1 00:00:00,000 --> 00:00:19,260 Welcome to Students Incorporated, a podcast where we dive into relevant topics and issues 2 00:00:19,260 --> 00:00:23,580 related to the world of business, technology, education and design. 3 00:00:23,580 --> 00:00:25,600 I'm your host, Mr. Jason. 4 00:00:25,600 --> 00:00:29,980 Episodes include student conversations, interviews with thought leaders, and inspirational stories 5 00:00:29,980 --> 00:00:31,900 with an international flavor. 6 00:00:31,900 --> 00:00:35,840 This podcast is created and produced with the help of students from the International 7 00:00:35,840 --> 00:00:38,840 Community School of Bangkok. 8 00:00:38,840 --> 00:00:50,400 In today's episode, we'll be having a discussion about cryptocurrency. 9 00:00:50,400 --> 00:00:54,520 Now before you roll your eyes or tap stop on your device, I think you'll find some 10 00:00:54,520 --> 00:01:00,680 great information brought to you by our special guest, Mr. Brian, an economics and finance 11 00:01:00,680 --> 00:01:01,680 teacher. 12 00:01:01,680 --> 00:01:05,040 We also have a top 10 list we'll be sharing toward the end of the episode you won't want 13 00:01:05,040 --> 00:01:06,040 to miss. 14 00:01:06,040 --> 00:01:08,960 I'm also joined by our co-host, Lion and Linda. 15 00:01:08,960 --> 00:01:12,880 But first, let's hear the quote of the day and get some headline news. 16 00:01:12,880 --> 00:01:14,360 Thank you, Mr. Jason. 17 00:01:14,360 --> 00:01:16,400 Today's quote is from Albert Einstein. 18 00:01:16,400 --> 00:01:20,520 He said, it has become appallingly obvious that our technology has exceeded our humanity. 19 00:01:20,520 --> 00:01:24,680 I've already thought provoking quote as we talk about a topic that has captured the minds 20 00:01:24,680 --> 00:01:29,520 and even some hearts of the people who built our traditional financial systems, but also 21 00:01:29,520 --> 00:01:31,960 everyday people, young and old. 22 00:01:31,960 --> 00:01:36,360 But before we attempt to deconstruct crypto, let's hear some headline news for this week. 23 00:01:36,360 --> 00:01:39,880 In local financial news, the Thai baht is quite weak right now. 24 00:01:39,880 --> 00:01:43,080 It is currently sitting at 38 baht for one US dollar. 25 00:01:43,080 --> 00:01:46,880 This number has risen rapidly over the past six months due to global inflation. 26 00:01:46,880 --> 00:01:51,120 In regional news, a Japanese journalist has been sentenced to three more years in jail 27 00:01:51,120 --> 00:01:55,640 in Myanmar due to accusations of violating local immigration laws. 28 00:01:55,640 --> 00:01:57,800 Be careful when traveling to Myanmar. 29 00:01:57,800 --> 00:02:03,440 And internationally, in Jamaica, their broadcasting regulator has banned music and TV that glorifies 30 00:02:03,440 --> 00:02:06,240 crime, drugs, violence and scamming. 31 00:02:06,240 --> 00:02:10,680 The government doesn't want criminals to be glorified and deemed to be okay. 32 00:02:10,680 --> 00:02:12,920 Thank you for the quote and the news headlines. 33 00:02:12,920 --> 00:02:18,420 Mr. Brian and I have had a few conversations about crypto, some coins or tokens we hold 34 00:02:18,420 --> 00:02:23,040 and even the larger subject of how it relates to business and the economy. 35 00:02:23,040 --> 00:02:26,220 So I'm excited we could dedicate a whole episode to the subject. 36 00:02:26,220 --> 00:02:30,300 I've been quite surprised about how many young people have embraced this technology 37 00:02:30,300 --> 00:02:35,280 as not only an investment avenue, but also as an alternative to having to deal with some 38 00:02:35,280 --> 00:02:39,880 of the shortcomings of our traditional financial systems and banks. 39 00:02:39,880 --> 00:02:43,160 Okay, with that said, let's get into our first question. 40 00:02:43,160 --> 00:02:46,960 All right, Mr. Brian, thank you so much for joining us. 41 00:02:46,960 --> 00:02:51,340 To start and for the benefit of our listeners, could you please give us the basic definition 42 00:02:51,340 --> 00:02:52,340 of cryptocurrency? 43 00:02:52,340 --> 00:02:54,240 Well, yeah, glad to be here. 44 00:02:54,240 --> 00:02:57,800 Thanks for inviting me for this early hour podcast. 45 00:02:57,800 --> 00:03:02,360 Man, I can't believe that I'm here at this time, but I'm glad to be here with you guys. 46 00:03:02,360 --> 00:03:07,560 Now before beginning, just please keep in mind that whatever we share today is general 47 00:03:07,560 --> 00:03:13,360 in nature and should not be in any way considered advice for any individual specific investment 48 00:03:13,360 --> 00:03:14,360 decisions. 49 00:03:14,360 --> 00:03:16,760 Cryptocurrency carries lots of risk. 50 00:03:16,760 --> 00:03:18,840 So please do your own due diligence. 51 00:03:18,840 --> 00:03:20,160 I think that's clear enough. 52 00:03:20,160 --> 00:03:21,160 Good disclaimer, yes. 53 00:03:21,160 --> 00:03:22,160 What do you guys think? 54 00:03:22,160 --> 00:03:23,160 We agree. 55 00:03:23,160 --> 00:03:24,160 We agree. 56 00:03:24,160 --> 00:03:25,160 Do your own research, right? 57 00:03:25,160 --> 00:03:28,160 Mr. Brian, how does cryptocurrency exactly work? 58 00:03:28,160 --> 00:03:33,560 Yeah, so I'm not really an expert, but I'll try my best to convey my understanding. 59 00:03:33,560 --> 00:03:37,120 I think it's better if we look at it in chunks. 60 00:03:37,120 --> 00:03:40,360 First of all, think of it as a digital asset. 61 00:03:40,360 --> 00:03:45,560 An asset is something that you believe holds economic value and digital cryptocurrency 62 00:03:45,560 --> 00:03:46,920 takes the form of code. 63 00:03:46,920 --> 00:03:50,840 Okay, so in this way, it's kind of like how you might have money in a bank account. 64 00:03:50,840 --> 00:03:55,760 You can see that you have money online or in your app and there's security to protect 65 00:03:55,760 --> 00:03:57,640 your information and your savings. 66 00:03:57,640 --> 00:04:02,920 Second, with different cryptocurrencies, there are different levels of decentralization. 67 00:04:02,920 --> 00:04:08,000 To be centralized means that there's an entity that you have to go through like a bank or 68 00:04:08,000 --> 00:04:11,000 an institution that is the middleman. 69 00:04:11,000 --> 00:04:15,440 Cryptocurrency attempts to cut out this middleman and it does so in a pretty creative way, most 70 00:04:15,440 --> 00:04:18,240 often through something called blockchain technology. 71 00:04:18,240 --> 00:04:22,440 At a fine grain level, it's certainly much more complicated than I understand, but I 72 00:04:22,440 --> 00:04:25,400 think we can get like a bird's eye view of it. 73 00:04:25,400 --> 00:04:29,360 For our definition so far, we have digital accounts of assets that are not controlled 74 00:04:29,360 --> 00:04:30,840 by a bank or government. 75 00:04:30,840 --> 00:04:35,480 Instead, the information of all the transactions, the buying and selling is recorded on the 76 00:04:35,480 --> 00:04:40,400 blockchain, which is the technology that allows for recording and storing these transactions 77 00:04:40,400 --> 00:04:41,720 in a distributed way. 78 00:04:41,720 --> 00:04:46,560 This means that rather than a bank holding all of the transaction information, it's visible 79 00:04:46,560 --> 00:04:47,920 to everyone on the blockchain. 80 00:04:47,920 --> 00:04:52,080 Although it's not like you're seeing everyone's identification and private information just 81 00:04:52,080 --> 00:04:53,080 by looking at it. 82 00:04:53,080 --> 00:04:58,180 In a strange twist with this technology, it actually is the currency itself. 83 00:04:58,180 --> 00:05:02,920 So cryptocurrencies are different kinds of protocols in the computing sense of the word. 84 00:05:02,920 --> 00:05:08,440 The record of transactions is verified by looking at the whole history within the ledger. 85 00:05:08,440 --> 00:05:12,160 And so we see how the currency has been bought and sold, understanding of course that there 86 00:05:12,160 --> 00:05:14,760 have been a crazy number of transactions. 87 00:05:14,760 --> 00:05:20,260 From an economic perspective, these currencies gain value like any typical good. 88 00:05:20,260 --> 00:05:24,680 When more people want to buy it than want to sell it, the price increases. 89 00:05:24,680 --> 00:05:28,880 And when more people want to sell it, then buy it, the price is pushed down. 90 00:05:28,880 --> 00:05:31,360 Seeing the economic connections, right, Lion? 91 00:05:31,360 --> 00:05:32,360 Yes, sir. 92 00:05:32,360 --> 00:05:36,400 And at different points in time, depending on the supply and demand for the currency, 93 00:05:36,400 --> 00:05:40,240 there's an equilibrium price and quantity for the given market. 94 00:05:40,240 --> 00:05:44,680 And if there's a surplus on the market because more people want to sell, there's downward 95 00:05:44,680 --> 00:05:46,280 pressure on the price. 96 00:05:46,280 --> 00:05:50,360 And if there's a shortage because more people want to buy it, there's upward pressure on 97 00:05:50,360 --> 00:05:51,360 the price. 98 00:05:51,360 --> 00:05:52,360 And this makes sense. 99 00:05:52,360 --> 00:05:57,800 When more people have become aware of cryptocurrency and are buying more, we've seen the prices 100 00:05:57,800 --> 00:05:58,800 rise. 101 00:05:58,800 --> 00:06:01,760 Linda is also nodding in recognition of these concepts. 102 00:06:01,760 --> 00:06:02,760 That is right. 103 00:06:02,760 --> 00:06:03,760 Yeah. 104 00:06:03,760 --> 00:06:07,320 So when people with a lot invested in the currency cash out, they sell and the price 105 00:06:07,320 --> 00:06:10,920 may go down if there's more interest in selling than in buying. 106 00:06:10,920 --> 00:06:16,320 So who might consider getting involved in cryptocurrency and how can a person get involved 107 00:06:16,320 --> 00:06:18,280 or what methods exist? 108 00:06:18,280 --> 00:06:21,440 Could I ask you guys, have you ever been interested in getting involved? 109 00:06:21,440 --> 00:06:24,440 I dropped a few thousand bond to Solano. 110 00:06:24,440 --> 00:06:25,440 Full disclaimer. 111 00:06:25,440 --> 00:06:26,440 All right. 112 00:06:26,440 --> 00:06:27,440 Well, yeah, just a few. 113 00:06:27,440 --> 00:06:28,440 Just a few. 114 00:06:28,440 --> 00:06:32,320 How do you feel that that's going for you right now? 115 00:06:32,320 --> 00:06:33,960 I take it as a lesson that I learned. 116 00:06:33,960 --> 00:06:34,960 To play the long game, right? 117 00:06:34,960 --> 00:06:35,960 Yeah. 118 00:06:35,960 --> 00:06:36,960 Yeah. 119 00:06:36,960 --> 00:06:39,920 Some of these lessons that we learn are probably best learned when we're young. 120 00:06:39,920 --> 00:06:43,400 You know, I may have a little bit less time to learn these lessons. 121 00:06:43,400 --> 00:06:47,680 So good for you for taking a step and learning that. 122 00:06:47,680 --> 00:06:48,680 I bought NFTs, okay? 123 00:06:48,680 --> 00:06:51,000 That was a bad decision on my part. 124 00:06:51,000 --> 00:06:56,000 Anyway, so yeah, I don't know whether I can make a recommendation there, but I can't say 125 00:06:56,000 --> 00:06:59,000 I don't own any NFTs. 126 00:06:59,000 --> 00:07:05,120 As far as people who are interested in getting involved, you can set up accounts on cryptocurrency 127 00:07:05,120 --> 00:07:09,000 exchanges now more easily than in the past. 128 00:07:09,000 --> 00:07:13,720 But first, you had better make sure that the exchange that you want to use is legal in 129 00:07:13,720 --> 00:07:16,760 your country and jurisdiction. 130 00:07:16,760 --> 00:07:21,400 One way governments are trying to regulate cryptocurrency is by requiring these exchanges 131 00:07:21,400 --> 00:07:25,740 to follow KYC or Know Your Customer guidelines. 132 00:07:25,740 --> 00:07:32,320 This means you may have to provide a passport and or some other kind of ID just to start 133 00:07:32,320 --> 00:07:33,320 an account. 134 00:07:33,320 --> 00:07:38,480 Then if you want to transfer funds into that exchange to start dealing with crypto, you 135 00:07:38,480 --> 00:07:40,140 need to link your bank account. 136 00:07:40,140 --> 00:07:45,080 Be careful though, since the technology is new and there are new ways of doing things, 137 00:07:45,080 --> 00:07:49,220 some people have tried to capitalize on the opportunity by scamming others. 138 00:07:49,220 --> 00:07:50,440 So do your research. 139 00:07:50,440 --> 00:07:56,300 Another reality of crypto that people have ignored to their peril is the issue of taxation. 140 00:07:56,300 --> 00:07:59,840 Some countries tax you when you sell crypto for a gain. 141 00:07:59,840 --> 00:08:06,360 So if you buy some cryptocurrency worth $100 and it increases to $150 in value, then you 142 00:08:06,360 --> 00:08:10,160 sell, you may owe taxes on that $50 gain. 143 00:08:10,160 --> 00:08:15,480 Even easier to overlook is the fact that in some countries, just exchanging one cryptocurrency 144 00:08:15,480 --> 00:08:19,120 for another can cause you to owe taxes to your government. 145 00:08:19,120 --> 00:08:25,560 For example, let's say you've got that $100 and it's an Ether, the value goes up to $150 146 00:08:25,560 --> 00:08:28,000 and then you exchange your Ether for Cardano. 147 00:08:28,000 --> 00:08:32,940 You may still owe taxes on that $50 gain you got before you traded it for another currency. 148 00:08:32,940 --> 00:08:38,520 You have to do your research about whether or not you may owe taxes and under what circumstances. 149 00:08:38,520 --> 00:08:43,680 I've read stories about people who made a ton of money after they sold crypto, spent 150 00:08:43,680 --> 00:08:48,440 the money, then found out they owed taxes and didn't have any money left to pay the 151 00:08:48,440 --> 00:08:49,440 taxes. 152 00:08:49,440 --> 00:08:54,000 Mr. Jason, did you have any other insights into setting up crypto or what to be aware 153 00:08:54,000 --> 00:08:55,000 of? 154 00:08:55,000 --> 00:08:56,000 I do. 155 00:08:56,000 --> 00:08:59,080 I actually use Coinbase as my exchange. 156 00:08:59,080 --> 00:09:05,480 I would just be leery of the fees that are attached to when you buy crypto or you pull 157 00:09:05,480 --> 00:09:11,120 crypto out, not only the taxes, but also the fees that the exchanges take when you put 158 00:09:11,120 --> 00:09:12,640 money in or take money out. 159 00:09:12,640 --> 00:09:20,160 These days with stocks and other more conventional securities, a lot of these fees are zero. 160 00:09:20,160 --> 00:09:23,000 There's no cost, but with crypto, it can be significant. 161 00:09:23,000 --> 00:09:29,360 Yeah, the exchanges have to make money somehow because they're handling the money passing 162 00:09:29,360 --> 00:09:32,840 from fiat currency to cryptocurrency. 163 00:09:32,840 --> 00:09:39,280 So they're transferring that and they're basically updating the blockchain for you in a way. 164 00:09:39,280 --> 00:09:43,240 So you just have to be aware of those fees. 165 00:09:43,240 --> 00:09:48,240 Sometimes they're in the low percentages up to 10%, depends on how much money you want 166 00:09:48,240 --> 00:09:52,400 to put into crypto, but just do your homework beforehand. 167 00:09:52,400 --> 00:09:56,340 Mr. Bride, you teach personal finance and economics and I know that. 168 00:09:56,340 --> 00:09:58,840 So how does cryptocurrency relate to those subjects? 169 00:09:58,840 --> 00:10:03,880 Oh man, it relates at so many levels to economics and finance line. 170 00:10:03,880 --> 00:10:09,000 I was part of a group of people that thought that cryptocurrency would be uncorrelated 171 00:10:09,000 --> 00:10:13,520 with the returns of the stock market and pay attention stats students because there are 172 00:10:13,520 --> 00:10:16,120 also stats concepts in here. 173 00:10:16,120 --> 00:10:20,800 What I mean is I thought that while the stock market moved a certain direction, crypto might 174 00:10:20,800 --> 00:10:22,920 not move in the same direction. 175 00:10:22,920 --> 00:10:25,160 I was trying to diversify my portfolio. 176 00:10:25,160 --> 00:10:29,320 It seems that I was wrong, even though that could change in the future. 177 00:10:29,320 --> 00:10:33,420 Part of investing carefully is understanding diversification so that you can maximize your 178 00:10:33,420 --> 00:10:36,000 return while minimizing risk. 179 00:10:36,000 --> 00:10:40,960 And risk in finance and statistics is typically measured with standard deviation. 180 00:10:40,960 --> 00:10:46,560 Crypto has implications for the global financial system where governments are trying to regulate 181 00:10:46,560 --> 00:10:49,720 it and even create their own cryptocurrencies. 182 00:10:49,720 --> 00:10:54,260 A couple of countries have even adopted Bitcoin in cases where they think the cryptocurrency 183 00:10:54,260 --> 00:10:58,280 can solve financial and economic problems that have troubled them. 184 00:10:58,280 --> 00:11:00,040 Maybe we'll get a shout out to that. 185 00:11:00,040 --> 00:11:01,680 We'll look at one of those. 186 00:11:01,680 --> 00:11:06,640 Some of these problems include how and how easily people send money across borders back 187 00:11:06,640 --> 00:11:09,400 to family and loved ones in their home countries. 188 00:11:09,400 --> 00:11:11,000 These are called remittances. 189 00:11:11,000 --> 00:11:16,260 Other problems include how countries deal with inflation or exchange rates between their 190 00:11:16,260 --> 00:11:20,400 currency and the US dollar, for example, such that they want an option that mitigates the 191 00:11:20,400 --> 00:11:23,920 risks associated with currencies that don't hold their value. 192 00:11:23,920 --> 00:11:27,520 And I'm sure my answers to some of your other questions will reflect how integrated the 193 00:11:27,520 --> 00:11:31,680 concepts of cryptocurrency are with these fields. 194 00:11:31,680 --> 00:11:36,360 My next question is, what is the difference between cryptocurrency and traditional currency 195 00:11:36,360 --> 00:11:37,800 or fiat currency? 196 00:11:37,800 --> 00:11:43,800 The proponents of cryptocurrency, if I may paint in broad brushstrokes, are big on decrying 197 00:11:43,800 --> 00:11:45,940 the faults of fiat currency. 198 00:11:45,940 --> 00:11:48,800 And it's true to a large extent what they're saying. 199 00:11:48,800 --> 00:11:51,800 Inflation is a real issue, especially right now. 200 00:11:51,800 --> 00:11:54,560 And I think we may see a lot more of it in the coming years. 201 00:11:54,560 --> 00:11:59,960 I talk about this a lot in our personal finance and investing course, as well as in AP macroeconomics. 202 00:11:59,960 --> 00:12:05,920 But there was a period in the 1970s when inflation skyrocketed in the US. 203 00:12:05,920 --> 00:12:11,720 We won't even go into the hyperinflation in places like Venezuela, Sudan, or Zimbabwe, 204 00:12:11,720 --> 00:12:14,440 to name a few countries where it's been particularly bad. 205 00:12:14,440 --> 00:12:18,120 So at the time, Paul Volcker, the chair of the Fed, and the Fed is the central bank of 206 00:12:18,120 --> 00:12:24,080 the United States, imposed interest rates that got as high as about 20% in order to 207 00:12:24,080 --> 00:12:25,320 curb inflation. 208 00:12:25,320 --> 00:12:28,280 And of course, this impacted employment for a time. 209 00:12:28,280 --> 00:12:32,460 That's what was necessary, perhaps, to stop the inflation and lead to what economists 210 00:12:32,460 --> 00:12:35,360 call the Great Moderation in the 1980s. 211 00:12:35,360 --> 00:12:40,800 A similar action could be required these days with our unsustainable levels of inflation. 212 00:12:40,800 --> 00:12:45,240 Cryptocurrency advocates sometimes argue that fiat currency, business cycles, and all 213 00:12:45,240 --> 00:12:50,200 kinds of macroeconomic woes can be avoided or at least mitigated with cryptocurrency. 214 00:12:50,200 --> 00:12:55,120 So the somewhat inflationary tendencies of fiat money are, at least at some level, I 215 00:12:55,120 --> 00:13:00,000 think, encourage people to invest as long as the inflation generally lies within a controllable 216 00:13:00,000 --> 00:13:02,120 range, like 2% to 3%. 217 00:13:02,120 --> 00:13:06,360 People believe that currency like the dollar is going to lose purchasing power if it sits 218 00:13:06,360 --> 00:13:08,040 idle, like in a bank account. 219 00:13:08,040 --> 00:13:11,080 Then they may want to put in assets they believe will grow in value. 220 00:13:11,080 --> 00:13:15,720 The consequent flow of cash through the economy spurs it on like it's lifeblood. 221 00:13:15,720 --> 00:13:20,280 People may buy stock in a company or buy debt in the form of bonds, for example, which companies 222 00:13:20,280 --> 00:13:24,800 then use for projects, expansion, and various investments of their own. 223 00:13:24,800 --> 00:13:27,000 In the process, these companies do just that. 224 00:13:27,000 --> 00:13:31,840 They hire help, they grow their physical capital, buy resources, innovate, and produce more 225 00:13:31,840 --> 00:13:35,720 of their goods or create new goods, which will create further market opportunities. 226 00:13:35,720 --> 00:13:39,960 There are steps missing, and I'm simplifying a lot, but that's a bit of the idea. 227 00:13:39,960 --> 00:13:44,080 One concern I have with cryptocurrency in general is that it doesn't act as a store 228 00:13:44,080 --> 00:13:46,760 of value in the economic sense of the word. 229 00:13:46,760 --> 00:13:50,400 Definitionally, a store of value implies a certain degree of price stability. 230 00:13:50,400 --> 00:13:55,180 As my economic students will recall, maybe you guys will recall, expectations of future 231 00:13:55,180 --> 00:13:59,520 prices shift supply and demand curves, which in this case applies to how people use or 232 00:13:59,520 --> 00:14:00,960 don't use cryptocurrency. 233 00:14:00,960 --> 00:14:06,080 If people invest or speculate in cryptocurrency because they believe that it will increase 234 00:14:06,080 --> 00:14:09,720 in value in the future, they will not spend it or sell it. 235 00:14:09,720 --> 00:14:14,600 It depends in the sense on the greater fool theory, which states that one can buy an overvalued 236 00:14:14,600 --> 00:14:19,240 asset only to sell it later at a higher price to another person who's willing and able to 237 00:14:19,240 --> 00:14:20,240 pay more. 238 00:14:20,240 --> 00:14:23,240 And that person is the greater fool, according to this phrase. 239 00:14:23,240 --> 00:14:28,640 And since I own some, not much, cryptocurrency, I may be considered in some sense of the word 240 00:14:28,640 --> 00:14:29,640 a fool. 241 00:14:29,640 --> 00:14:34,240 So that being said, I've invested an amount that I believe I can completely lose, even 242 00:14:34,240 --> 00:14:36,240 if I don't particularly want to lose it. 243 00:14:36,240 --> 00:14:40,280 I've invested in a few things over the years just to get skin in the game so that the lessons 244 00:14:40,280 --> 00:14:45,200 I learned about those investments through successes and failures mean more to me than 245 00:14:45,200 --> 00:14:47,360 if I look at them from the sidelines. 246 00:14:47,360 --> 00:14:52,540 And obviously I try to do it without bringing financial ruin upon myself or my family. 247 00:14:52,540 --> 00:14:57,600 So Bitcoin and pretty much all cryptocurrencies have exhibited extreme volatility. 248 00:14:57,600 --> 00:15:00,920 We're back to the standard deviation variance. 249 00:15:00,920 --> 00:15:01,920 The groans are coming out. 250 00:15:01,920 --> 00:15:03,080 No, this is good stuff. 251 00:15:03,080 --> 00:15:06,840 So yeah, many of them recently have stabilized considerably. 252 00:15:06,840 --> 00:15:12,680 But look, if there's a big uptick in retail or institutional interest, then that buying 253 00:15:12,680 --> 00:15:14,560 interest will push the price up again. 254 00:15:14,560 --> 00:15:19,000 Then when some people like Lion are making a ton of money and they see the price increase 255 00:15:19,000 --> 00:15:22,280 a lot, they're going to sell their shares and the price will come back down some amount. 256 00:15:22,280 --> 00:15:27,800 So I have a limited imagination, but I have a hard time envisioning a stabilized cryptocurrency 257 00:15:27,800 --> 00:15:32,360 that can gain and retain the economic prerequisites of currency. 258 00:15:32,360 --> 00:15:36,600 Again, if you want to look further into those qualifications of currency, they are these 259 00:15:36,600 --> 00:15:41,640 three, a unit of account, a medium of exchange and the store of value. 260 00:15:41,640 --> 00:15:42,640 Okay. 261 00:15:42,640 --> 00:15:47,840 With that insight, we will be right back for part two after a short financial lesson, not 262 00:15:47,840 --> 00:15:52,680 by Mr. Brian, but brought to you by Professor Lion, our cohost, right? 263 00:15:52,680 --> 00:15:53,680 Yeah. 264 00:15:53,680 --> 00:15:54,680 All right. 265 00:15:54,680 --> 00:15:55,680 We'll be right back. 266 00:15:55,680 --> 00:16:04,720 Forbes magazine published an article in September of this year, which highlighted the top five 267 00:16:04,720 --> 00:16:06,560 cryptocurrencies to invest in. 268 00:16:06,560 --> 00:16:13,800 Their recommendations included one Bitcoin, two Ethereum, three Tether, four Binance coin 269 00:16:13,800 --> 00:16:16,440 and five XRP, also known as Ripple. 270 00:16:16,440 --> 00:16:21,240 Fun fact together, these five coins have an almost one point four trillion US dollar market 271 00:16:21,240 --> 00:16:22,240 cap. 272 00:16:22,240 --> 00:16:23,520 Insert white ID emoji here. 273 00:16:23,520 --> 00:16:25,400 Yes, you heard me correctly. 274 00:16:25,400 --> 00:16:27,600 One point four trillion US dollars. 275 00:16:27,600 --> 00:16:28,600 What is market cap? 276 00:16:28,600 --> 00:16:29,600 You may ask. 277 00:16:29,600 --> 00:16:31,640 Market cap is short for market capitalization. 278 00:16:31,640 --> 00:16:34,500 This is the total value of all the coins that have been mined. 279 00:16:34,500 --> 00:16:38,440 Market cap is calculated by multiplying the number of coins in circulation by the current 280 00:16:38,440 --> 00:16:40,380 market price of a single coin. 281 00:16:40,380 --> 00:16:44,040 Thank you, Lion, for that lesson about crypto and market cap. 282 00:16:44,040 --> 00:16:49,020 With values in the trillions of USD, you can see why this topic is so popular with people 283 00:16:49,020 --> 00:16:50,020 and young people. 284 00:16:50,020 --> 00:16:51,020 Okay. 285 00:16:51,020 --> 00:16:53,560 We are back with part two of our discussion with Mr. Brian. 286 00:16:53,560 --> 00:16:56,000 Lion is leading us off with our next question. 287 00:16:56,000 --> 00:16:57,520 Alright, Mr. Brian. 288 00:16:57,520 --> 00:17:02,200 Our next question for you is what might we expect to see in the coming years? 289 00:17:02,200 --> 00:17:03,200 What's in store for cryptocurrency? 290 00:17:03,200 --> 00:17:08,160 I mean, crypto at the moment seems to be having quite the cold winter right now. 291 00:17:08,160 --> 00:17:11,860 Yeah, it's gone through a lot of ups and downs. 292 00:17:11,860 --> 00:17:13,640 It's very hard to say. 293 00:17:13,640 --> 00:17:17,560 What's easy for a lot of people, it seems to me, is to take a strong position. 294 00:17:17,560 --> 00:17:22,520 Like so many aspects of life, I find it more comfortable to treat an issue as black and 295 00:17:22,520 --> 00:17:26,840 white, but reality is often much more complex than that. 296 00:17:26,840 --> 00:17:32,280 Those who are invested in any kind of cryptocurrency have a vested interest, a variation as I see 297 00:17:32,280 --> 00:17:38,280 it of the word invested, in promoting it for reasons based on supply and demand. 298 00:17:38,280 --> 00:17:43,360 So as more people want to buy, the price goes up and those who already own it are happy, 299 00:17:43,360 --> 00:17:45,440 maybe happy to sell it and make money. 300 00:17:45,440 --> 00:17:51,480 So I believe that as entrenched as cryptocurrency is and with the sheer number of people who 301 00:17:51,480 --> 00:17:57,480 believe in it, whether that's Bitcoin, Ethereum, Cardano, or even some of the smaller altcoins, 302 00:17:57,480 --> 00:18:00,400 a lot of things would have to happen for it to disappear. 303 00:18:00,400 --> 00:18:03,640 So I'm not sure that it will disappear. 304 00:18:03,640 --> 00:18:06,240 There are a lot of intelligent people that believe in crypto. 305 00:18:06,240 --> 00:18:12,040 It's hard to parse out every person's reason or form a generalizable theory for its promotion 306 00:18:12,040 --> 00:18:13,720 as there may be many reasons. 307 00:18:13,720 --> 00:18:18,720 An extended period of people losing money and losing confidence in its ability to provide 308 00:18:18,720 --> 00:18:22,240 long lasting solutions could propel the value downwards. 309 00:18:22,240 --> 00:18:26,360 And it could be difficult to recover that confidence if people cannot see the impact 310 00:18:26,360 --> 00:18:31,960 of the use cases or the potential for the given currency to return to former highs. 311 00:18:31,960 --> 00:18:36,560 So have you guys seen any evidence that makes you think that it's going to succeed or fail 312 00:18:36,560 --> 00:18:37,560 in the long term? 313 00:18:37,560 --> 00:18:42,820 I think in the long term it's going to fail because nothing meets real estate, honestly. 314 00:18:42,820 --> 00:18:47,960 Like any guy could make a new coin or cryptocurrency at this moment, as far as I know, but you 315 00:18:47,960 --> 00:18:49,360 can't just make more land. 316 00:18:49,360 --> 00:18:51,320 There's always a limited number of land, right? 317 00:18:51,320 --> 00:18:55,280 But if new coins and crypto just keeps coming in, there's going to be too much supply and 318 00:18:55,280 --> 00:18:56,280 not enough demand. 319 00:18:56,280 --> 00:19:00,040 But with real estate, there's a limited supply and demand will always be higher and higher 320 00:19:00,040 --> 00:19:01,040 and higher. 321 00:19:01,040 --> 00:19:02,960 There's going to be more people in the world. 322 00:19:02,960 --> 00:19:05,160 I think you're hinting at scarcity, Lion. 323 00:19:05,160 --> 00:19:06,160 Good job. 324 00:19:06,160 --> 00:19:07,160 Nice. 325 00:19:07,160 --> 00:19:08,160 Very good. 326 00:19:08,160 --> 00:19:09,160 Linda, you've got our next question. 327 00:19:09,160 --> 00:19:10,160 Yes. 328 00:19:10,160 --> 00:19:14,640 Are there any apparent risks or threats related to crypto? 329 00:19:14,640 --> 00:19:19,680 Most other investments are invested in what's called the underlying, implying that there's 330 00:19:19,680 --> 00:19:24,240 something quote unquote underneath the investment or behind the investment. 331 00:19:24,240 --> 00:19:28,760 When you buy stock, you have ownership in the company and you can receive dividends. 332 00:19:28,760 --> 00:19:33,200 When you have bonds, you typically receive coupon payments and repayment of the principal 333 00:19:33,200 --> 00:19:34,600 amount you invested. 334 00:19:34,600 --> 00:19:40,220 With cryptocurrency, there's a claim that many of them have use cases, but you really 335 00:19:40,220 --> 00:19:44,580 have to be in the crypto scene to know how they're being applied. 336 00:19:44,580 --> 00:19:50,120 So opponents of crypto say that there is no underlying asset and that crypto has no value 337 00:19:50,120 --> 00:19:53,880 whatsoever apart from the market determined price. 338 00:19:53,880 --> 00:20:00,240 And another threat, besides the skepticism of its inherent value, is that a lot of things 339 00:20:00,240 --> 00:20:05,320 would have to happen for any cryptocurrency, even Bitcoin, to be able to be at the level 340 00:20:05,320 --> 00:20:08,120 of the major global currencies. 341 00:20:08,120 --> 00:20:12,620 Cryptocurrencies generally face significant barriers such as unknown long term macroeconomic 342 00:20:12,620 --> 00:20:18,480 impacts and ripple effects on the financial system, government regulations, environmental 343 00:20:18,480 --> 00:20:24,640 concerns and scams that target users who aren't as versed in the security aspects. 344 00:20:24,640 --> 00:20:30,320 Governments won't sit idly by if people attempt to abuse the pseudonymity, which some 345 00:20:30,320 --> 00:20:35,640 people think is anonymity, of cryptocurrency for tax evasion or even if the governments 346 00:20:35,640 --> 00:20:40,240 can't find a way to regulate the usage in a sustainable way for their purposes. 347 00:20:40,240 --> 00:20:44,640 People need to have confidence that they can store their money in a currency, including 348 00:20:44,640 --> 00:20:48,960 trusting its relative stability, that they can use it as a medium of exchange and that 349 00:20:48,960 --> 00:20:53,440 the currency is a unit of account where goods are identified by prices in and throughout 350 00:20:53,440 --> 00:20:54,920 the broader economy. 351 00:20:54,920 --> 00:20:59,920 You guys may have heard Warren Buffett advocate that investors stick to what they know and 352 00:20:59,920 --> 00:21:01,000 understand. 353 00:21:01,000 --> 00:21:07,060 In the name cryptocurrency itself, we see this relationship to the word cryptic. 354 00:21:07,060 --> 00:21:13,560 So the crypto prefix we mentioned kind of is referred to cryptography and how code is 355 00:21:13,560 --> 00:21:15,560 integral to this topic. 356 00:21:15,560 --> 00:21:19,360 But that begs the question about whether we actually understand what it is and what it's 357 00:21:19,360 --> 00:21:20,360 being used for. 358 00:21:20,360 --> 00:21:26,540 I mean, we don't need to understand all of the mechanisms of credit cards, let's say, 359 00:21:26,540 --> 00:21:30,640 how credit cards function before we can use credit cards, but it's really helpful to 360 00:21:30,640 --> 00:21:35,440 be aware of credit card concepts like how to build a good credit score, how to avoid 361 00:21:35,440 --> 00:21:40,960 paying interest on credit cards, how credit cards charge interest, credit limits and things 362 00:21:40,960 --> 00:21:42,280 like that. 363 00:21:42,280 --> 00:21:46,440 In a similar vein, if you want to speculate in cryptocurrency, I really recommend digging 364 00:21:46,440 --> 00:21:52,840 into it for a while and listening to perspectives from both sides of the debate before you get 365 00:21:52,840 --> 00:21:54,080 involved. 366 00:21:54,080 --> 00:21:58,280 Keep in mind that it is possible to lose all your money and even more than what you have 367 00:21:58,280 --> 00:21:59,280 invested. 368 00:21:59,280 --> 00:22:00,280 And pay taxes. 369 00:22:00,280 --> 00:22:05,640 And pay taxes after you've lost all that if you don't understand how you're investing 370 00:22:05,640 --> 00:22:06,640 or speculating. 371 00:22:06,640 --> 00:22:08,160 Thank you for that, Mr. Brian. 372 00:22:08,160 --> 00:22:13,800 What are some differences between common crypto categories such as regular coins, altcoins, 373 00:22:13,800 --> 00:22:16,800 tokens, NFTs and others? 374 00:22:16,800 --> 00:22:18,000 Thanks for the question. 375 00:22:18,000 --> 00:22:23,440 I think that maybe beyond the scope of this podcast, there are things like stable coins, 376 00:22:23,440 --> 00:22:30,100 DeFi tokens and NFTs, and each of these comes with its own set of concepts and rabbit trails. 377 00:22:30,100 --> 00:22:34,380 Maybe we can leave it to the listeners to enjoy what's here and have a look for themselves 378 00:22:34,380 --> 00:22:36,400 at other aspects that they want to look at. 379 00:22:36,400 --> 00:22:40,320 Also, you know, I'm just a beginner, so I really don't know a lot. 380 00:22:40,320 --> 00:22:46,000 You can consider this a basic intro to some of the ideas that arise from these new financial, 381 00:22:46,000 --> 00:22:48,560 cryptographic and economic developments. 382 00:22:48,560 --> 00:22:53,800 Breaking from our question format, Mr. Jason has written a top 10 list that we'd like for 383 00:22:53,800 --> 00:22:55,720 you to read for our audience. 384 00:22:55,720 --> 00:22:59,520 Could you introduce the list topic and then read it David Letterman style? 385 00:22:59,520 --> 00:23:03,960 OK, let me jump in here really quick for a moment and just say I wrote this list in more 386 00:23:03,960 --> 00:23:05,220 of a tongue in cheek way. 387 00:23:05,220 --> 00:23:09,280 So with that in mind, please proceed, Mr. Brian. 388 00:23:09,280 --> 00:23:16,440 So it's interesting because we don't necessarily promote cryptocurrency, but we're nonetheless 389 00:23:16,440 --> 00:23:28,600 going to present you with the top 10 reasons to get involved with cryptocurrency. 390 00:23:28,600 --> 00:23:34,200 And reason number 10 to get involved with cryptocurrency is that you may one day get 391 00:23:34,200 --> 00:23:40,880 to meet the famous or infamous Satoshi Nakamoto or Nakamoto Satoshi. 392 00:23:40,880 --> 00:23:45,080 Number nine is that day trading has become cool again. 393 00:23:45,080 --> 00:23:51,300 Reason number eight to get involved with cryptocurrency is you too can own fun NFTs just like some 394 00:23:51,300 --> 00:23:57,120 popular celebrities do like Justin Bieber, Snoop Dogg and the great footballer Lionel 395 00:23:57,120 --> 00:24:00,400 Messi. 396 00:24:00,400 --> 00:24:06,320 The seventh reason to get involved with cryptocurrency is you get to trade currencies that have science 397 00:24:06,320 --> 00:24:16,040 fiction movie title sounding names like Solana, Cosmos, Cardano, Hologrammatic and Algorand. 398 00:24:16,040 --> 00:24:21,080 Reason number six to get involved with cryptocurrency, it's the only way to purchase property in 399 00:24:21,080 --> 00:24:22,080 the metaverse. 400 00:24:22,080 --> 00:24:23,080 I didn't know that one. 401 00:24:23,080 --> 00:24:24,080 Where's the metaverse? 402 00:24:24,080 --> 00:24:25,080 Where can it go? 403 00:24:25,080 --> 00:24:27,840 I don't know, but Lionel, I hear they have real estate there. 404 00:24:27,840 --> 00:24:28,840 They do. 405 00:24:28,840 --> 00:24:29,840 They do. 406 00:24:29,840 --> 00:24:30,840 Estate in the metaverse. 407 00:24:30,840 --> 00:24:31,840 You can purchase pixels. 408 00:24:31,840 --> 00:24:32,840 Yeah. 409 00:24:32,840 --> 00:24:37,240 And you don't probably have to face the same scarcity that you do in the real world. 410 00:24:37,240 --> 00:24:44,680 Reason number five to get involved with cryptocurrency, you can now buy delicious empanadas and tamales 411 00:24:44,680 --> 00:24:49,600 on the streets in El Salvador with your Bitcoin. 412 00:24:49,600 --> 00:24:50,600 Bring out the Spanish teacher. 413 00:24:50,600 --> 00:24:51,600 Let's try it. 414 00:24:51,600 --> 00:24:52,600 I like that. 415 00:24:52,600 --> 00:24:55,200 It's like available as like a real currency, right? 416 00:24:55,200 --> 00:24:56,200 In El Salvador. 417 00:24:56,200 --> 00:24:59,520 El Salvador, it is legal tender. 418 00:24:59,520 --> 00:25:05,240 Number four, you have new conversational topics for boring dinner parties such as a blockchain, 419 00:25:05,240 --> 00:25:07,280 smart contracts and cryptography. 420 00:25:07,280 --> 00:25:09,560 I'm glad you mentioned blockchain there. 421 00:25:09,560 --> 00:25:10,560 Yes, yes. 422 00:25:10,560 --> 00:25:13,960 You pull that out at a dinner party and the whole table will go quiet. 423 00:25:13,960 --> 00:25:18,120 Reason number three to get involved in crypto, enjoy Singapore in a new way as a tax haven 424 00:25:18,120 --> 00:25:19,440 for your crypto wallet. 425 00:25:19,440 --> 00:25:23,880 Oh, and you may run into the co-founder of Facebook while you're there. 426 00:25:23,880 --> 00:25:28,640 Reason number two to get involved in cryptocurrency, you no longer have to deal with the traditional 427 00:25:28,640 --> 00:25:33,080 short banking hours and bank employees who take one and a half hour lunches. 428 00:25:33,080 --> 00:25:34,080 Amen. 429 00:25:34,080 --> 00:25:35,080 I like that. 430 00:25:35,080 --> 00:25:36,080 I like that. 431 00:25:36,080 --> 00:25:37,080 That's a good reason. 432 00:25:37,080 --> 00:25:38,080 Yeah, that's a good reason. 433 00:25:38,080 --> 00:25:44,280 But it's not as good as our number one reason to get involved in cryptocurrency is because 434 00:25:44,280 --> 00:25:46,360 Elon Musk said so. 435 00:25:46,360 --> 00:25:47,360 Of course, of course. 436 00:25:47,360 --> 00:25:48,880 Is there a better reason? 437 00:25:48,880 --> 00:25:53,800 So Mr. Brian, do you have any more words of advice for people wanting to get involved 438 00:25:53,800 --> 00:25:54,800 in crypto? 439 00:25:54,800 --> 00:25:59,040 If you're interested, learn as much as you can, try to find resources on all sides of 440 00:25:59,040 --> 00:26:04,800 the issue, talk about it, follow it and realize that no investment speculation or even life 441 00:26:04,800 --> 00:26:07,640 decision comes without any risk. 442 00:26:07,640 --> 00:26:11,680 And then on a more personal note, I encourage people to think about what good stewardship 443 00:26:11,680 --> 00:26:12,680 means. 444 00:26:12,680 --> 00:26:16,240 How can you use the resources that you've been blessed with to bless others? 445 00:26:16,240 --> 00:26:21,440 I often have to pause to ask myself if I'm just thinking about my personal gain or whether 446 00:26:21,440 --> 00:26:26,280 there's a more inclusive motive I have when I invest, whether that's investing time, energy, 447 00:26:26,280 --> 00:26:28,240 money or any other resource. 448 00:26:28,240 --> 00:26:31,560 So thank you guys so much for having me on Students Incorporated. 449 00:26:31,560 --> 00:26:32,960 It's been great to join you all. 450 00:26:32,960 --> 00:26:33,960 You guys are awesome. 451 00:26:33,960 --> 00:26:34,960 OK. 452 00:26:34,960 --> 00:26:39,960 And with that last bit of advice from Mr. Brian, he is my favorite economist and my friend. 453 00:26:39,960 --> 00:26:41,600 We will be signing off. 454 00:26:41,600 --> 00:26:46,600 But before we do that, Albert Einstein was accurate about how technology in some ways 455 00:26:46,600 --> 00:26:51,320 has exceeded our humanity in what it means to be human and how we interact with each 456 00:26:51,320 --> 00:26:52,320 other. 457 00:26:52,320 --> 00:26:56,800 We could take his assessment as a warning to not lose our humanity because of technology. 458 00:26:56,800 --> 00:26:58,280 Let's use technology for good. 459 00:26:58,280 --> 00:27:01,400 Thanks again for joining us and we are signing off. 460 00:27:01,400 --> 00:27:06,560 Please stay tuned for more episodes about exciting and engaging topics. 461 00:27:06,560 --> 00:27:11,880 Our next episode will focus on the subject of company, culture and community. 462 00:27:11,880 --> 00:27:17,160 As always, this podcast would not be possible without the hard work and support of our international 463 00:27:17,160 --> 00:27:18,680 student production team. 464 00:27:18,680 --> 00:27:22,520 All music and sound effects are courtesy of Pixabay.com, a vibrant community of creatives 465 00:27:22,520 --> 00:27:25,200 sharing copyright free images, videos and music. 466 00:27:25,200 --> 00:27:27,160 And we are signing off until next time. 467 00:27:27,160 --> 00:27:44,000 We are Students Incorporated because your voice matters.