 What are you doing? This is Gordon O. The Tech Star here at Hibachi Talk. Please grab yourself a live-action, pull up a chair, sit down and join us today. It's got me, myself, and I. Andrew is traveling, and the security guy, and Rick's the fund meister is traveling. So I got no co-hosts, and I have no guests. And Agus is traveling, so we don't have him either. So today we're going to do an update, number two in a series that I am putting together on cryptocurrencies. So about a month ago I was asked to do a Cryptocurrency 101, how to understand cryptocurrencies, aka Bitcoin, Ethereum and such, in 28 minutes. And so I would encourage you to go back and look at that video, it's on YouTube under Hibachi Talk, and again I did my best to explain to you how cryptocurrencies worked and such. But I've been getting a lot of inquiries and requests to talk further about cryptocurrencies of Bitcoin and the like on what that really means. And what I find is very interesting, and even as a lesson half an hour ago when I mentioned this to someone, there's still people out there that say it's just a form of currency that's used by the bad guys. And I'm going to prove to you today that that is not the case. I'm also at a disclaimer here that I'm not telling you to invest in Bitcoin, I'm not telling you not to invest in Bitcoin, what you do with your money is your business, and what I do with my money is my business. Even though the DCCA did try to get involved in my Bitcoin, which I didn't let them do. So we'll spend a little time, we'll go through that, we'll walk through what's happening. It's been in the news a lot today and yesterday and the day before, because Bitcoin itself went over $2,000 per Bitcoin. It broke that barrier about three or four days ago, so it's pretty amazing what's going on. So, but let's start, we'll start off and Rich is helping me, we've got some slides to help with this show this week. So we're going to pop up the first slide, and I'm just going to give you a, well this is the update, it says May 25th, this is May 24th, but by the time we get everything set up and everything, it'll be out on May 25th. So I made a mistake, but I'm using that as an excuse anyway. Anyway, so let's look at cryptocurrencies, it's definition. It's a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds operating independently of a central bank. So if you think about, when you move money from one bank to another, one country to another, you're going through the banks. This is a way of doing it without going through the banks, okay? The other point it is, it's a single source of truth. So a cryptocurrency, whether it be a Bitcoin, which is a type of fund, or Ethereum, which is type of fund, or Ripple, which is a type of fund, it's a single source of truth. This blockchain and the ledger, which I talked about in the previous show, is what verifies that this is a single point of truth. And the other thing is it's a trusted establishment of collaboration. So I have a key, you have a key, these are kept to ourselves, they allow the exchanges of this currency to occur. It's also a transparent transfer of ownership. And I just want to sit back here and everybody goes, well, I got my bank. And you trust your bank, you can trust your bank. There's a lot of people that trust his Lehman brothers, and I know where they are today, and they're not sitting at home in their palatial homes anymore, because Lehman went belly up a few years ago. So anyway, that's the high level definition of what a cryptocurrency is. So let's talk a little bit what's happening in the news today, the news this week, because it's really exploded, and a lot of things have happened. So Rich, I'll just pop up the next one, it's called Bitcoin in the headlines. Now Bitcoin is a type of currency. So look at this, it's like the US dollar is a type of currency. The yen is a type of currency. The peso is a type of currency. So Bitcoin is a type of cryptocurrency. And it's one of the leaders that actually is the largest market cap, and I'll talk about that a little bit later, in the cryptocurrency industry right now. But some things have just happened in the past, in the short while, week or so. Leading Japanese ATM manufacturer, Oki, gets into the Bitcoin and ATM business. So Oki is going to start producing in Japan ATM machines that will allow you to transfer and withdraw ATM, Bitcoins. So that's happened. Now in Honolulu, there is a Bitcoin ATM in downtown Honolulu. If you go to the coin store, just out of the hotel street and Bishop, in there they have a cryptocurrency Bitcoin ATM machine. So there is one here already. Now here's another interesting one, is that to transfer Bitcoins, you need exchanges and such, and I use a number of them. But this new entity that's going to be starting up called ledger holdings, they just generated $11.4 million in funding, VC money, to open up a US Bitcoin exchange, Opsons exchange. So there are others around there that now, just to show you how popular it's getting, is that they were able to generate $11.4 million in such a short period of time. Japan Airlines just announced that they accept, they'll start accepting Bitcoins as a cryptocurrency. When that happened, this fever just started to spread throughout Japan. And I've got some other numbers a little bit later, I'll show you on what's happening in Japan. And then I got to tell you this story. This is a pretty amazing story. And Domino's Pizza accepts Bitcoin, just so you would know that. But about eight years ago, Domino's accepted 10,000 Bitcoin for two pizzas. So they accepted 10,000 Bitcoin for two pizzas eight years ago. Bitcoin trading now at about $2,400. So those pizzas cost $20 million if those coins are still around. But just think of that person that had been hanging out of those 10,000 Bitcoins, what he or she might be worth today. So that's what's kind of happening in the news side. So let me just pop you to the next slide, which is a kind of historical snapshot. And I just took this picture from the internet on May 21st just to show you. And if you go and you can search on Google and Bing and such, you can look at the historical snapshot of cryptocurrencies or Bitcoin or whatever. And these charts will show up. But when you sit and look at this, the number one up there is Bitcoin at the top of the pile, their market cap is $34 billion. That's with a B. So when people tell me that this is not an industry, this is larger than your miles from your Hawaiian miles or your American miles or your native miles. That's a $4 billion industry. This is a $34 billion industry just in Bitcoin alone, which by the way, you can convert to fiat currency anytime you want. So now what's interesting, the new one on the block, and I'm going to talk about them in more detail later, is this one called Ripple. Now Ripple is $13 billion market cap. They just came on the scene not that long ago. And they're trading at $0.35 for a Ripple coin. Mind you, they've got 38 billion Ripple coins in their particular market as opposed to Bitcoin has $16 million in there. And we'll cap out at about $21 plus million. And then Ethereum, which used to be sitting at number two, is now sitting at number three, $12 billion in market cap trading. On May 21, it was trading at $131. Now it's almost trading at $200 as of today. It is just amazing how this thing has really started to take off. Then you've got Neem, Litecoin, Dash, Ethereum, Classics, Stellar Lumens, and it goes on and on and on. And each one of these cryptocurrencies serve a particular purpose in a particular market or market sometimes they overlap. But Ethereum, for example, was one that the banks were looking at as a way of doing their transactions for transferring funds from bank to bank. Ripple is looking at theirs for international transactions from bank to bank. And I'll talk about that one in just a second. So anyway, it gives you a sense of a historical snapshot. In total, the cryptocurrency industry is $60 billion. $60 billion. That is not something to shake your head at and say, is this really something that's going to last. It's very volatile. There's no question about it. But it reminds me of the internet when it first became available. People started building websites and said, why do we really need this internet thing? And I was around when it came out. And then there was a, and when Twitter came out, and one of the first Twitter accounts that ever came up was a local guy here in Hawaii who opened up a Twitter account. He was one of the first. Aaron Nakoka is the guy's name. And he introduced me to Twitter. Who would have thought Twitter would be where it is today? Donald went off your thumbs one day. But anyway, Donald was using it as we all know. So Twitter, Facebook, and everything that's happened on the internet, no one was giving it much credence at the time when I was there and now look where it is today. Anyway, so Bitcoin, we'll just talk about Bitcoin. Over $37 billion, we talked about that today. Now, a lot of transactions we do now with our mobile devices, our mobile phones. This is what happens. I have a Bitcoin wallet on my phone. I mean, some of you have Starbucks wallet, some of you have Apple Pay, some of you have whatever you're using here to use these types of payments. But 50% of the world population has mobile phones right now. So 50% of the world has a mobile phone. Now, think what's going to happen. By the year 2020, it's predicted that 90% of the world will have mobile phones. These things that we are throwing away are going to the third world countries. Every time we do an upgrade, it gets sent to a third world country or somewhere else. So it's just growing like crazy. Here's another thing to point out is that Japan and China announced this week that they're going to integrate Bitcoin into their banking systems. So both Japan and China are going to introduce Bitcoin into their banking systems as a form of transaction of currency that will go amongst retailers, individuals, whatever is going to happen. By the end of this year, it's expected that Japan will have 300,000 stores that will be taking Bitcoin. 300,000 stores in Japan will accept Bitcoin probably over this mobile device as a form of payment. And GIF, G-O-I-F-T, I don't know if any of you know that mobile app. It's an app that you can download and you can get GIF cards or cards for all the kinds of organizations like Amazon and such like that. They were early adopter. 2014, they started accepting Bitcoin. So imagine how much money they might be sitting on today. Serious, old-fashioned series accepts Bitcoin. This is not US, but I'll tell that in a minute. But into it, you know, your TurboTax, those guys or your accounting software, they'll accept it. Remax London accepts Bitcoin. So Remax London, now if you want to do a real estate deal, will accept Bitcoin as a form of transaction. Apple accepts it. Even Kmart accepts Bitcoin as a form of transaction. The MIT bookstore, you've got MIT, MS that uses institutional technology. You can go to the bookstore and you can use Bitcoin to buy your books. Overstock, it's another online retailer, many of you might be using. They too accept Bitcoin. Even the Sacramento Kings NBA basketball team accepts Bitcoin. So, I mean, it's getting into all kinds of industries. Target or Target, depending on where you live, they accept it. Whole Foods, now you'd expect Whole Foods, because they're the tree huggers and all this kind of stuff that goes on. I always pick on Whole Foods people, but I go there too, so. But anyway, they accept it as well. And even Victoria's Secrets will accept Bitcoin. So, I mean, there's any kind of industry you can think of almost to this day, including the auto industries, will accept Bitcoin as a form of payment. Some have limits on it, they'll only accept so much. Some have small limits and some have larger limits and the like. But where's one of the things I just loved? The former Fed Reserve chairman, Bernanke, still says he has no confidence in Bitcoin. So, if you want to believe Bernanke, I'll leave that entirely up to you. We believe Lehman Brothers, when the time was there, we saw what happened with them and when the banks collapsed and the mortgage and housing industry collapsed. The mortgage industry collapsed, we were all trusting in the banks and what went on and we saw what happened in that. So, to me, that kind of blows the wind out of the sails of can I really trust this? And again, like I said, I'm not telling you to purchase it or not purchase it, but I personally have the opinion that this is here to stay and will be here to stay for a long period of time. So, what I'm gonna do with that, I think that might be a good point where I can just probably just take a pause. We're coming up the halfway point, we'll take a small break and then I'm gonna come in and talk to you a little bit more what's happening in this cryptocurrency Bitcoin and a like industry. And again, like I said, I would encourage you to watch the first video which explained how this thing works. We'll be back in a minute. Match Day is no ordinary day. The pitch, hallowed ground for players and supporters alike. Excitement builds, game plans are made with responsibility in mind. Celebrations are underway. Ready for kickoff, MLS clubs and our supporters rise to the challenge. We make responsible decisions while we cheer on our heroes and toast their success. Elevate your Match Day experience. If you drink, never drive. Gorda, the techs are here, talking to you about cryptocurrencies. Welcome back to Hibachi Talk. Grab yourself another libation, sit down and join us and we'll continue our story on cryptocurrencies. What are they gonna do is we're gonna jump back to slide number two and just again define what cryptocurrencies are. I mean, it is a digital currency in which encryption techniques are used to regulate the transfer of this currency amongst verified individuals and organizations. 50% of the world does not have access to a bank. So if you take a look at Central Asia and Eastern Europe, 193 million adults do not have access to a bank. 193 million. Eastern Asia, Southeast Asia, 876 million people without having access to a bank. The Middle East, 136 million people without access to a bank, which means no way for them to get funds. Except for now, cryptocurrency which enables me within minutes to transfer cryptocurrencies to any one of these individuals or businesses anywhere around the world at a very small, nominal fee. And if some people are making $25 a month or $2 a week in pay, paying them 10 or 12% to cover that cost of that transaction puts them out of the market. In this case, it's pennies to get that transaction done. So that's, I think this may be one of the most important slides to take a look to make a note of is like 50% of this world does not have access to the banks. I mentioned earlier, 90% of this world will be having mobile phones by the year 2020 between Bank of America and somewhere else in, you know, Royal Bank of Canada or in Europe or whatever. It takes a lot of work and it takes a lot of time. So what Ripple is doing is they're getting all of these banks on board and they're gonna use their blockchain and the cryptocurrency called Ripple as a means for them to do rapid, low-cost transactions amongst and between the banks. And right now, I just, on this slide, you can see the banks that they have signed on. They've got Bank of America, Merrill Lynch has signed on, Uni Credit, CIBC, I think it's the Canadian Imperial Bank of Commerce, UBS, BBVA, Rise Bank and so on. I don't see any Hawaiian banks yet, but I'm going to be talking to some of them in a little while about whether they might want to jump into this particular opportunity here. Cause I know a lot of people have a lot of Filipino friends that they transfer a lot of funds to the Philippines on a regular basis to support their families over there. So again, take a look at that. That's an interesting idea of how these currencies are going to be used to fund all kinds of projects. And think about the economic growth that will happen in these countries as a result of this independence over traditional banks and traditional ways of doing money. So now the next thing is that we talk about, well, where do you keep your Bitcoin? I mean, there's not a coin. I'm not going to have it in my wallet. There's not a bill attached to it. I can't see it and feel it. And I remember, I've mentioned this at some of my other shows is that I used to use an exchange called Coinbase. Now Coinbase allowed me to keep my cryptocurrencies in their particular exchange. The Department of Commerce and Consumer Affairs here in Hawaii set a notice to them and said that anyone that if they wanted to do business in Hawaii, they had to keep 100% of fiat money in a local bank. 100% of fiat money. So that means if it's trading at $34 billion, they'd have to keep $34 billion in fiat money in a local bank. Local banks don't even have to keep that same equivalent in there. Local banks keep about eight to 12% in the bank. Anyway, what that forced them to do was notify all of us that we're using them to do our transactions, our cryptocurrency transactions, to close down our accounts with them. So we closed down our accounts with them and we went elsewhere and there's lots of elsewhere. So we all just went elsewhere and DCCA is going to go around and chase everybody to see whether or not they have the right to trade cryptocurrencies in this state. I just go to another state or another country, as a matter of fact, I went to another country. So, but it raised an interesting question. It's like I keep these cryptocurrencies in exchanges, but lo and behold, a new piece of technology came out and it's called a keep key. And a keep key is a device that allows me to download my keys and my Bitcoin keys and my Ethereum and my whatever that they keep key supports onto this little device right here. This little device now has all my cryptocurrencies on it for the most part. And so now I can move these cryptocurrencies in and out of this particular device at any time I want. As a matter of fact, before the show today, I went and moved some cryptocurrencies from one exchange that I'm at on another country and move them to this device. So it sits here. Now, if I lose this device, not a problem. The way the security and everything is set up on these things is I can go buy another one and recreate this entire system all over again. So where am I keeping my cryptocurrency? I'm keeping them here. Now here's another thing that I'm doing is I used to buy savings bonds for my grandchildren and now my great-grandchild. And I've decided that what I'm going to do is I'm going to risk it and I'm going to give them a keep key and it's going to have a cryptocurrency on it of some denomination. And then they will need to learn how to use it because I'm not gonna show them. They can learn how to use it but they will be sitting on fiat money at any time they want to use this fiat money on sitting on this lovely little device called a keep key. Very, very cool device. So that kind of lays it all out for you. And I just now want you to think about the social and economic ramifications of cryptocurrencies. If more of us start using it, the government will have to get involved because how are they gonna tax it? How are they gonna tax what I've got in here? How are they gonna tax the income I make on this? If I buy a stock and it goes up, I will get taxed on it. With this, there is no way at this point in time that their ability to tax me on this. So the governments are going to get involved and the moment the government gets involved and starts saying we're gonna tax it then it's gonna give it more credibility and who knows what will happen in this industry. The other thing is that people tell me that, well, the WannaCry virus came out a couple of weeks ago and they only accepted Bitcoin cryptocurrencies as a form of payment. Again, global, easy way to trade. They were saying the Koreans did it, whatever. Easy way to trade. They only wanted $200 or $300 to unlock your files and they would accept cryptocurrencies. Cryptocurrencies can be tracked. So people say, oh, it's an underworld thing, it's an underworld thing, it's an underworld thing. No, it is not. If someone is willing to make the effort to track where these cryptocurrencies go, they'll be able to determine who, when, where, I don't know why, other than the money, these countries and or individuals have been using cryptocurrencies to get their ransomware paid. So it's something to be looking at, something to really concentrate on. Even if you don't want to get involved in it, I think it's a fun thing to watch. You can download some apps that will give you updates on a daily basis, on an hourly, minute basis on what these cryptocurrencies are trading for. As a matter of fact, when I take a look right now, Bitcoin is now trading at $2,440.39. It's gone up 24 bucks in a day. It's gone up $45 in an hour. Ethereum is now trading at $198.61. It might break 200 shortly. It's gone up $3.48 in a day and it's gone up $28.66 in a day, I should say. Now, in one year, Ethereum's got up 185 bucks. It's now trading at $188. Bitcoin has gone up $1,992.21 in one year. Again, I can convert this to cash tomorrow. I can cash in a few minutes today. Anyway, so there we are. This is cryptocurrency 2.0. We did 1.0 about a month ago on how it works. This is 2.0, how it's being used and where it may be heading in the future. Again, I'll say, I'm not telling you to invest. I'm not telling you not to invest. This is just a way to educate you on what's happening and what I think is one of the newest and coolest technologies happening in the world today. With that, we're gonna close out. We have no autograph solo cup unless I gave it to myself. So enjoy your rest of your day. I'm going to go to the beach, which is right there, and try to get a sand on this sun, on this bald pink head of mine. Anyway, like I always say at the end of every show, how you doing?