 Welcome back to the Cyber Underground. I'm Dave Stevens. I'm your host. They call me the professor now because I can no longer be the cyber guy. That's another guy. Once again, I teach for the University of Hawaii Kepi-Len Community College. I teach network security and ethical hacking. And here with me today is an extremely cool guest and an important guy in my life, Gordon Bruce. Welcome, brother. Nice to see you, man. On this side of the studio. Yeah. You hosted Hibachi Talk for how many episodes? Oh, over 200. 200 episodes. And that was the first show I had a guest appearance. You're one of my spin-off shows. The better one is Security Matters with Andrew Lanning. That's my other spin-off show. The award-winning host, Andrew Lanning. That's right. And then there's, you know, me. And me, also ran. You're busy, though. You'd be keeping up with all this stuff. And every year you did kind of an update on cryptocurrency. Correct. And my people need to know about cryptocurrencies as well. It's been an interesting past year to see how it's transitioned. If you think about it, in December of last year, Bitcoin was trading at about $19,000 plus. Yeah. That was an incredible spike. It was unbelievable. And it was now trading at around about $3,900 at this point. Now, that's much more reasonable. When I saw that trending up so fast, I thought, that's not reasonable. Yeah. Well, there's a lot of reasons that it did that. You know, Thanksgiving was one reason when everybody was talking about it at Thanksgiving last year. Right. And then boom, everybody bought in. Yeah. The trading organization saw a huge uptick in new members. I think Coinbase had a 300% increase in the number of members that went to Coinbase right after Thanksgiving. 300%. And so when that happens and they're buying, guess what? Like stocks, everything goes up. Everything. By the way, the market took another nose dive today. Yeah. I saw that. It looks like we're correcting. So that's what I tell everybody. It was just way too hot. My stepfather was a trader for 50 years. And he predicted every single bubble, kept his clients out of it and said, watch out for that. Watch out for this. Watch out. Shift over here to bonds for a while. Yeah. Let's stay cool. Which reminds me, I'm not giving any financial advice here. So I have no credentials or anything that would give me the authority to give financial advice. So what I'm saying here is informational. It's got nothing to do with guiding you on what you do with your money. Good tip. Protecting you, protecting me on the show. Thank you. Yeah. Because it's just what I see happening and the kinds of things that pique my interest because I enjoy playing in this space. Well, you understand the space, too. I mean, cryptocurrency is a blockchain technology that came out, what was it, a decade ago? 10 years ago. Yeah. Yeah. 10th anniversary. You know, I actually know someone who bought Bitcoin at 38 cents. I know. So do I. I don't know if he still has his wallet. Yeah. I know someone that bought it at 38 cents. I know someone who got it a little over 40 cents. Wow. And didn't think it was worth anything and didn't do anything with it. Oh, no. And bought a Starbucks with it and it was gone. So that's why I don't give any financial advice. That's why I don't. Just cut your heart out right there, man. Right now and just throw it on the table. So instead of the brand new car, you got like a latte? I got a latte. That's now, at one point, that was a $20,000 plus latte. Well, that's a great story. I mean, what was my great grandfather told me, bad decisions make great stories. Yeah. And so all of us have a lot of great stories. Everyone likes to say all the good things they've done, but I've made some new clusters at the time. That's a great, that's a great story. You got to tell that when we're drinking sometime. Guess what I did with mine. Yeah. Well, first of all, Merry Christmas and thanks for being on the show. And I'd like to explain, in real simple terms, really quick, what is blockchain? What is crypto? Why does it have any value? Let's take two minutes. Okay. So really the key to all cryptos is the blockchain technology. Satoshi Nakamura, whoever that may have been created this way of doing transactions that could be created in an untrusting network. So I don't trust you. You don't trust me, but a transaction can happen where this blockchain will be authenticated by objective third parties who will verify that that transaction is true. So if I was to give you a dollar that was authenticated in the blockchain, other players on the outside verify that I had the dollar to give you and I gave you that dollar. So everyone's got the same checking ledger and we're all making the notations in it and one can't go rogue. One can't go rogue because they're rewarded for authenticating that transaction. And that's Bitcoin mining. Coin mining. And it depends. Bitcoin uses a certain way of technology. There's proof of work, proof of stake. Ethereum uses another. That's another type of ledger. There's been spin-offs of those. They're called forks where the ledgers have changed because of the length of time it takes to transaction to be verified. There's all kinds of things happening within the industry in the past 10 years. And it will still continue to evolve. But the big players are in it from a blockchain standpoint. That technology is not going to go away. How it gets used is going to continue to evolve. No, there's multiple purposes besides currency. Correct. And you were telling me about the new FedEx one. Well, this is not necessarily FedEx, but there's an Ethereum-based cryptocurrency. I'll call it Token. A token called XYO. And this technology uses blockchain to track things. Persons, people, gifts. Think Amazon, think FedEx, think UPS. And it's made up of individuals like us who have applications running on our mobile devices, etc., where it knows where everything is at a particular point in time. So, it's relatively new. It's using the blockchain technology. FedEx is signing on. They're actually going to launch a satellite next year and put a satellite up that's going to be used. It's going to be using for part of tracking. So, they've got a lot of headway. It's, you know, from a market cap standpoint, they're only in the 20s of millions of dollars. They're not the billion-dollar ones. And they're a startup, but it's a startup of using the blockchain technology to create some value that's not necessarily money. It's tracking things like tracking, where's my iPhone? You know, where are my hearing aids? You know, where are whatever? You can track anything. And that's the whole concept of it. Now, think about the invasive aspects of that from a cyber standpoint. Yeah. Well, India just announced that they gave 10 different agencies the ability to not only track you and get your information off your personal phone and computer, but they have permission to hack your computer and look inside your computer. And look in there. That's a billion and a half people that now are completely unsecure in a Big Brother state. And this would just add that. It's just another way. If you think you're being anonymous, then you can't leave your home. You can't have a credit card. You can't have a car. You can't go anywhere. And maybe even your home, you can't have an address. I mean, you're literally going to have to be a mole somewhere. I mean, because you're tracked. This Big Brother, it is what it is. It doesn't bother me. I'm not doing anything that's illegal that I'm going to get in trouble for. So I don't care. I really don't care. That's a good attitude. Why should I care? It's a good attitude. And just so you get nervous when you're trying to do something wrong. Yeah. Everything I do, I look and make sure that I got my wife on one shoulder and my mother on the other. And everything I do from that point forward, I know they're both there. That's it. That's it. Okay. Well, I usually got my wife on one shoulder and there's a pirate on the other. Yeah. It's a really confusing situation. So I usually end up drinking. It's just the way it goes. Blame it. Blame it on that. There's good parts and bad parts to this crypto. And let's do an update. Let's do your yearly update. Okay. So let's do my yearly update. And I want to talk to you. I think it's kind of a, I'm calling it the Crypto Conspiracy. Crypto Conspiracy. There's a number of things that have gone on over the time. And I know we've got a really short window here. But I'm going to talk to you about like what happened in 1994 and 1995. Now, I've been around. I'm almost 70 years old. Been around in the tech industry for 50 years. So in 1994 and 1995, people bought stocks like Dell, AOL, Netscape. Remember them? Well, let's give our viewers in the cheap seats a little bit of like foundation here. This is when Yahoo first came out. When Yahoo first came out. These are all the straight times. And that was when the institutions, the big players were saying, don't buy those stocks. They were telling individuals like myself, don't buy. This is not, you don't want to buy them. Volatile. Volatile. Don't want to buy them and so on. Well, guess what happens? They were buying them. Yeah. They were, and there's nothing illegal about this. They were forcing the market prices to come down. And they were buying them. And what was shown in 1995 to the year 2000, those tech stocks exploded. And guess who owned most of them? The institutions. I own some that crashed. Yeah. Yeah. We all had some that crashed. But the institutions were the ones that were talking them down and buying them up. And then when it went up, they all, they were all reaping the rewards. So that happened in 1994, 1995, then 2000. And the reason I'm doing this is because I'm going to show you that there's a. There's a pattern. There's a pattern here when it comes to cryptocurrencies. 2003, the dot com. Yeah, we crashed. Big time. The big dot bomb. Everybody went on. The, guess who was, who was, who were the biggest buyers of those stocks during that time? Same institution. Same institution. Same institution as before. So again, this thing is going down, going down, going down. They're underneath buying it. And then now look what happens with those, those tech stocks from the dot bomb area. They recovered magnificently. Magnificently. Yeah. Microsoft, Google, all those Apple huge stocks now. I'll give you an Amazon example. So Amazon, okay. Amazon, I'll give you an example. At one point Amazon, and this is when, when, when it would drop more than 30%. Amazon was $94. It dropped to 54. Okay. Well, what was happening then? Institutions were saying, got to get out, got to get out, get out. A year later, Amazon's trading at 246. Wait, it's at 246, but it dropped there. Now it goes down and it drops to 173. It's still at 173, which is way how bigger than 54. Right. Come along a little bit later, Amazon drops from 402 to 297. Wait a minute. It drops to 297, but it's up from 173. So if you look at the trend, the trend is going up here. And now what's Amazon trading at? $1377 as of today. So, so that's a huge, there's a huge thing. And so I'm always looking at these things saying, are these institutions manipulating the markets? No, that never happens. I mean, it's not illegal. Yeah, but the manipulation, that's just unfair. They can't, that can't happen. I think it's unfair. And I'll, you know, that's, that becomes the unfair. And I'll use, so we'll come back to cryptocurrency. In September of 2017, Jamie Dimon of JP Morgan says that he will fire any one of his employees who invest in cryptocurrencies. That weekend, that, oh, the cryptocurrencies dropped 24%. Bitcoin dropped 24%, just on that statement. That weekend, his company, along with Morgan Stanley, in Europe buys a Bitcoin fund that weekend. Now what they did is not illegal. It's not illegal. Yeah, they bought a Bitcoin fund. And so, so JP Morgan and Morgan Stanley buys, buys, are the largest buyers of Bitcoin fund in Europe that weekend after he made that statement. Strange behavior. What can I say? And so what happens when he did that in September? Bitcoin hits $20,000 in December? Did he sell? I have to go look at his tax return. But so, so, so that, that kind, that kind of thing happens. So right after that happens, remember what I told you, is it 20 grand? Let me know if I'm going over my time. 2018 Soros, we all heard him, he says that Bitcoin is a bubble in January of 2018. When it's at 19 grand, it drops 44%. Perfect time to buy. He drops 44%. In April of 2018, guess what he does? His family fund gets an approval to go ahead and buy Bitcoin. In April. How did that? Really? Yeah. Wow. Well, that's surprising. So I'm just going to go like, so there's, there's all kinds of market manipulation going on here. It's not illegal. It's not even illegal to do it in the stock market. So we're going to take a break. We're going to come back in one minute. We're going to pay some bills and then I told us stay safe. Hi, I'm Ethan Allen, host on Think Tech Hawaii of Pacific Partnerships in Education. Every other Tuesday afternoon at 3pm, I hope you'll join us as we explore the value, the accomplishments and the challenges of education here in the Pacific Islands. Hello, I'm Yukari Kunisue. I'm your host of New Japanese Language Show on Think Tech Hawaii called Konnichiwa Hawaii, broadcasting live every other Monday at 2pm. Please join us where we discuss important and useful information for the Japanese language community in Hawaii. The show will be all in Japanese. Hope you can join us every other Monday at 2pm. Aloha. Welcome back to the Cyber Underground. I'm Dave, your host. They call me the professor. I'm here with Gordon Bruce talking about cryptocurrency. Let's get back into it. I think we ought to reiterate, first of all, you're not giving any financial advice. No, not at all. The show is not giving. We're not telling you to go on and buy Ethereum or Ripple or whatever is out there. It's just, this is just informational. Yeah, just informational. What we, I think I'm speaking to people in the cheap seats again. Cryptocurrencies are like any other speculative investment in that it's a faith-based thing. Whatever the value is, what people think it is. So if people doubt it, it's going to be less valuable. If people have faith in it, the price goes up. And it can be manipulated by statements from people in incredibly powerful positions in the financial industry and from other business standpoints. And so you were just talking about how Jamie Diamond and George Soros both made statements, drove down the price seemingly and then bought when it was low. Related to their organizations that, you know, that there was purchases made. So I mean, those are the kinds of things that happen. I mean, one that happened in February, Goldman Sachs said that Bitcoin would go to zero. It dropped 27%. So Goldman Sachs in February says Bitcoin is going to go to zero. It drops 27%. In May, Goldman Sachs opens a Bitcoin trading desk in May and then they put $400 million to purchase a cryptocurrency trading platform. So wait a minute here. So I mean, I just sit here and I go like, so it's kind of like, this is, it's not elite, but again, it's not illegal. Right. I mean, I can guarantee you that my commentary on Bitcoin is not going to force it to go up as of the end of this show. Definitely won't happen. But this is not an isolated speculation or investment. The whole countries can fail on this kind of individual. The credits can go down. The banks can fail. This is what happened in the late 20s. Yeah, a lot of things. Yeah, lack of faith. Think of the housing crisis and what happened with the, you know, the way all the derivatives and what happened when that crashed and the banks did all their things. I mean, I won't get into that part, but there's also kind of a correlation in that space as well. So anyway, I just, I just, I just sit here and I watch it. I play in this space because it's fun. I get to look at the histories of things that are happening and see what's in your spare time. I do this in my spare time. This is not a full-time thing for me. Are you kidding? But you know, so I just follow, what I like to do is follow the commentary of the people that are followed, the big name players, you know, the Soros and the diamonds and all of those kinds of people. And you know, Christine Largo-Lagaro, I can never get her name right. She was the head of the IMF. Okay. International Monetary Fund. Very fun. She told all the banks that should band together to go against cryptocurrencies. So the head of the IMF says to go to all the central banks to band together to go against these kinds of currencies. Why didn't she say, why don't all the banks go together and band together so we can ban sex trafficking or any other thing? Like, why just cryptocurrencies? Why did she pick that one? You think it's a fear of the cultural shift that the blockchain technology brings to the banking industry? I think that's part of it. So we come back to an initial comment at the beginning of the show. It was based on distrust. I mean, when you and I do a banking transaction now, we have to go jump through all kinds of hoops. When we do an international banking transaction, how long do they hold your money before it gets turned over to the person you give it to? Always earn interest. Three to five days. They take it out of your account. The moment I write that check, they take it out of my account, but you don't get it for three to five days because they're using our money during that period of time. It's not illegal. It's just how the system works, whereas a blockchain and cryptocurrency transaction happens within seconds to minutes. And there's no bank. And that's why there's another cryptocurrency out there, XRP, which is really getting some legs out there because the banks are looking at that blockchain technology as a way for them to conduct financial fund transfers. This is Ripple. XRP? XRP. This is Ripple. So this is Ripple. They have a product called Xrapid that the banks are looking at to help them improve the way they do financial transactions and transfers. And they have to. Look at how the banks are changing the way they operate. They're caught throwing into coffee shops. They're turning into all kinds of things. Banking has to change. It's almost 100% online. It's rare that someone goes into a bank. I still go into the bank because they get a real fancy. I can go get coffee at some of them. I mean, I can sit in the lounge. I can have my computer. I can get on the Wi-Fi. It's secure. I mean, it's all guys and stuff. So XRP is another one that's kind of an interesting one that I'm following because it's adding value to something. Bitcoin was supposed to be, in my opinion, a way to do financial transactions. And I have done financial transactions using Bitcoin. As a matter of fact, a friend of mine in Japan called me yesterday because the company that she works for wants to pay her in Bitcoin. So I was like, well, it's going to be interesting. I don't understand all the laws in Japan, but you better go look at it. Interesting, though, if you got paid in a standard amount of Bitcoins and Bitcoin was on the rise as you're employed, you'd be making more and more money for doing the same job. But if it was going the other way around, you'd be making less money. So you got to remember it. When there's apps, there's downs. That's right. Well, the cycling thing in the market, if you looked at the market in general since 1915 on, it goes through the heavy bumps and waves. But generally, that isn't uphill slope. There's always a rise in the market if you wait. If you look at it over decades, and we just talked about it earlier, especially Bitcoin or the blockchain is 10 years old, 10th anniversary coming up. And if you still go back and you look at the Bitcoins of this world and the heavy swings that have happened, again, 38 cents, the $3,800 in 10 years, I don't care what anybody says. That is really good. Yeah, if it went to 20,000, which it did, that was phenomenal, but it came back to where it's normal. I don't know what normal is. I mean, do more people use it now that it's not a speculative? I still don't have anyone that's paid me a Bitcoin yet, even though my company accepts Bitcoin as a form of payment. Not yet. Hey, QuickBooks has a plug-in to allow you to accept Bitcoin as a form of payment. Would you take it, though? If so, would I? Yeah, I would. Because again, it's like anything. I would hold on to small portions of things. Well, you diversify. Oh, definitely. That's how you survive. I'm not going to take my 401k and transfer it all into cryptocurrency. I can assure you with that. You're a billionaire one day and broke an egg. Yeah, I'll be out on the street. So there's a lot of things that have been happening in this space and will continue to happen in this space because it's only 10 years old. It's still new. That is an infant when it comes to a new financial technology. And I think you're right. It's going to be integrated into our normal banking structure in the next 10 years or so. It's going to be completely normal to just do transactions this way. And I think that you're right also in that if a cryptocurrency comes out and has a transactional purpose, then it is way more valuable than just building value because it exists. Yeah, that's my personal opinion because when I look at these kinds of things, I look, what is that cryptocurrency or token or whatever doing for the betterment of society? And not just filling someone's pocket with money. What is it doing? And if I like what I think it's doing and think it will do, then I'll put a small bit of money into it. But by no means, this is a lot of money. And by no means am I thinking I'm going to walk away here a billionaire because what I've done, it's just not going to happen. But it seems to me that it's a good supplement to your investment portfolio. You could have some stocks and bonds. You could have some real estate. You could have a couple of regular stocks and you can throw in some cryptocurrency in there. And by and large, you're going to beat inflation with your investments, hopefully, over the long run. And that's a good retirement strategy period by some Bitcoin, by some Ripple, by some XYO. That's why I talked to my financial advisor. I hate cryptocurrencies with a passion. She tells me, you're on your own when it comes to this and I don't even want to know what you're doing. Oh, really? Yeah. And she's just dead set against it. And I trust her with my investments because she's the expert in it. But I always like, you know, jabbing once in a while. I go, well, I'm up 300% over here. And she'll go, yeah, but you're down 200% over there. So, but so your Bitcoin and stuff doesn't go into the retirement graph. No, it's not even close, not even close at all. So I mean, it's just, it's just the way, it's just the way I, it's kind of like my beer money or my funny money kind of thing. If it, if it was to go belly up tomorrow, I'm definitely not going to go broke. I can guarantee that. See, that's the perfect kind of investment right there. You have a diversified portfolio and if any one of them goes belly up at any given time, you're still alive. Yeah. And you're okay. You're not going to, you're not going to tank because you invested in a railroad that blew up or went over whatever, right, sank a ship. This is, this is just a good part of a portfolio. And you've given some great takeaways here. This information is great. Treat it like any other speculative investment. You have no idea what's going to happen to this. So don't sink your whole fortune into this. Just play with it a little bit. You don't go to Vegas and put your entire 401k on the crap table. I mean, you just don't. You just don't. But roulette is 35 to 1. But if I win, yeah, okay. Yeah. But how many times we got hit there where you get that one, right, right? You can have it in the 34th time, right? 70th time. So it ain't going to happen. Gordon, thanks so much for being on the show today. We're all out of time. All right. Pleasure, sir. Pleasure. Again, this is not financial advice. This is fun. This is just fun. Aloha, everybody. Stay safe.