okay so in this video I'm gonna be asking what is crypto currency and
crypto currency has really been in the news a lot recently and I have really
been struggling to understand exactly what it is so hopefully I can clarify
that in this video so I'm going to ask how does cryptocurrency work
and then finally why has it been in the news and why is this cryptocurrency been
generating such a fuss okay so first of all what is cryptocurrency
so basically cryptocurrency is a digital currency and I suppose it is typify by
the most famous cryptocurrency which is Bitcoin so this is basically a currency
that can be mined by computer coders if you have the right kind of computer and
created online and then it is traded online in the way that a normal currency
like the PI under the daughter would be traded in the real world so I suppose
the difference between cryptocurrency and things like the dollar or the pound
is that first of all anybody can - if they have the right kind of skills which
most people don't under I kind of computer anybody can buy or sell --is--
so you don't need approval from the banks or you don't need any kind of
third party to let you access this you can just go and buy it so from that
point of view cryptocurrency is completely divorced from all kind of
bank or government regulation so it has nothing to do with banks or governments
it solely lives in the online world and I suppose from that point of view it
means it is maybe freer or more accessible than than traditional
currencies so looking back on what I said there this basically means that it
is quicker cheaper than traditional currencies and it's also seen as as
being more reliable because each piece of cryptocurrency or each coin
its own unique number so you can't lose it or it can't be hidden in the same way
that that currencies can so it's in theory it doesn't have the same
potential to be corrupted I suppose and also you know this was part of that
element of at this fact that it's it's it's got its own unique number it means
that you don't have to add your name to it or you don't have to as I said use it
through a bank so compared to normal currency cryptocurrency is extremely
anonymous and from that point of view it has traditionally been associated with
illegality because it can be used and you don't have to track or trace who's
using it who's buying us who's selling us because it's all just done in in this
sort of digital language so so that means that it's it's even though it's
supposed to be more reliable and more secure it does seem to have been abused
and it is something that he was quite a lot in in the dark web which is the sort
of black-market part of the internet so in the last little while and
cryptocurrency has really I suppose exploded so it started off as I said but
the most famous cryptocurrency which was called Bitcoin but since then lots of of
tech startups have learned have launched their own coins and there's an element
of the sort of gold rush about such so there's been a huge number of initial
coin offerings or I cos in the last six months and at this point there is
something like 170 billion and worth of
transactions happening around around cryptocurrency so it's become a very
very lucrative industry but I think part of the problem with us is that there is
a significant lack of understanding about what actually is involved with
crypto currencies people don't necessary understand the risks that are involved
with us and I suppose at the end of the day you are giving money for something
that exists digitally so some people have suggested that it's almost a little
bit like a pyramid scheme so if everyone puts their money in um it'll build and
build and build and obviously as we've seen from from history those kind of
pyramid schemes just don't work okay so how does it actually work and why is
this is it so unique so basically as I said it's decentralized so you don't
give your name you don't have to give your bank and then at all all of the
actual transactions happen on this public digital ledger basically called
blockchain so everybody exchanges on on these different blocks and a couple of
hundred different exchanges makes off a block and every blockchain keeps a
secure record of each transaction so every time one coin is sold and it is is
logged every time something's bought or sold it's locked so actually one of the
things that people are most interested in is this decentralized function of a
blockchain and some people suggest that actually even if cryptocurrency never
works maybe blockchain is going to be the
technology that will actually I suppose withstand the tests of time and become
very useful for people who are interested in kind of decentralizing the
Internet okay so why is why of course your currencies been in the news so much
well basically from what I've just said a magical about these initial coin
offerings the value has absolutely exploded and investors the world over
are all rushing to buy cryptocurrency so even with Bitcoin for instance the value
of Bitcoin has gone like stratospheric in the last number of months and even in
May people were like freaking out about the fact that it had gone to something
like to $2,800 for one Bitcoin and more recently it's caught up to
something like $5,000 so the value has really exploded and those who are
support Bitcoin think that it's a way of I suppose dealing in currency and a
value exchange that doesn't involve banks and you know financial
institutions have lost the trust of so many people that this is the first real
alternative to financial institutions and it's maybe the future of currency so
it's got lots of celebrity backers like Floyd made with Floyd Mayweather Jamie
Foxx Paris Hilton it's also got the backing of some nations so India Japan
Sweden are all talking about developing their own digital currencies and also I
think in terms of actual banks Goldman Sachs have suggested that they are
thinking about setting up a digital currency or a crypto currency unit
within their company structure so so it does definitely have some legitimate
backing now those who are against it and this is another reason why it's been in
the news because a lot of academics a lot of a Communists think that it is as
I said already kind of like a pyramid scheme
and it has the it has the danger to be very very damaging for people who were
investing in it so for instance again a safety example of Bitcoin the person who
created Bitcoin has set up various different structures so that there can
only ever be 21 million bitcoins in circulation so once it reaches out 21
million no more bitcoins will be made and it will just be the exchange at 21
million so this is a means to basically stop inflation from happening and also
it means that the price goes up but basically it supposed to make it more
secure anyway if Bitcoin get hacked and somebody steals the
21 million coins that means you'll never get your money back because every
transaction that's done with a Bitcoin unlike a fraud fraud credit card
transaction it's irreversible you can't reverse the
transaction and that means - actually it's quite volatile and insecure and
it's it's really at the mercy of hackers who could just wipe the whole thing so
it's it's it's dangerous from that point of view and also the CEO of Morgan Chase
Bank he said that like you know because it's such a pyramid scheme that
everyone's just running and I bubble bubble bubble they're putting their
money into something that doesn't actually isn't tangibly worth anything
that it's just a fraud and that he would fire anybody who was employed by him who
was caught to be trading in cryptocurrency on the spot similarly you
know obviously central banks are worried about the rise of cryptocurrency because
it might actually destabilize real currency and at my undermine the value
of real currency so is it a threat to the to the world order from that point
of view so I think some there's been some discussion about - and we've seen
countries such as China completely outlawed the use of the trading of
cryptocurrency so it's definitely a rising issue and I think it's something
a lot of people are comparing to like the dot-com bubble of the 1990s so I
mean I know people who have invested in us I know that there's lots of people
who say you know it's it's a kind of new it's the new hope in terms of currency
and it's going to be a step away from up from the lack of trust in banks but when
you listen to really um well-versed economists talking about it it does
certainly seem to be something that I would be quite shy of and I certainly
wouldn't be recommending anybody I know to invest
but maybe I will be proved wrong I would like to know what everybody else thinks
so anyway thank you very much for listening to this video I hope I've
needs to introduce you to something maybe and if I have to explain it all
that well thank you for subscribing if you subscribed please subscribe if you
haven't and I hope I see you soon
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