be divided into smaller amounts down to eight
Speaker 1: decimal places. So as we get closer and closer to
Speaker 1: that limit, it actually decreases the number of bitcoins you
Speaker 1: will get per successful mining. So like when the it started,
Speaker 1: the first uh, successful attempts at mining got you about
Speaker 1: fifty bitcoins. Okay, and uh and what's a bitcoin run
Speaker 1: these days? It all depends. Uh. In March, it has
Speaker 1: fluctuated from forty three dollars per bitcoin to seventy eight
Speaker 1: dollars per bitcoin. As as of this very moment, it
Speaker 1: is seventy eight point four U S dollars. Yeah, so
Speaker 1: but as of half an hour ago, things could have changed. Ye. Well,
Speaker 1: actually we know that it does. Right, that the bitcoin
Speaker 1: value fluctuates wildly, crazy amount of fluctuation. What makes some
Speaker 1: people kind of hesitant to invest in it right now.
Speaker 1: A lot of people say it's not even a currency,
Speaker 1: that it's really more speculation, like it's like speculating in
Speaker 1: a stock that a lot of people are making their
Speaker 1: money just from buying and selling bitcoin or mining and
Speaker 1: selling bitcoins. All right, So getting back to the mining
Speaker 1: and making it more difficult as more machines join on.
Speaker 1: It was built directly into the design of bitcoins so
Speaker 1: that as more computing power is applied to the problem
Speaker 1: of figuring out these hashes, these transactions each time a
Speaker 1: transaction is made, that's what's allowing people to mine these
Speaker 1: other bitcoins um in order to make that when by
Speaker 1: making it more difficult, it means that you have to
Speaker 1: apply more processing power to successfully mine another bitcoin. It's
Speaker 1: the idea of you're you're in a giant mountain. Let's
Speaker 1: go back to the mountain idea you're in a giant mountain.
Speaker 1: There's a finite amount of gold in this mountain, and
Speaker 1: it's scattered randomly throughout the mountain. Uh. And as you
Speaker 1: get more and more of the gold from the easier
Speaker 1: places to mind, the stuff that's left is harder to
Speaker 1: get to. It's that the you know, by nature, just
Speaker 1: the natural design, it's harder for you to get to
Speaker 1: those places. But here's the other thing, is that if
Speaker 1: people start backing off of mining, like if if people
Speaker 1: were to stop dedicating so many computer resources to mining bitcoins,
Speaker 1: then because there would be less computer power dedicated to
Speaker 1: trying to get out the bitcoins, it would actually get
Speaker 1: easier to mind them again, so that the supply of
Speaker 1: bitcoins into the circulation would remain fairly steady. Right. It's
Speaker 1: the way, the way that I understand it and correct
Speaker 1: me if I'm wrong, is that is that they're using
Speaker 1: the actual computation of the processing of transactions as a
Speaker 1: monetary unit. Yeah. Essentially, the as as there are transactions
Speaker 1: that are going on, that providing the essentially the math
Speaker 1: problem that you have to solve in order to get
Speaker 1: more coins. So as more transactions happened, there are more
Speaker 1: opportunities as well. Uh. And what happened was early on
Speaker 1: people started figuring out, hey, the CPU on my computer
Speaker 1: solves problems essentially going one at a time. Right, it
Speaker 1: tries option one. Option one didn't work out, Let's move
Speaker 1: on to option two. That didn't work out, Let's move
Speaker 1: on to option three. But they discovered that if they
Speaker 1: were to use graphics processing units, which can do calculations
Speaker 1: in parallel, then you could do options one through fifty
Speaker 1: all at the same time, and then fifty one through
Speaker 1: one hundred all at the same time. You rapidly sped
Speaker 1: up the process of trying to solve these problems. So
Speaker 1: people started using GPUs, they started to mind bit coins.
Speaker 1: It was really successful, and then the difficulty ratcheted up
Speaker 1: to meet the fact that people were using other systems.
Speaker 1: Then you start networking computers together, and now you've got
Speaker 1: a group of computers all working to mine bitcoins, which
Speaker 1: means that again you've got more processing power, so it
Speaker 1: ratchets up the difficulty. It's essentially got to the point
Speaker 1: pretty early on that unless you were designing a computer
Speaker 1: specifically to mind bitcoins with that sort of processing in mind,
Speaker 1: you might as well not even try because your computer
Speaker 1: is just not going to have the needed Like you
Speaker 1: could still, in theory solve the problem that everyone else
Speaker 1: is trying to solve, and you could do it first,
Speaker 1: but but the likelihood was way low, so might as
Speaker 1: well pay a lotto. Yeah yeah, same sort of odds.
Speaker 1: Really is what it boils down to. So okay, So
Speaker 1: now we've established that we've created this economy based on
Speaker 1: a or not an economy, but just a currency exactly
Speaker 1: exists in the regular economy. You've created a commodity, not
Speaker 1: even a currency, because it's not a currency until someone
Speaker 1: accepts it as payment for something else. People do that. Yes,
Speaker 1: so it is a currency. But what we had talked
Speaker 1: about right now was just as So let's assume now
Speaker 1: that we're moving on to a currency, people want to
Speaker 1: use this to pay for stuff. Um. I I have
Speaker 1: a friend who's a near do well um, and he's
Speaker 1: always looking for schemes to get money without working. He
Speaker 1: thinks up an idea. He's like, I'm gonna buy some bitcoins, okay.
Speaker 1: And I know when I have a dollar in my
Speaker 1: pocket and I go to the store and I pay
Speaker 1: for a bag of doritos, I have to give the
Speaker 1: dollar to the person working the cash register and I
Speaker 1: can't get it back. What if I want to pay
Speaker 1: for something with a bitcoin, but I figure out a
Speaker 1: way to make copies of my bitcoins so that I
Speaker 1: can use it more than once. Okay, here's where the
Speaker 1: cryptography also comes in. So if you want your do Rito's,
Speaker 1: as you say, I humans call it doritos. But that's cool.
Speaker 1: Do Rito's. If I wanted my bag of I'm just
Speaker 1: giving you a hard time now. No. Uh, this good
Speaker 1: question was what they grew up in East Tennessee. That
Speaker 1: that's fair do Ritos. Well, they use what's called a
Speaker 1: block chain, and the blockchain is part of that that
Speaker 1: hash I was talking about that transaction, the history of
Speaker 1: every transaction for a bitcoin is tracked and incorporated as
Speaker 1: part of that hash, meaning that when you use that
Speaker 1: that bitcoin in a transaction, let's say the first transaction,
Speaker 1: which is when you get the bitcoins. Um, then you
Speaker 1: spend the bitcoins on something. There's a vendor out there
Speaker 1: that accepts bitcoins. You have purchased something from that vendor.
Speaker 1: The vendor now takes possession of those bitcoins. That information
Speaker 1: gets incorporated into the hash, that block of text and
Speaker 1: it's part of the history of that bitcoin. Now you
Speaker 1: no longer have possession of that. If you were to
Speaker 1: try and duplicate that in some way, you would have
Speaker 1: to do it in such a way that would actually
Speaker 1: invalidate the bitcoins you've already spent. But there's a record
Speaker 1: of that. It exists, and it's across all these notes that.
Speaker 1: One of the things we didn't talk about is bitcoins
Speaker 1: appear to peer currency, So the information for all those
Speaker 1: bitcoins is spread throughout the entire network, which means that
Speaker 1: once you spend it, that information is out there every Yeah,
Speaker 1: I mean, I mean they don't know that. They don't
Speaker 1: know that you bought something with the bitcoins. They know
Speaker 1: that that particular bitcoin was used in a transaction and
Speaker 1: where it is now. So for you to be able
Speaker 1: to to hack the system, you would have to not
Speaker 1: only figure out the hash of whatever particular transaction you
Speaker 1: were aiming for, you would alter all the transactions that
Speaker 1: happened after that point. So if that bitcoin had been
Speaker 1: in eighteen other transactions, that means that you would have
Speaker 1: to figure out a way of hacking that earlier point.
Speaker 1: Where you've discovered that there's a vulnerability and then no
Speaker 1: one would have to notice the fact that seventeen or
Speaker 1: eighteen other transactions were invalidated as a result. So that's
Speaker 1: where the protection is. It. Actually, the system itself rejects, uh,
Speaker 1: anything that looks like it's an attempt to double spend,
Speaker 1: So that that was the because, I mean, that had
Speaker 1: to be built in there. Otherwise, whenever you talk about
Speaker 1: digital you're like, well, what stops me from just making
Speaker 1: a copy and then a copy of a copy so
Speaker 1: that I become an instant millionaire once I get my
Speaker 1: first bitcoin. That's what stops you, right, Yeah, Supposedly, there's
Speaker 1: only been one major security incident. I think that happened
Speaker 1: in Uh yeah, there was there was there actually okay, yes,
Speaker 1: there was a hacking incident there where uh and it
Speaker 1: ended up getting fixed. But whereas there was that one
Speaker 1: major incident, there was also the problem of institutions. They're
Speaker 1: acting more or less kind of like banks and exchanges
Speaker 1: that hold bitcoins, which is kind of the opposite of
Speaker 1: the purpose of the bitcoin, isn't it. I mean, kind
Speaker 1: of it's supposed to be. I mean, it's like counterculture
Speaker 1: in that it doesn't require you to have a third
Speaker 1: party you're you're processing everything. Yeah, they I think the
Speaker 1: exchange Well, we'll get into some reasons why exchanges exist
Speaker 1: in a minute, but it's this would be places that
Speaker 1: would end up exchanging bitcoins for other currencies that kind
Speaker 1: of stuff. Um, and there have been a few that
Speaker 1: had been hacked. In fact, a few that that have
Speaker 1: gone under since uh the hacking attacks because all all
Speaker 1: uh confidence on the consumer level stapped away. Yeah, so
Speaker 1: that's really one of the issues. Another issue with bitcoins
Speaker 1: is that, uh, it's come under fire from some critics
Speaker 1: because one of the things that people are using some
Speaker 1: people are using bitcoins for is to make what would
Speaker 1: otherwise be illegal purchases that are not traceable. So they
Speaker 1: end up buying bitcoins and then use those bitcoins on
Speaker 1: something like the Silk Road, which is one of those
Speaker 1: uh it's it's essentially a black market, and black market
Speaker 1: for drugs is what's mainly known as Star Wars collectors
Speaker 1: items and mostly drugs. So so you know, we sit
Speaker 1: there and say like, well, you know, I can't buy
Speaker 1: heroin with uh with cash because it's gonna yeah, well,
Speaker 1: because I'll get caught. We're taking morality and ethics and
Speaker 1: everything out. This is someone this is someone who who
Speaker 1: wants heroin and they say, well, I've got bitcoin, so
Speaker 1: I'm gonna spend it on on silk road. It's completely untraceable.
Speaker 1: That's one of the criticisms, right, and so, uh, you know,
Speaker 1: the idea that you could have an entire black market
Speaker 1: supported by it that's untraceable, that could end up supporting
Speaker 1: illegal activity. That's one of the reasons why the bitcoin
Speaker 1: currency has has received some criticism. Another big criticism is
Speaker 1: the fact of its volatility, the fact that the value
Speaker 1: changes so dramatically and so quickly. Um, that's that's an issue.
Speaker 1: And some people say that it really is more like,
Speaker 1: uh like a speculative investment as opposed to a currency
Speaker 1: that not many people are actually using it to purchase stuff.
Speaker 1: They're using it to buy into it as if it
Speaker 1: were a star hypothetical wealth. Yeah, so that's not in
Speaker 1: that case, it's not you know, really working as a currency.
Speaker 1: So that that's a valid I think that's a valid
Speaker 1: criticism as well. So here's the thing that we might
Speaker 1: have to wonder about with bitcoin or any alternative currency,
Speaker 1: right because bitcoins are not the only one, no, but
Speaker 1: it's it's the one that's known as being open source
Speaker 1: and peer to peer. There are a couple of yeah,
Speaker 1: but so is it possible for an alternative currency to
Speaker 1: overtake the mainstream currency if enough people uh if yeah,
Speaker 1: if enough people have confidence in the alternative currency and
Speaker 1: not enough confidence in the quote unquote official currency, then
Speaker 1: sure there's no reason. Like if if the entire United States,
Speaker 1: or at least you know, a sizeable population the population
Speaker 1: of the United States decided spontaneously that the dollars no
Speaker 1: longer really had any value but bitcoins did, then that's
Speaker 1: what would happen, and you would have an enormous economic
Speaker 1: crisis on your hands. Um, but that it's it's possible.
Speaker 1: It's not plausible, but it is possible. And and there
Speaker 1: there are some some government run digital money things going on.
Speaker 1: Canada has the mint mint Chip Our Canadian Friends, which
Speaker 1: sounds like it sounds like cream is a delicious treat.
Speaker 1: Wait no, it's money cookies chips. But oh yeah, yeah,
Speaker 1: but no, but but and and this is the Canadian
Speaker 1: National Bank has released this or is planning on releasing this,
Speaker 1: this digital money thing. And it's kind of it's kind
Speaker 1: of a little dongle that you can just sort of
Speaker 1: poke it at other people's little digital currency and they transfer.
Speaker 1: So the old cred stick approach, which is what what
Speaker 1: was that shadow run where everyone had cred sticks? But
Speaker 1: uh no, I remember there's some science fiction thing where
Speaker 1: all of your money was kept on in digital form
Speaker 1: in some sort of physical device that you carried around,
Speaker 1: and whenever you want to make a purchase, that would
Speaker 1: just transfer automatically, essentially of the same thing as the
Speaker 1: near field communication chips do and smartphones, same sort of
Speaker 1: same sort of thing, but tied directly into the federal
Speaker 1: reserve there rather than through a third party bank. Right. Yeah,
Speaker 1: So I mean it's there's no reason why a digital
Speaker 1: currency could not work. Uh. I mean, you can argue
Speaker 1: that there are some problems with keeping security in a
Speaker 1: digital format, but the same thing is true with physical currency.
Speaker 1: I mean, you you've got security issues there too. It's
Speaker 1: it's you know, it's the question is is the risks
Speaker 1: so high as to make it impractical? Uh? And or
Speaker 1: are the Are the risks low and are the benefits high?
Speaker 1: If they are, then obviously that would make moving to
Speaker 1: a digital currency a higher priority. Um whether or not
Speaker 1: we ever get to a point where dollars are mainly digital.
Speaker 1: I don't know. I mean, the other question of that is,
Speaker 1: do we get to a point where everyone has access
Speaker 1: to whatever means it is to make these transactions, because
Speaker 1: cash is also something that that certain segments of the
Speaker 1: population they can get access to cash, but they may
Speaker 1: not have access to the to the equipment they would
Speaker 1: need to make these sort of transactions or to mine
Speaker 1: bitcoins or whatever. Sure, yeah, you know. Also, I mean,
Speaker 1: you know, yes, you can break a dollar, Um, you
Speaker 1: can destroy a dollar. But but it's I don't know,
Speaker 1: I feel like it's a lot easier to drop a
Speaker 1: electronic thing in a glass of water and kill it.
Speaker 1: That would be hopefully you'd have your bitcoins in the cloud,
Speaker 1: right yeah, and since it's appeared to peer network, you
Speaker 1: would hopefully have the ideas that the entire the digital
Speaker 1: equivalent of putting your money under your mattress. Well, the idea,
Speaker 1: the idea is that the entire network would know that
Speaker 1: those bitcoins were with you, right, so, so there that
Speaker 1: even if you were to have your computer explode inspector
Speaker 1: Gadget style, you would still have all that wealth. It's
Speaker 1: just that you would have to find another way to
Speaker 1: be able to make the transaction. Uh. But yeah, I
Speaker 1: mean there's there there are pros and cons certainly, and
Speaker 1: uh and to me, it's just very interesting that there
Speaker 1: was a an attempt to create, uh, a mining operation
Speaker 1: like that that is sort of analogous to physical mining.
Speaker 1: It's a little different because we do know that there
Speaker 1: is a finite limit, and we know what that finite
Speaker 1: limit actually is. You know, it's not like it's not like,
Speaker 1: oh no, we found another bitcoin mine. Yeah, we know
Speaker 1: that everyone relation for everyone. According to what I read
Speaker 1: that they twenty one million coins will all be mined
Speaker 1: by sometime in twenty And the reason for that is
Speaker 1: that again, as as more bitcoins are mined, they release
Speaker 1: fewer per year, right, they actually release so that a
Speaker 1: successful mining attempt ends up getting fewer bitcoins than it
Speaker 1: did before, usually half of what it was before, so
Speaker 1: fifty to twenty five to twelve and a half too.
Speaker 1: And and because you can divide a bitcoin up to
Speaker 1: eight decimal places, when we start getting to one forty,
Speaker 1: when you're mining bitcoins, you're going to get incredibly tiny
Speaker 1: percentages of an actual bitcoin every successful mining attempt. That
Speaker 1: also means that you're that the stuff you've mind. Like
Speaker 1: if if one bitcoin is equal to two hundred U
Speaker 1: S dollars, then your tiny percentage of a bitcoin is
Speaker 1: not gonna be worth that much. But there are also
Speaker 1: transaction fees that happen, and you end up collecting on
Speaker 1: transaction fees if you successfully mind bitcoins. So there may
Speaker 1: come of time where the physical value of the bitcoin
Speaker 1: you have mind is lower than the amount of money
Speaker 1: you get in transaction fees. So that's kind of interesting too.
Speaker 1: It's complicated. I'm curious to see how well it works
Speaker 1: over the long run. We've seen some pretty high highs
Speaker 1: and low lows of bitcoin, because even though you know,
Speaker 1: seventy eight dollars sounds like a lot, that's not the
Speaker 1: peak price of no. No, I think I think I
Speaker 1: saw it go over two hundred dollars at one point.
Speaker 1: So be interested in what events precipitate spikes in the
Speaker 1: bitcoin market. Well there, you know, anytime there's a a
Speaker 1: crisis where some exchange has been hacked, it severely devalues
Speaker 1: the bitcoin, which means that which means that by stealing
Speaker 1: the currency you have actually made it worthless, or at
Speaker 1: least worth worth worth space less to seal it, right,
Speaker 1: because if you steal it and suddenly it's not worth
Speaker 1: very much, then what have you accomplished? Right, I mean,
Speaker 1: then you're like, well, especially if it took you a
Speaker 1: lot of effort to steal the money, you may have
Speaker 1: spent more time and money trying to steal the stuff
Speaker 1: than what it ended up being worth by the time
Speaker 1: you were done. Maybe if you're just a pure sadist
Speaker 1: and you want to ruin it for everybody, all right,
Speaker 1: if you're a troll, if you're a currency troll. Yeah. So,
Speaker 1: so all of you non trolls out there, if you
Speaker 1: have any suggestions you would like us to talk about
Speaker 1: in future episodes, or or if you just want to
Speaker 1: comment on what we've said already, I highly recommend you
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