 this is Chih-chou. Welcome back to my channel and welcome back to our little discussion we're having regarding personal finance. And what we're gonna do, we're sort of gonna continue on where we left off in the previous videos. If you recall, I loaded up a video telling you my history with cryptocurrencies with Bitcoin specifically and telling you my opinion about cryptocurrencies. And from that video, we sort of kicked that off into a couple of videos where we define the term money and currency which are two extremely important concepts that we have to really appreciate. And from there we sort of took a look at a few different places where we could have invested our money in, right? Where we started off in the 1900s and we took a look at what the CPI has done, what the US dollars has done, gold, land, wages, salary. We took a look at the S&P. We took a look at certain asset classes that you could have invested in, one of them being properties of course and the other one being art, right? And specifically we took a look at what the rate of return for action, comics number one has been. And we also took a look at a fund in the on Wall Street that has given astronomical returns. And we also looked at cryptocurrencies, Bitcoin specifically, right? And that's where I want to continue off from, right? Because as I mentioned, my experience with cryptocurrencies or my experience with Bitcoin specifically, because that's when it really, you know, the thing that really hit my radar back in 2009, 2010 where I minded a little and continued this progression up to this point, right? I've sort of followed the news coming out trying to understand how this, not cryptocurrencies, but the blockchain technology, the protocol that cryptocurrencies is built on, right? With this disruptive innovation, because this is one of the greatest disruptive innovations that has come about for our society and its influence is going to continue to grow, right? So over time, I've sort of tried to, for myself, right, try to appreciate what the changes in our society are going to be, because one of the things you have to do with personal finance is sort of be aware of the different types of investments, different types of technologies, different types of innovations that are coming about within our society that are specifically going to affect the economy, right? And blockchain technology is definitely one of those things specifically focused on finance, right? So as you can guess, you know, when I got involved or when Bitcoin hit my radar, my understanding of Bitcoin was very rudimentary, right? It's evolved to this point where it is right now. And at the beginning, I would, you know, when I would talk to people about Bitcoin, about cryptocurrencies, a lot of people would ask me what, you know, first of all, what this thing is, why it's needed, right? How it works. But all of those questions of the whys and the hows and stuff, all of them basically came down to people wanting to know how they could incorporate that information, incorporate this technology into their lives, right? And my description of what cryptocurrencies are capable of has sort of evolved to the point that we're going to discuss right now, sort of create a visual. So hopefully, if you want to have a better appreciation of what cryptocurrencies are capable of and where they're leading us, this visual is going to help you out. And again, I'm going to mention this again that I mentioned at the first personal finance video that we put out. This is not financial advice. Okay, please don't take this as financial advice because everybody's financial needs are different. My financial needs are different than yours. So I cannot give you financial advice. This is just information that I'm sharing, sort of a perspective I have regarding cryptocurrencies and blockchain technology that I think is going to play out within our society, right? And I'm, you know, I mentioned this, when I told you my history with cryptocurrencies in the previous three videos, that I am, you know, I'm not holding any cryptocurrencies right now, right? So I wanted to be understood that I'm not here to promote cryptocurrencies, right? And on the other hand, I'm not here to trash cryptocurrencies, right? As Bill Hicks would say, I'm not, I'm not promoting it, but I'm not denying it. This is information about a certain type of technology, disruptive innovation that has come into play, that is going to affect everybody's, everybody's life. Okay. Now that that's added away. The thing we have to appreciate about cryptocurrencies is that they have come into play because of computing power, because of the internet, because of P2P interaction, peer to peer interaction, right? Because of a decentralized communication platform, right? That's the core essence of what the blockchain technology is about, right? It's about computing power, it's about the internet, and it's about peer to peer communication. Okay, peer to peer, meaning all the information is not going through just one hub, where a certain, all this information coming here, if it's going through this hub right here, where that could be cut off, and the information no longer will go through. peer to peer means that if there are 10 different routes, nine of them could be severed, and all the information will still flow, right? And there aren't just 10 different routes that information is taking. There are I don't know how many people are on the millions of routes, right? This information, once people start sharing a peer to peer, once it becomes decentralized, the information is available to everyone, right? That is the essence of the internet. Okay. So now that we know, cryptocurrencies are basically because of computing power, because of the internet, because of peer to peer interaction, let's create a little space for them, right? Let's assume this is the internet. Now on the internet, you got everything available, right? Right now in our society, maybe politics, maybe entertainment, maybe news, maybe social network, maybe banking, commerce, finance, right? Maybe trade, maybe gaming, everything exists within the internet. And everything that is outside the internet, almost everything that is outside of the internet, has a connection to the internet, right? So there's a lot of things, this is a different color. It's called different systems that play within the internet, because this sort of really connects up what we're about to talk about really connects up with what we've been building for the language of mathematics when it comes to understanding units and ratios where we put a video together where I called it I guess the Rosetta stone of mathematics which is units and ratios where we have two different systems communicating and all you need to have for one system to communicate to another system is a link is some kind of communication that something here is equivalent to something here, right? So this stuff really connects up to the language of mathematics because again, computing power internet peer to peer interaction, right? So there's a lot of different things taking place online, right? May they be gaming, may they be banking, maybe be entertainment, may they be anything. Okay, now a lot of these things, right? They're communicating together, right? Many things are connected. This is what it means when it's peer to peer. But if you're thinking about P2P, these would be individuals communicating, no centralized system, right? Everything connects up. Everything connects up, right? All of these are different nodes connecting up to I don't know what the numbers are, but now it's for lack of a better word, we call it infinite number of connections, right? Cryptocurrencies are form of technology that exists online. They're decentralized. There's a ledger system where let's say a person here wanted to buy something from this person, right? And the way they can do that trade the way that transfer of information because all trade that happens online is just transfer of information, right? So same with our banking system, right? Same with almost everything, majority of things that we do is about transfer of information, right? So let's assume this person wanted to transfer certain type of information here and this person wanted to transfer certain type of information here for some kind of barter system for some kind of exchange, right? If you want to go tangible, let's say someone here had something that they wanted to sell to this person and this person wanted to buy from this person, right? Now before cryptocurrencies existed, they could meet in person exchange cash, right? Or this person could send check, money order, some kind of transfer of funds to this person, right? Or assets, right? To this person and this person could transfer the funds over there as long as it was trust between them, then that trade could occur without an intermediary, right? If there is, you know, these people don't know each other and the worth of the objects is significant enough that they need to get someone involved to make sure that whatever this person is giving this person and whatever this person is selling in return should be authenticated, should be legitimate, right? So everybody's happy. That's one thing that eBay does, right? There are people selling on eBay and there are people buying on eBay. You can leave feedbacks and there's arbitration involved. You know, there's PayPal in the middle there collecting their fees and transferring the funds and stuff, right? So you can think about it that way outside of cryptocurrencies. Then if you need intermediary, then what you could do is the person could send the funds here, the person could send the assets here, right? And then once everything's legitimate, they send the assets this way and the funds that way and everybody's happy, right? Now, before blockchain technology, before cryptocurrencies, this trade could have taken place in any type of currency of any country, right? Or it could have been could take place between people who are involved in different types of systems online that have their own modern monetary systems. There's a lot of gaming that has occurred online where they've had their own form of currency, they've had their own form of assets, right? You could play the game and acquire trinkets, powers and sell those for other powers, trade those for other powers, other trinkets within a game or outright sell them for fiat currencies for currencies of nations, right? US dollars, euros, rubies or whatever. Okay. So the internet doesn't exist independently outside or not connected to the outside world. The internet exists as part of the real world because a lot of one thing that people have, you know, less and less now but when the internet came to be back in the 90s and early 2000s and stuff before even video streaming, one thing that people used to say, you know, you should spend more time in the real world. The internet is the real world. Okay. It's not separate from the material world, right? Digital and material, they're real world. We use both of them, right? But for visual, let's call anything that it's outside of the internet, these guys. Okay. Now, these are different systems that exist outside of the internet. They could be individuals, me, you, they could be corporations, right? They could be nations, they could be regions, Euro, North American Union, or North America, South America, Latin America, Asia, Asia Minor, Africa, Sub-Saharan Africa, right? Different regions. Okay. So everything that's here before the internet had to communicate physically, right? Things have to be transferred by plane, right? That to be driven, right? Money checks. What are those things called? We used to go, not checks, but money, money orders, right? Yeah, back in the 80s and 90s, people did a lot of money orders, right? Guaranteed funds to be transferred. You still have to wait until it cleared everything, right? When checks were sent to people, things that, you know, it took I don't know how many steps it takes for a check to clear, right? Right now, we can, through the internet, we can send money almost instantly, right? But before the internet, all of these nodes communicated so-called in a physical world and the real world, right? There were certain institutions that, you know, were able to communicate within themselves. Finance was one of them, banking was one of them before the internet really took off in the 90s, right? But now that we have the internet, almost everybody goes through this, okay? Remember, social networks, entertainment, education, right? Trade, finance, health, right? You could go get your own personal physical trainer online, right? You could go get your own personal math tutor online, right? Okay, so everybody here, let's do this in red, let's be consistent. Everybody here has a connection to the internet. Everybody. Okay? Do we like red? Should we do black as well? Red is good. Now, what is cryptocurrencies? What is their function? If we could do all of this trade without cryptocurrencies, what's the purpose of cryptocurrencies? Why do we need cryptocurrencies, right? Because if I'm here, right? If I want to trade with you here, okay, then if I'm going to buy something from you, let's say you have a copy of Amazing Spider-Man number one at a grade of four, right? I don't know what that's going for right now, but let's assume it's going for like $6,000, right? So if I want to buy Amazing Spider-Man number one from you, grade it 4.0, right? For $6,000, I could meet you in person, right? We could go outside at the internet. The odds are you probably listed it online for me to find it, but let's assume we live near each other and we're familiar with each other's collection, right? And you've got it graded and I agree with your grade or it's been slapped, right? Third party has graded it, right? Given their authentication. So we could, you know, if we don't want to go through the internet, right? All those eliminated. I want to buy this from you. I could meet you in person, give you $6,000 and you give me your Amazing Spider-Man number one, grade it at four, and we both go our separate ways and we're both happy. That really doesn't occur very often anymore, okay? Because anybody selling anything, they want to get the most out of whatever they're selling and anybody that's buying, they want to find the best deal. And the best way to do that is not really, in general, to go between one other person or to do it within your locality. The best way to do it is to go online and check, you know, put out an inquiry online to find out how many Amazing Spider-Man number ones there are, right? How much they're worth. Is there any going for auction that maybe you can, you know, get it on the cheap? Or they all buy it now? Can you find a good deal? Is there someone else that's desperate to sell their Amazing Spider-Man that won't, number one, they need to liquidate, right? So everybody goes online to do this now, right? It's the best thing to do, really. Okay, so if cryptocurrencies don't exist, then if you've listed this thing, Amazing Spider-Man number one online, I find it online. If I buy it online, then I'm going to transfer those funds to you online, right? You could still be near me. I could still transfer the cash to you, give you cash, right? And you send it to me or you hand it to me. But that still has to be, you know, there's got to be some kind of record online that has been sold because as soon as we list it online, certain websites, they need to take their cut, right? And there is, and if they don't, you know, if you're going through certain websites where it's not eBay or you're not transferring funds through PayPal, there is some kind of record of that transaction or that offer of transaction, right? So once we go online, let's assume we're not doing anything in cash, right? And that unfortunately may be the way that certain countries go because there are certain countries right now that are trying to eliminate cash from their society. I think Scandinavian countries are heading that way very rapidly and other countries want to hit that way very rapidly, right? And if you take away cash from a society, just a side note, if you take away cash from a society, you take away privacy, right? Because there's a record of everything that you have bought and as soon as you take away privacy, you take away liberty, you take away freedom, right? This is a huge aspect of what's going on online and some of the concerns that everybody has online, specifically people who were involved with it from the get-go, right? Because the internet, the, you know, aside from where it came from, right? The people who created the internet, the pioneers of the internet, they wanted this to be a free open internet with P2P communication, right? With sharing of free information, without censorship and without any surveillance, right? No tracking. That is not what's going on right now, especially through social networks, banking and finance and stuff like this, right? So if I'm going to buy your amazing Spider-Man number one for $6,000 and you're going to sell it to me, then there's a record of this taking place, right? And the record points to you to points to you to selling that book to me and the record points to me for buying that book, right? And if we're doing that record system, making sure that there's a track record of it all, right? Then the odds are, I was transferring money from my bank account, right? And the money was going through PayPal or direct transfer I can do as well, right? But if we're going through eBay, let's say because we do a lot of purchases on eBay, if we're going through eBay, that money's going, the information is going through eBay, transactions being made through PayPal, transaction PayPal going here and the odds are this person's depositing in their bank account, right? So there's a lot of notes here, keeping a pretty tight record of what's taking place, the time involved and there's notes pointing to everything that took place, right? Even if we've traded emails, even that, those emails, information in those emails is linked up with this trade, right? Keep in mind also that along the way, almost at every node someone's taking a cut, right? So the $6,000 is going directly from here to there to you. The odds are I'm paying a little to have money transfer from my bank account to PayPal, okay? Me paying you is free through PayPal, okay? But you getting the money, you pay PayPal, PayPal takes their cut and eBay takes their cut and you probably transferring your money from PayPal to your bank account, the bank takes a cut, right? So this $6,000 transaction is no longer $6,000 between me and you. There's a whole bunch of parties involved where everybody's taking cuts, so they're trimming a little bit from the top, right? So I might have given up $6,000 but you didn't receive $6,000, right? That's really important to keep in mind because what cryptocurrencies allow you to do, right? Is to do this transaction without anybody taking a cut like this, not even close, right? If we did this interaction through cryptocurrencies then I would still pay you $6,000 and you would have probably gotten back. I don't know what the what the commission is that certain places are charging for transferring funds between one person and another person when it comes to cryptocurrencies but you would have probably gotten gotten $5,999, right? The cut was probably $1, if not less, maybe a little bit more, $5, I don't know, right? But the cut that these so-called non-virtual currency exchange, well they are virtual because most of the currency in the world for most nations is all digital, it's not cash, right? It's not paper money. The cut here would have been a lot more if the cut was done online through cryptocurrencies, right? So that's one reason cryptocurrencies are the rage, really, because people are saving money and transferring funds from one location to another location, as we talked about, is secure, okay? It occurs fairly rapidly, is decentralized, and it's anonymous. There's no track record of that exchange taking place. So just imagine if we were doing this but we both had cryptocurrencies, we both accepted cryptocurrencies and used cryptocurrencies, then all we would do, we would have a presence online, both me and you, right? We would have for lack of a word that we can all relate to. We had online bank accounts that didn't have any direct link to us, our location, or how much was in those accounts to a certain degree, or how much we had, right? We could do this trade without any ledger system, external ledger system, knowing what me and you traded. Me and you would be the only people who would know why this trade took place, right? And you would just transfer or send me the amazing Spider-Man number one. If we trusted each other, if we lived in the same proximity, I knew you as a collector, I would just transfer this to you and you would hand it to me, right? I could meet you somewhere and with my phone I would say, what's your, you know, whichever cryptocurrency you would like, right? What's your cryptocurrency account number? And I would just go click, transfer it to you and you would hand me my amazing Spider-Man number one. So the cryptocurrency sort of would take you back to a completely anonymous type of trade interaction, exchange of information, right? Of assets, as if there wasn't no internet. Now we met in person, right? And instead of me handing you paper fiat currencies that in general, almost all, as far as I know, all fiat currencies, currencies of countries devalue over time. We looked at that in the previous video, the CPI, what the worth of US dollars, what the value of US dollars in real terms have done over time over the last 100 years, right? A hundred dollars, a hundred years ago is worth like three dollars and fifty cents now, right? That's its buying power, that's its purchasing power, right? So instead of me buying amazing Spider-Man number one from you for six thousand dollars and a fiat currency that will lose its value over time, right? Because you would have to think about where you're going to invest that money or do another purchase. You don't want to sit on cash, right? Instead of me giving you six thousand dollars paper currency and you giving me amazing Spider-Man number one, I would meet you in person and through my phone, through my computer, I would do the same thing, but it would be a digital transaction, digital currency going to you, to your account. And this would be your bank account that you have where you can do whatever you want with, right? Just the way you would your money, your denominations of whatever currency you're involved in from whatever nation, right? So any bank account, this is your bank account and that's my bank account, theoretically speaking, we should be allowed to do whatever we want with that money. We're not really, right? In Canada, if you go to a bank and to try to deposit, I believe, five thousand dollars cash, you have to fill out a form explaining where this money came from. Through digital currency, you don't have to explain to someone where you required your money from, right? Wherever you may be, whatever country, I'm pretty sure they also have some kind of criteria where you have to explain yourself to them, right? And whenever you're doing interactions with your bank, whenever I'm doing interactions with my bank, there's a ton of fees involved, right? Monthly fees, checking fees, transaction fees, withdrawal fees, right? There's a whole bunch of fees that banks that deal with fiat currencies, currencies of nations, charge people. I pay them myself. I've paid them throughout my life. Everybody pays them. Certain banks have been fined for overcharging their customers with fees, scamming them. With digital currencies, you don't have to worry about that, right? There are other problems with digital currencies, but that's not one of them. You're not going to be paying fees up to Yang Yang, right? So that would have been, if we did this transaction three months ago when Bitcoin was trading at, let's say, three thousand dollars, right? I would have given you two bitcoins, right? You would have given me amazing Spider-Man number one, graded at 4.0 for six thousand dollars, right? That would have been a great transaction for you because each Bitcoin right now is worth 6,500 dollars. So that would have been equivalent to amazing Spider-Man number one, graded at 4.0, increasing in price to 13,000 dollars, which it hasn't, right? Amazing Spider-Man number one hasn't gone up, doubled in price in three months. So that is one other reason people are dealing with cryptocurrencies, okay? And this comes into play with huge organizations as well, right? This link that we have to banking systems could be severed by any nation, right? We do not really have privacy when it comes to our own finances, right? Especially if everything goes digital, if nations eliminate cash from their societies, right? If they eliminate cash from your society, then you have no way of storing cash on the side for a rainy day possibly, right? What happens if you're stuck somewhere where there is, you know, we've had the weather events happening where all of a sudden powers lost within huge regions for months at a time and if we don't have access to our bank account, then we can't buy anything. Right now, some of those places where hurricanes have hit and they haven't had power, the only thing you could use to buy something was paper currency, right? That was the only thing you could use to buy other than trading other goods, right? Goods and services, of course, okay? So that's important to keep in mind as well because this connection with your bank, the money that we believe we have in our bank accounts could be severed at any time, right? There's been laws that have been passed where banks now have the right to take over your account. We saw that happen in Cyprus and similar laws have been passed in the United States, I know and I believe in Canada as well, okay? And certain other nations, right? So the currency, the money that we have in our in the banking system that only uses government fiat currencies is not necessarily secure, right? And we've seen this take place, we've seen this take place in society, in the world, right? One of the places that happened that actually has a link to cryptocurrencies, huge length and it shows us the power of what cryptocurrencies are capable of and the folly of nations and the financial sector of the industry that is trying to prevent this technology, disruptive innovation from doing what it is going to do, right? You cannot prevent technology from filtering into society and this is technology, right? Disruptive innovation but one place we've seen this play out is WikiLeaks, right? A few years ago when the U.S. government prevented funds, donations being given to WikiLeaks, right? So they had their link to their bank account severed. Paypal went no longer, well this would be the same link I guess, right? Paypal, you couldn't donate money to WikiLeaks through Paypal anymore, you couldn't donate money direct transfer to WikiLeaks anymore, right? So basically trying to, you know, the U.S. government and certain governments trying to kill off WikiLeaks, what they did, they severed all of its funding, all of its ability to raise money, to raise funds. So what happened was people started donating to WikiLeaks, right? With cryptocurrencies, right? If this is WikiLeaks, this is their account, money started flooding in from everywhere. One of the things that said online is the Streisand Effect and I've looked up the history of Streisand Effect before and it's funny I think, but one of the things that should be known to anyone now as a Streisand Effect when you try to prevent people from doing something, they'll do it more, they'll be more intense about it, right? And that's exactly what happened. So for the last few years, people have been donating Bitcoins to WikiLeaks and that has allowed WikiLeaks to have a store value of cryptocurrencies, Bitcoin and other types of cryptocurrencies, Litecoin, Lithium and there's like 700,000 cryptocurrencies out there now, right? Very few when WikiLeaks was around when this took place, right? It was only Litecoin, Dogcoin I think was in there too and Bitcoin and a few of the other, I think it was five or six different types of coins that were at play at that time, right? So people started donating to WikiLeaks and they started building up store of value, right? In their cryptocurrencies and for them to get things done, if they wanted to hire someone, anybody that worked for WikiLeaks or anybody that works online and a big way, maybe coders or anything that's involved in the ground floor of the internet of computing technology has a cryptocurrency account, so all that we do to hire someone to get something done is transfer their cryptocurrencies, a certain amount, back to them, right? So all of a sudden, within, you know, since the inception of Bitcoin, since you could buy, we talked about this, you know, people could buy the first bitcoins became available, there was a link connection, an exchange rate for one Bitcoin to a US dollar, which was I think was six cents or something, you could buy one Bitcoin for six cents or three cents or something like this, right? Since that time, Bitcoin has become and other cryptocurrencies have become a legitimate form of currency online, right? So there are people actively doing business, doing trade, hiring people, buying things, through cryptocurrencies online and they're trading it just like a bank account, right? And one thing that happened, I think three weeks ago or so, when I think Bitcoin cracked $5,000 or so, Julian Assange sent out a little tweet showing the graph of Bitcoin, right? And thanking the US government from severing these links that they had to the banking system to PayPal, to online transactions that have records through nations, right? That everything could be tracked severing that link because that forced everyone to not donate to wicked leaks with US dollars or euros or anything else, they donated in cryptocurrencies and Wicked Leaks graph, Julian Assange, the graph that he shared, he said thank you very much for severing these links because the money that they received at that time has gone up 50,000% I believe or is it 500,000? No, it would be 50,000%. Just imagine making an investment where your investment has gone up 50,000% and I think this this happened in 2013-14, like in five years, 50,000% increase in your wealth that I don't know anything else that does that, right? Not even amazing Spider-Man number one, right? So that is the way, you know, a visual that we can use to think about cryptocurrencies, what they are, why they're in play and don't, you know, this cannot be under understated. This disruptive innovation, this blockchain technology came about because of the corruption within our current financial system. May it be Wall Street, may it be banking, right? One of the things that, you know, people talk negatively about cryptocurrencies is there's a lot of, you know, illegal activity taking place here. That's like saying there's a lot of illegal activity taking place in the real world because this is the real world and anybody that says that they fail to realize that the illegal activity taking place through cryptocurrencies right now is dwarfed by the illegal activity that is taking place within Wall Street, the banking system, right? Money laundering. Money laundering here is a drop in the bucket compared to the money laundering that has taken place through the banking system through Wall Street and there is, this isn't hearsay or speculation. Banks have paid governments billions of dollars of fines for the corrupt practices. May it be Bank of America doing robosigning for mortgages. May it be HSBC paying fines for money laundering, drug and weapons money laundering, right? Through their subsidiary in Mexico where nobody went to jail and the fine they had to pay was equivalent to one day or two days worth of profits for that bank. Just imagine if you could launcher millions of dollars personally and if you got caught and the government said oh you're a bad for doing that and they find you two days salary, right? So the corruption occurring here outside of the cryptocurrency market gave birth to this disruptive innovation that is in the documentation that was released at the beginning of we really don't know who released this document saying the reason that they came up with this was because they were sick and tired of the corruption that's taking place within finance, within economics, within our current economic system, right? Because it is completely completely flawed, right? Where institutions, banks, everybody has some kind of bank system, right? Or used to. Some people might not anymore, some people might but have reduced the number of bank accounts they have because now they have perfectly anonymous, private, secure bank accounts online that they can do almost well not almost anything but in the future they will be able to do almost anything online with that bank account that they won't have to go through these systems, right? And this is going to be rolled out in many many many different ways, right? That's one of the reasons data for governments and corporations is so important right now because they want to keep track of what's taking place and disruptive innovation is coming into play with blockchain technology saying no we can still continue to keep our privacy, to keep our anonymity and do what we need to do as long as we're functioning citizens within a society and contributing to that society we should not be penalized for not being part of the elite where you can get loans at zero percent interest where you can commit horrendous horrendous crimes either by money laundering or or criminal activity and not be fine and get away with what you're doing if you're an executive of some of these organizations like equal equal facts where they and corruption is insane but where they get away with crimes and no one's held liable, right? That really the the political turmoil the lack of accountability within finance and wall street and banking all of the news that was released in the last 15 20 years 30 years really gave birth to blockchain technology in the first place this blockchain technology is being implemented as cryptocurrencies there there is unlimited potential for this technology for example if we go back to me buying amazing spider-man number one grade at 4.0 from you for $6,000 right right now if we're going to do it back then three months ago i would have had to transfer two bitcoins to you but if we're going to do it now then i just have to transfer one bitcoin to you right but let's assume i don't know you and you don't know me let's assume we want to make sure that this interaction this trade takes place and we're both happy about it then what we can do is get an intermediary this person here to be the in-between person right so instead of having this person the bank taking a cut ebay taking a paypal then your bank taking a cut this person may take a small cut you ship amazing spider-man number one there i ship transfer over one bitcoin over there or i just transfer over to you with some kind of code authenticating that i transferred this to you this person agrees that the bitcoin or whatever cryptocurrency has been transferred and transfers amazing spider-man number one to me and this type of interaction this type of contract contract tool right trade is actually being enabled through blockchain technology so blockchain technology is not just a ledger system authenticating that the money the cryptocurrency has gone from here to there dandio crypto blockchain technology is being used to write contracts where certain triggers have to be hit for all funds to be transferred and all assets to be transferred or services rendered and funds transferred right so that is where we're going that is the power of cryptocurrencies that is the power of blockchain technology and this is about to rock this and it is rocking that it's it's got finance concerned it's got wall street concern it's got certain governments concerned right which is one reason that a lot of banks a lot of finance right now is working towards creating their own cryptocurrencies right will it be p2p right and going back to p2p this is the crucial thing the only way to stop these transactions is to shut down the internet right because the information is flowing everywhere through billions of notes if these banks decide to come up with their own cryptocurrencies will will it be p2p how many people online will be willing to give a processing power to authenticate those ledgers or will these banks have hubs set up hubs right now are set up as well by certain private corporations authenticating these cryptocurrency transfers and there's blockchain technology come about making that processing speed less and less so there's a lot of things at play right but will people be willing to adopt right will be willing to use the cryptocurrencies that wall street finance the banking sector brings about right there are theories that cryptocurrencies want to do specifically for that to take us into a cashless society right still you have to be decided which direction we're going to head there right but are we will people be willing to incorporate centralized cryptocurrency transfers i don't know not not personally i'm not right but we see where it goes right things could be shut down who knows maybe they will be right but that's the power of the of cryptocurrencies blocks blockchain technology in general and i'll mention one other thing that i mentioned previously is that the key right now like we're going on personal finance level on economics level there's a lot of things taking place right so the name of the game right now is be diversified if you're only involved with the banking system with a certain type of currency from a certain nation this is not personal financial advice but i would be diversifying if you're only involved your only assets you have on cryptocurrencies i would be diversifying if your only form of generating an income is selling one type of product to someone either in your locality or across the globe i would be diversifying right now the name of the game is to diversify one of the reasons is because we are we're in major currency fiat currency depreciation period we're in a major inflationary period in my opinion right asset inflation so there's a lot of bubbles everywhere and currency of nations doesn't get you what it used to right and some of that is because of what's taking taking place online a lot of it has to do with money being flooded into nations right into all nations really right which is devaluing your currency but it's also creating huge inequality because there are certain organizations which are getting unlimited funds at zero interest and they're flipping that and charging people interest and buying assets which is one reason we're seeing huge asset asset bubbles appearing everywhere right and all bubbles have to pop at certain times and some of the cryptocurrencies you know might get a little flak on this but we are in bubble territory with some of that stuff so as long as you don't depend on a lot of things that have appreciated a lot for your day-to-day life to pay your bills to feed your family to keep yourself healthy because health is the number one thing you should be invested in i would be diversifying okay i hope that clears up what it is that you know cryptocurrencies are the way we can use them and all of this has come about because of computing power because of the internet because of p2p interaction which is the essence of the internet right and previously to that we talked a little about this which is disruptive innovation and automation is kicking into gear for a lot of this stuff right now okay we'll leave it there for now and i think the next time we talk about cryptocurrencies what we'll do is talk about some of the pitfalls with cryptocurrency some of the things we should be concerned about may they be real imagined fear-based or not okay that's it for now i'll see you guys in the next video