Our current U3A course is about the Future of Money, and yesterday we were given an introduction to Bitcoin and Crypto Currency (CC) by Harry Satoshi who is President of the University of Canterbury’s Crypto Society. Harry has been an enthusiast for CC since he was in Year 13, seven years ago and has been working in the CC industry for six years. He is currently a fourth year student studying for a B Com in Entrepreneurship, Strategy, Human Resources, and Innovation.
Harry pointed out that CC is a complex subject which he would try to simplify for us. In 2022 7.5% of adults in Aotearoa already owned CC and another 38.2% planned to own or invest in it. Harry runs Cryptocurrency NZ (a social enterprise), and Crypto Consulting NZ. Two years ago he managed to avoid using NZ dollars for a whole year, and he pointed out that we are on the cusp of a massive change in our medium of exchange. The only things that can be difficult to pay by Bitcoin, the most popular type of CC, are rent, and the occasional fish and chip shop.
Bitcoin is an open source, decentralized, peer to peer, digital currency and payment system. It is a global universal currency, native to the internet, and is revolutionary because there is no central control. Bitcoin was introduced in 2008, and is based on technology which can be traced back over 40 years. It is an intangible asset which is completely digital, fast, cheap to send, and online 24 hours a day, 365 days a year, in a network that cannot be shut down. There is a maximum supply of 21 million Bitcoins, each of which can be broken down into tiny particles. It’s important to remember that Bitcoin transactions are immutable and cannot be reversed (Harry’s advice was to send a test transaction first).
Blockchain is an extremely transparent record keeping system, a living, breathing document which keeps a log of who owns what in the CC world. The price of Bitcoin is determined by the free market. It’s an investment and may eventually become the global reserve currency. Currently there are 19 Million Bitcoins in circulation, held in 46 million “wallets”, and every day there are 500,000 transactions. The most secure way to hold your Bitcoin is to have a hardware wallet which costs $250.
CC is a protest to Fiat currencies (i.e. those regulated by a government, such as NZ$ or US$), which can be printed from thin air. Bitcoin is a currency and a payment system – “Mass collaboration powered by collective self-interest”.
Bitcoin transactions are processed by Bitcoin Miners, who add them to the blockchain and get paid in Bitcoin for doing this. These miners form the world’s biggest network, and use 1% of the world’s energy. All transactions and wallets are publicly viewable, and the network has no central weak point. Bitcoin is inclusive and politically neutral.
If you want to buy Bitcoin it’s best to go through a service called Easycrypto. Anything else may be a scam. At the moment one Bitcoin is equal to $NZ104,000.00, and Harry believes that will go up to $NZ1 million in 25 years, and $NZ10 million in his lifetime
Harry pointed out that money is a container to store your economic time and energy so you can deploy it at a later date. Bitcoin is a universal neutral currency which is a protest against financial establishments, and can take over if Fiat systems fail. In Aotearoa there are already 500 shops which accept CC directly, as well as many websites.
As with any investment it’s important not to risk more than you can afford, and I suspect there will be many in yesterday’s audience who will be tempted to dip their toes into the Crypto Currency waters.
There may be those who wish to tiptoe
and try the tempting land of crypto
That’s a huge amount of energy!!
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It surely is, but we were assured some miners prefer renewable energy.
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Thanks Ruth. I knew nothing about Bitcoin.
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I knew very little, have a better understanding now, but don’t intend to invest.
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Your speaker sounds very reasonable about it all, but I wonder if you’d have to have a streak of the gambler about you to take a punt, so to speak. But then, that’s true of traditional investment too, to some extent.
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Yes, you do have to be a bit of a gambler to take on many investments.
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[…] So why are so many buying crypto currency? Some are true believers in non-government. Some have FOMO – fear of missing out – gambling on the hysteria of people. Some want to get rich quick. Some fear the debasement of fiat currency as happened in wartime Germany. When considering whether Bitcoin is money we need to consider whether it is a medium of exchange, a store of wealth, and a unit of account? This talk was an excellent antidote to last week’s discussion of Bitcoin. […]
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