Latest / The Curve / RTC21: Is cryptocurrency something you should be investing in?

Transcript

RTC21: Is cryptocurrency something you should be investing in? · The Curve

• 0:00
  Hello, Curve Kimmy, it's me, it's me, hi, hi, problem, it's on the problem, I do wish I could sing like
• 0:10
  of all the things. I wish you could sing as well. I know. Sorry. The point of interrupting this
• 0:17
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• 0:37
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• 0:44
  know why. I think it's just that people don't realize it's helpful. So people probably just haven't
• 0:48
  done it yet. Or maybe they don't like us. But why would you listen week after week? Exactly. Or even,
• 0:54
  you know, I don't think it's that. I hope it's helpful. So, but if you do like the podcast and
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  Yeah, follow us. It takes two seconds. That would be amazing. Like you could have done it by now.
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  Yeah. Yeah. Maybe they have done it. Maybe. Yeah. Thank you. Thank you.
• 1:24
  Welcome to season two of Raising the Curve, a conversation for women who want to learn more about money,
• 1:32
  their money, for the future they want to have. The pursuit for financial confidence and increasing
• 1:37
  your wealth should be a simple one. So this is a place for you to learn about investing in finance
• 1:43
  in a non-scary or intimidating way. Thank you for being here and for listening. Because together,
• 1:49
  we really can raise the curve. So I saw it. Oh, I'm really excited for today's episode. Why?
• 1:55
  Because it's cryptocurrency. Oh, yeah. It's something that I know that you don't really like crypto,
• 2:01
  but I have had some very interesting conversations about cryptocurrency in the last few weeks. It's
• 2:06
  probably been the most requested episodes that we do. Let's just, I think we can hear always
• 2:12
  crocs walking out of the studio. All right. He's gone.
• 2:18
  Our amazing sound guy, Roy, just wandering out of the studio. Yes. It has been super requested.
• 2:24
  I think it's just because it's there's so much buzz around. Yeah.
• 2:28
  The everyone's talking about it and it's going up. It's going down. It's going left and right
• 2:32
  and circles. And so everyone is talking about it. And so they want to know, they want to understand
• 2:38
  it more, which is great. Last night I was at a barbecue. And one of my friends was talking about
• 2:43
  how about a year and a half ago, she invested $1,000 in Bitcoin, $1,000 in Ethereum. Ethereum,
• 2:49
  that was good. And she said if she hadn't touched it in the last year and a half, she would have
• 2:54
  made 20 grand. Yeah. And then itself is wild to understand because to save $20,000 in normal life
• 3:02
  if you're on a salary takes honestly sometimes 10 years to save that kind of money. So it feels
• 3:08
  really, it feels like a quick win. It feels like a quick win. But then you've got to be careful
• 3:12
  because the things that feel like quick wins, they can also not be. And I think that there's
• 3:18
  a whole other discussion of digital currencies becoming used in everyday life and becoming the norm.
• 3:25
  And if you think that's going to happen, then is there a place for Bitcoin and therefore that's
• 3:31
  that's a massive structural trend that's going to be happening. But I think in terms of investing
• 3:36
  in Bitcoin, it is still volatile and yes, everyone wants a quick win. I think I just wanted to
• 3:42
  caveat this conversation by saying that when something goes up so quickly like that and you can
• 3:47
  make such a quick win like that, you can also lose money very quickly as well. We always harp on
• 3:53
  about taking a long-term view within investing and you really do need to because you hear stories
• 3:58
  like that and then people jump in and they buy Bitcoin or any other type of cryptocurrency,
• 4:04
  they don't actually know what they're buying. You don't actually know how it works,
• 4:08
  why the price moves up and down, what it is you're buying, how it's produced. And I think that's
• 4:14
  a really, really dangerous thing is that when you start investing in things, you don't know just
• 4:19
  because you've heard that you've heard all these other good stories of how the price goes up.
• 4:22
  It's hard not to though. I've been listening to you for talk about this stuff over a year now
• 4:29
  and I still, last night when I heard that story, I was like, God damn it, I know, but why isn't
• 4:35
  Victor told me to go? Because also like probably three, four years ago, I remember working when I was
• 4:41
  working radio over in Australia and one of the producers had invested a lot in Bitcoin when
• 4:47
  a first cat was really had that first massive boom. And he made so much money and I don't know why I
• 4:54
  didn't think then look into it and research it and maybe. Yeah, but I didn't because I just
• 4:58
  thought it was a sort of Wambam and gone again. But actually, it's cryptocurrency's been around
• 5:03
  for 10, 20 years. Yeah, it has actually started in 2009, which is so crazy. And this is sorry,
• 5:10
  just to hop on about my picnic chats last night. But one of the other girls that I was speaking
• 5:15
  to last night said that her dad back in the day. So he, I can't remember what he did for work,
• 5:22
  but he was apparently saying that years and years ago, if you were doing works as a web developer
• 5:28
  or you worked in apps or you know, any kind of sort of tech industry and a friend couldn't afford
• 5:33
  to pay you what they would normally be paying you that they would pay you some of it or all of it in
• 5:37
  Bitcoin, which back in the day was worth nothing. So it was basically just a mate's right. It's like,
• 5:41
  I'm helping you out. I realized that what you're giving me is kind of worth nothing. But apparently
• 5:46
  there's heaps and heaps of people who were paid in Bitcoin, you know, like a thousand Bitcoin,
• 5:51
  whatever, 15 years ago, and had hundreds of millions of dollars in their account and they've
• 5:56
  forgotten their password and can't log in. And apparently it's just like a real problem because
• 6:01
  there's something around, you know, your past, you only have 10 times, does it remember your
• 6:04
  password or something. And so all these people have quite literally hundreds of millions in these
• 6:10
  accounts and they can't get in. Could you imagine that? Oh my gosh, I would be like,
• 6:14
  wrecking my brain with, oh yeah. That would be my full-time job, but they're figuring out my
• 6:19
  password. Well, it would pay off if you found it. Yeah, it's pretty mind-boggling to be honest
• 6:25
  and just like a whole other world. It's yeah, but it's fast approaching becoming. It's starting to,
• 6:31
  that's what I was sort of meaning at the start when I was saying that it's becoming quite talked
• 6:35
  about in social circles because it's not this foreign thing where people are like, oh, Bitcoin,
• 6:42
  I might have heard that once or twice. It's yeah, most people have heard of it. Yeah, and it's,
• 6:46
  and Bitcoin is, I mean, there's, there's over 10,000 different types of cryptocurrencies. It's
• 6:51
  crazy. Kind of like stock that you've got 50,000 stocks that you can invest in, but the most popular one
• 6:57
  is Bitcoin. And that's why we always refer to, kind of, a bit different, right? Is that the
• 7:01
  difference? But it's, it is the second, yeah. But yeah, Bitcoin's the most popular. It's been around
• 7:06
  the longest, but it gives a bit of history, which I found quite interesting when I was doing some
• 7:11
  research for this podcast. Yeah, so it started in 2009, which gosh, just seems like.
• 7:16
  But it's only finished schools years, 10 years ago. Yeah, but it feels like it's only been the last
• 7:20
  couple of years, but it's actually been around for a lot, a lot longer. Yeah. And it was started by
• 7:25
  this guy, it's Japanese guy, Satashi Nakamoto. Nakamoto. I'm going to go this for a single time.
• 7:31
  I think you pronounce that. No, it's apologies. And so he create, he, she, nobody really knows who they
• 7:38
  are. Wow, that's really cool. So there's the kind of this infamous, like nobody really knows,
• 7:44
  there could be more than one person. So they created it and have just disappeared into the
• 7:49
  near-knowing knows who they are or where they came from. I hope one day there's like a documentary
• 7:54
  about it, how it came about. It's kind of like Banksy, you know, and then nobody knew who he was
• 7:59
  and then all of a sudden say, it's me. It's me up here. Yeah. How cool. Yeah, but I think it's,
• 8:05
  it was essentially they launched it, they whoever they are launched it to effectively get around
• 8:12
  decentralized payments and get around using the bank in order to make a payment. So can you just
• 8:18
  explain decentralized organization, what that actually means? It just means not having a central
• 8:22
  authority managing money effectively. So right now, if I transfer you money, it goes through the bank.
• 8:29
  The bank controls it and the interest rates are set by the reserve bank of New Zealand, which is
• 8:35
  even a bigger bank. So it's all facilitated and they control interest rates, which can control
• 8:41
  currencies with Bitcoin and with cryptocurrencies. There's none of that. It's all managed by you and me.
• 8:48
  Is it anti-government or is it pretty much it's like power to the people, you know, we don't want
• 8:52
  to be told or our money to be handled by by the banks we want to manage it. It's like
• 8:58
  independent currency essentially. Yeah. So it's kind of getting rid of authority, I guess. And
• 9:04
  that actually the great thing about cryptocurrencies and digital currencies is that it that allows
• 9:10
  countries that don't have a banking system to actually make transactions and trade with other
• 9:15
  people and have some form of currency. How? What countries don't have banks? Well, like really
• 9:21
  underbanked. Think of places in remote Africa, for example, they're not going to have bank accounts.
• 9:27
  You know, but they have the internet and they can all those, there's a distrust in a lot of
• 9:33
  places with banking systems corrupt Venezuela corrupt banking systems. You don't want to put your
• 9:38
  money with the bank because you might wake up tomorrow and the bank has like said, sorry, that's my
• 9:44
  now. So there's a whole distrust and just removes all that when it's transactions amongst each other,
• 9:49
  there's less reliance on the banks and therefore it's actually a lot more safe. And it's all
• 9:55
  encrypted and coded and we'll get into actually the mechanics behind it. But it's actually you can't
• 10:02
  hack it, you can't replicate it. So there isn't, it's safer in that sense. But then there's no
• 10:08
  regulation around it. So it's unsafe in that sense. So no regulation? What would be the pros and
• 10:14
  cons of that? Well, like drug money. If you turn up with the suitcase with blood all over it and
• 10:18
  was like, hey, can I please bank this $10 million? They're going to be like, okay, we need, we need
• 10:23
  proof of where that came from. Was that inheritance? Did you just sell a house? You know, what? How does
• 10:28
  you use it? No one turns it to a bank with a suitcase of cash. But it turns it to have like drug money
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  or there's gambling money, you know, really, yeah, black market stuff. Dirty money.
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  Dirty money, that's the word. And it all has to be traceable now. So because it goes to the
• 10:44
  banks, it's not weird, it's with bitcoin, it doesn't. Imagine what kind of shit is happening.
• 10:48
  Yeah. So that's behind the scene. The bad thing with bitcoin is that there's these little
• 10:53
  regulation or you don't need to prove where your money came from, kind of thing. I feel like
• 10:59
  all of their cryptocurrency and the digital, I don't know, I just feel like it's just a runway
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  to go though. You've still got 8% of the world's deals of cash. You know, 8% of transactions
• 11:10
  are still cash based. But like I think of my niece who's two and a half. And I was like, she,
• 11:15
  now when she plays money, you know, and you play, she plays shop, she swipes a card and it will
• 11:22
  taps, it paywaves a card. There's no cash. Kind of toys. You're buying this child.
• 11:28
  But there's no cash register, you know? And I'm like, wow, she's never probably going to know
• 11:33
  what cash is because it just won't be used. It'll be, it'll be cards and probably bitcoin or
• 11:39
  cards and other digital currencies. And to think that, like that's quite like, whoa.
• 11:44
  Can we just backtrack to the fact that she has an F-poss machine and she's two and a half? What?
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  No, she uses a calculator as a F-poss machine, but she like taps it and then it gives you groceries
• 11:53
  and it's like, wow, this is crazy, yeah. But because she's just watching what's going on,
• 11:58
  we're not teaching her, but she's watching it, that's how my sister and I pay with stuff.
• 12:03
  Therefore, that's how you transact. And yeah, to think that she's never going to have to
• 12:08
  probably use cash is just such a weird thing. So it's weird to think that 80% of the world is
• 12:14
  still using cash. What parts of the world would that be? Developing countries, I guess.
• 12:18
  Countries where you don't have the payment infrastructure. But I also think there could just be a
• 12:24
  complete leap from those countries, from cash to digital currency or bitcoin, yeah. Rather than
• 12:31
  going through electronic payments. And electronic payments, you mean F-poss. If I said
• 12:36
  it, credit card, all those kind of things, yeah. Do you think they'll go straight to digital currencies
• 12:41
  potentially? Well, if we saw with like China, I don't know, I haven't tried it. So, yeah. So
• 12:46
  with payments, they essentially went from cash straight to wechat. What's wechat? It's like
• 12:50
  their massive thing that they, I'm really not saying. It's like, you're looking at me like,
• 12:56
  you should know what I'm talking about, but you're not excited. I know, I know. Wechat, yeah.
• 13:00
  It sounds like like a message. So sorry, yeah. So China, they didn't go to card. They went straight
• 13:05
  from cash to paying with your phone and paying digitally. So not with bitcoin, but with scanning
• 13:12
  codes and using your phone. So there was no card middle part like we did. So we went cash,
• 13:19
  card, and now we can pay with on our phone kind of thing. Whereas they just went, they just
• 13:22
  skipped that whole step because the technology is changing so quickly. So there's going to be
• 13:27
  countries and like El Salvador, actually, is the first country only a couple months ago that
• 13:34
  made bitcoin. It's the first country to make bitcoin illegal tender, so it will accept it.
• 13:40
  El Salvador. El Salvador. I've been to El Salvador and it is terrifying.
• 13:45
  So that's what I mean. There's countries like that with...
• 13:46
  Oh, actually, can I just take that back? I was scared being there because everyone said
• 13:51
  El Salvador is really dangerous. So I think I had a heightened sense of danger.
• 13:55
  Yes. Nothing actually happened, but I remember feeling like, oh God, I'm going to figure
• 13:59
  for him. Yes. Yeah. That's crazy. So they trade with a normal everyday life with bitcoin.
• 14:04
  Bitcoin. Yeah. Yeah. So you could probably still use cash there as well.
• 14:07
  There doesn't make me feel safe about it, by the way.
• 14:09
  Yeah. Where the country like that is. Yeah.
• 14:11
  But that's what I mean. I've been using it for, I don't know, I'd be like, oh,
• 14:16
  countries that don't have good banking systems like El Salvador. It's much easier to just be like,
• 14:21
  hey, hey, let's just cut that middle part of going with cards and online payments. Let's just go
• 14:26
  straight to digital. And how does it work as they're like, everyone has a bank account and they just
• 14:32
  pay through the bank? I mean, how does it even work? Yeah, I just transfer you money. I'll transfer
• 14:36
  you bitcoin. You'll be like, I'll be like, so if I can buy a coffee and you go, yeah, that's 0.1
• 14:41
  of a bitcoin, which is a body expensive. So does that mean that with each in terms of what
• 14:48
  things cost? Yeah. It'll be changing all the time because of the currency changing its value? Because
• 14:55
  the bitcoin will change in value. Yeah. So does that mean one day you might buy a coffee for
• 15:00
  0.1 bit coin? Yeah. And then the next time I be like, five bit coin, obviously not that large.
• 15:04
  Yeah. Yeah. So bitcoin is currently like $60,000 US dollars for one, but you can buy fractions.
• 15:10
  That is just so wild. So, so in December, it was 37,000. December 2020. Just doubled basically.
• 15:21
  Then in April, it was 85,000. Then in July, it's back to 45,000. Like, this is how volatile it is.
• 15:28
  If you watched it every day, it's like the fairfall at Rember's end. Oh gosh, you would need some
• 15:34
  serious hair dye. It would be nuts. And so that's why it's like, when something's that volatile,
• 15:39
  volatility means risk. So that means when it's that volatile, it's that risky. It's super risky.
• 15:45
  And if it goes, I just find thing where we say, there's like an analogy in the market, it's like when
• 15:51
  you take the steers up and the elevator down when it comes to stock investing and stock the stock
• 15:56
  market in specifically. But the same with this, it's like, you can, you know, things can
• 16:00
  check up very nicely and they can fall straight down. But with this, when it's like going,
• 16:05
  when it's going up and up and down and up and down, it's just like, and the thing is,
• 16:10
  we'll get to this in a bit as well. But it's around like, how do you, how do you know what one
• 16:15
  Bitcoin is worth? How do you know if 45,000 is the right price or if 85,000 is the right price?
• 16:20
  Because it's constantly changing. And there's nothing there's no asset backing, like with a company,
• 16:26
  for example, in the simplest terms, a share price or the valuation of their company is determined
• 16:32
  by your projection of future cash flows that business is going to produce. And they discounted
• 16:36
  back to today. And that is the price that you're willing to pay because you're projecting the
• 16:42
  cash flows that that company might produce over the long term. Whereas Bitcoin, it's just
• 16:46
  all its value is dependent on is people's expectations in the future of what of what that price
• 16:53
  is going to be. This is also something that people have said to me. I feel like I'm just being
• 16:57
  this huge gossip, like reporting all of the things that people have said. But this is kind of what,
• 17:02
  so they said to me that if Elon Musk goes on and says something about Bitcoin, they could crash
• 17:07
  overnight. And then if he comes back saying something positive or finds another coin potentially
• 17:12
  of value, everyone then goes, it's like this big wave of people to sort of follow the crowd.
• 17:17
  It's very news flow driven because it's such, it's such a large mess of company. When he came out
• 17:22
  and said, we're going to accept Bitcoin as payment for car, for our cars, then the price Bitcoin
• 17:27
  shot up because it was more about validation that if Elon and Tesla are accepting Bitcoin,
• 17:33
  then that just means that so many other companies are going to follow suit. And this is actually
• 17:37
  going to become a means of exchange. And we are going to be able to transact much quicker than we
• 17:43
  expected with Bitcoin or with cryptocurrency. So we are going to be able to go to the kayak and
• 17:49
  pay for Tesla with Bitcoin. For investors of Bitcoin to be able to see that gives it so much
• 17:55
  validation that means people are going to demand it a lot more, which we all know if you've got
• 18:01
  increased demand, but limited supply, then that leads to pricing increases.
• 18:04
  Does that mean though that say it does turn into quite a common means of payment that it won't
• 18:10
  be as volatile in the future, it won't have such high gains because everyone will be in it and
• 18:15
  then it will just be kind of normalized? Yes, well that's the expectation. So it's kind of the
• 18:20
  early movies or the first movies get the benefit because more and more people start buying it
• 18:27
  because they need to transact with it. Does that make sense? So it's yeah.
• 18:30
  So essentially rather than because this one is risky because it's been validated by big companies.
• 18:37
  But I think that yes, so it removes some of the risk, but I think also in order for it to become
• 18:43
  a common means of exchange, then it needs to be less volatile. Because otherwise like you said,
• 18:49
  the price of a coffee is going to be changing every five seconds, every five seconds, which is not
• 18:54
  realistic for you. It's fine if it's digital, but like yeah, what a headache. So yeah,
• 18:58
  as an investment with having it being so volatile at the moment, it's just for me personally,
• 19:05
  I prefer to invest in other things. But hey, I could be wrong. I'm totally investing.
• 19:12
  I'm sold. I'm absolutely sold. I feel like I've got the fairly secret that's like, get it now.
• 19:17
  Yeah, and don't get me wrong. I 100% believe that I can't believe you wouldn't just put
• 19:21
  like a few thousand in it. You know, not heaps, not like you're investing your life savings,
• 19:25
  but just a little bit. Well, that's one. That's what I'm not this is advice, but that's when I
• 19:30
  I had a friend come up to her today and she was like, look, I've just sold my business. And I
• 19:36
  I don't know what to do with the money. Like, I've heard of this Bitcoin. Should I invest it
• 19:39
  in Bitcoin? And I was like, oh my god, oh my god, please, no, I just think if you're going to invest
• 19:44
  all of your hard earned money into something, you need to, you need to be bloody across like what it
• 19:50
  really does. You need to be doing it. And even if you were the most clued up person on Bitcoin,
• 19:58
  I think also putting all your money, all your eggs in one basket.
• 20:00
  This silly silly. So yes, yeah, like you said, put a little bit in, you know, have a little
• 20:06
  fun fund, I guess. My my flatmates did the exact same thing. He said things that are really volatile.
• 20:13
  You only put money in there that you genuinely, and this isn't what you say when you say like,
• 20:18
  only invest what you're willing to lose is genuinely would not be skin off your nose if tomorrow
• 20:23
  it's gone. Yeah. Because it is so volatile that like any of these and blah, blah, blah, blah,
• 20:28
  that you just don't know what's going to happen. And actually, if you were, if you only have $10,000
• 20:32
  of savings and you go and put $8,000 in Bitcoin, it's just dumb. And don't look sorry. I shouldn't say
• 20:37
  it's dumb. That's not advice, but that was what he was saying to me. Yeah, I agree. It's almost like
• 20:41
  if you had, yeah, you put one percent of your portfolio in that. And thousand ninety-nine percent,
• 20:47
  you put in things that are much more reflective of your risk profile or getting you to achieve
• 20:52
  your financial goals. Because yeah, I think if you put your entire life savings into Bitcoin,
• 20:58
  that is very, very risky approach. And you need to, you need to be comfortable, we are
• 21:02
  waking up tomorrow and it's gone to zero. A question I did have was, so say you invested $5,000
• 21:09
  in Bitcoin. And as you were saying in March, you went up to $80,000. If you took your money out at
• 21:14
  that point and you, you got your gains from that. Yeah. And then it went down and you were like,
• 21:20
  brilliant, I'll buy it again. Yeah. Is that a good way to do it? Or is it? Because I know it's
• 21:25
  like, it's different in terms of compound interest that you leave it in there and you keep it in there
• 21:29
  because. Well, that's the same with, is it the same thing? Yeah, I mean, it's an investment. So you,
• 21:32
  you're, your returns will compound over time if the price keeps going up. The thing is that you
• 21:38
  see it, and it goes to 85 and you sell it, that's the hard part. All these people have on paper
• 21:46
  returns from Bitcoin, but you need to find someone that's willing to buy that at that high price.
• 21:52
  And that's kind of the difficult thing with Bitcoin. You can't just go to an ATM and go,
• 21:56
  cool, sweet, get a cash that out. No, I've got my 85,000. But isn't it the same as just buying a
• 22:02
  share? No, because because you're transacting with each other. So you can't just cash it out.
• 22:08
  Do you know what I mean? And turn it into cash. So that's the difficult thing. Oh, you have to
• 22:12
  explain it. I don't get that at all. Yeah. So let's go through like actual each part of
• 22:16
  because there's, there's a lot behind a lot of jargon when it comes to cryptocurrency and a lot of
• 22:22
  terminology. And I think it's really good before, I mean, we've got another, we've got three episodes
• 22:28
  on this too. Dive in day. More if we need to. And so I think this would be really good to just go
• 22:35
  through, yeah, what is an actual Bitcoin? What is Ethereum? What is, yeah. So if we start with
• 22:41
  an actual cryptocurrency, so the good thing, so that's just this means just that it's a type of
• 22:46
  currency that's digital and it's decentralized. So we talked about decentralized being, it's not
• 22:51
  controlled by the banks. It can be used to buy and sell things. So like with the Tesla example,
• 22:56
  and it can be a long-term store of value. So like you were saying, you can hold it, you can buy it
• 23:01
  and you can just hold it and it can compound over time if the price goes up. Like cash effectively,
• 23:07
  it's kept cash just doesn't appreciate value as much because you're only getting 1% in the bank.
• 23:13
  It's an alternative form of payment. So if you think about you can pay for things in US dollars,
• 23:19
  you can pay for things in pounds, you can pay for things in New Zealand dollars, you can pay for
• 23:25
  things with Bitcoin. So it's an alternative form of payment, but it's created using encryption
• 23:30
  algorithms. So it just means that it's a digital currency. It's not controlled by the banks.
• 23:41
  Yeah, like what's called kind of? Yeah, so it's effectively a code. But I think the appeal is
• 23:47
  that like we're saying with Venezuela or even like our Salvador with this financial instability
• 23:52
  between the banks, you've got hyperinflation, you've got banks closing and not letting you,
• 23:57
  like there's so many things that team financial instability in banks. And so this just removes
• 24:02
  all of that and that's why it has been so attractive and really grown in popularity.
• 24:08
  Well, there's a huge shift towards just power to the people in everything now.
• 24:12
  Totally. Even in stocks when we saw there was an example that you asked me about a while ago,
• 24:17
  and you're like, I see all this stuff about this game stop and like all this stuff in the news,
• 24:23
  and it was about the stock that the hedge funds. So if you think like fun managers,
• 24:29
  we don't have a lot of hedge funds in New Zealand, but fun managers were short. So that means they
• 24:35
  benefit when the price falls. And a whole lot of mum and dad investors, or young investors like
• 24:42
  us, young investors. So young include up youthful investors. They were on Reddit and they were like,
• 24:50
  hey, look, all the hedge funds are really short. This company game stop lets buy the shit out of it
• 24:57
  and increase the price and then the hedge funds will blow up. And they'll lose so much money
• 25:02
  that they won't be able to operate. And it was mind blowing. The sheer price reaction
• 25:08
  and everyone jumped on the bandwagon and it was like, there's power to the people. Let's fuck
• 25:12
  with the hedge funds. And yeah, all these hedge funds blew up because they had these massive
• 25:17
  short positions in this company game stop. And then it was like, oh gosh, which company are they
• 25:21
  going to do next? And so all these hedge funds were like, I don't want to be short companies that
• 25:27
  these Reddit investors are going to jump on. And it was quite amazing. This whole power to the
• 25:32
  people and how you could manipulate the stock market like that. So did it mean that those hedge
• 25:38
  funds had to buy it back because they had to get it back? And am I right in thinking, because I
• 25:44
  buy it back at a higher price? I remember you trying to explain this to me at the time. And it was
• 25:48
  the idea that they essentially sell them so they're short at knowing that they have to buy it back
• 25:54
  because of the people that they are representing. But yeah, so they they short at a certain price.
• 26:01
  And can you explain short again for the effectively got a negative holding?
• 26:06
  Right. So they do have to buy it back regardless of price. So they have to buy it back.
• 26:11
  But they think it's going to go down. That's why you're you're only short a stock or you're only
• 26:15
  you're only have a negative position if you think it's going to go down because then you buy it back.
• 26:21
  So say you you shorted it a dollar. You buy it back at 50 cents. You've made you've made that 50
• 26:26
  percent. Yeah. So if it go if you buy it if you sorry if you shorted it a dollar and it goes
• 26:31
  up to to two dollars, you've you have to buy it back at two dollars and you just you've made such a
• 26:37
  loss. So this is the dangerous thing with shorting is that if you buy something you've only got
• 26:43
  100% downside. So you can only lose 100%. So if you buy something for a dollar like normal like
• 26:51
  a normal share and that company shits itself and goes it your return is maxed out at negative
• 27:00
  100%. So you can only lose 100%. Whereas on the short side. Is it negative 200? It's infinity.
• 27:08
  Because if the sheer price just keeps going up and up and up and up and up and up. That one dollar
• 27:12
  could go to ten dollars it could go a hundred dollars. So you could be going minus 500 percent or
• 27:16
  something. You could be minus it's infinity. Yeah. So there's yeah. So they I mean they're pretty
• 27:22
  they could go bust really. Yeah that's what I mean. So they that was why it was like this power to
• 27:26
  the people. Let's let's screw with the hedge funds and yeah a lot of them did go bust and then I
• 27:32
  remember remember that day and we were like oh gosh you know could they do a New Zealand or
• 27:36
  Australian company next and did you guys freak out? Yeah well it's we weren't shortening things
• 27:41
  we can't do that at work but it was more a lot of people scrambling around going oh gosh what
• 27:47
  what could be next what company could be next and thankfully there was there was there wasn't any
• 27:52
  massive flow on a fix of it but it was quite an eye opening thing that we're in such a technical
• 27:58
  such a digital age now and with social media information just like I would like the free
• 28:02
  Brittany. Yeah I mean I saw it quite the other day and I was like where should get the free
• 28:07
  Brittany people on climate change then the only ones that can get anything done.
• 28:10
  It's so true and I thought this is just so accurate but you can get shit done if you put
• 28:16
  your mind to it because information can be disseminated disseminated. Is that a word disseminated?
• 28:22
  disseminated. Distributed? It doesn't sound right but it is disseminated.
• 28:27
  Gosh I'm bad with my gosh disseminated. Can be disseminated.
• 28:31
  disseminated. Oh yeah yeah. No it's spread through your organ or body but I'm sure
• 28:35
  it means the same thing. It can be. It's widely disseminated.
• 28:39
  It's widely disseminated. Localised disease to severe.
• 28:42
  Look it's probably not quite the right way.
• 28:44
  Things can be spread rapidly through social media because someone picks up something and
• 28:48
  they're just like spreads like wildfire which can be a good thing and a bad thing but it just
• 28:52
  shows when people get on a bandwagon how quickly things can change.
• 28:57
  But that's basically when it comes to bitcoin though that's why it can be so volatile
• 29:03
  is because the people have so much control rather than governments or regulations.
• 29:07
  That's why when Elon Musk goes you can now accept you can now pay for Tesla with bitcoin and
• 29:12
  that's why the price goes up because people say they're like oh my gosh and then when he comes
• 29:16
  out we while later and goes actually just joking and the price falls again and then he's like
• 29:22
  oh no you actually can now. He's like look at me I can move. He's the kind you
• 29:32
  so bitcoin so let's kind of define what bitcoin actually is. So this is just the most
• 29:37
  popular digital currency. It's the one that's been around the longest. It's the one that most
• 29:41
  people talk about and it was launched about 10 years ago by that enigma.
• 29:46
  So bitcoin it's peer-to-peer, peer-to-peer transactions but they're really secure.
• 29:51
  So they're really they're really. And this comes down to the heaps of passwords
• 29:55
  that you can't use and you can't use an algorithm. So I guess unlike other payments like
• 30:03
  PayPal for example or even just payments like banking, banking from me seem to you
• 30:10
  you know online payment. They rely on traditional banking systems whereas bitcoin
• 30:14
  is decentralized like I said. But so what does this actually mean? It means that two people
• 30:19
  anywhere located anywhere in the world. So I could transact with my good old friend and
• 30:25
  ourselves or that I don't have. Well I was like I literally for a second was trying to think
• 30:30
  is that good for a no-self at all but I don't know that. But I couldn't like I mentioned
• 30:34
  me being like hey he wants a bank account number and transferring to a bank and I thought like
• 30:37
  it probably it would take forever you pay fees you know it probably wouldn't even arrive probably
• 30:44
  get a digit wrong. You have to fill in like 15 pages of forms. Yeah so it's just it's a great
• 30:50
  way to transact in that in that way and the fact that you can transact with anyone around the world.
• 30:54
  And it also just means that each transaction is actually logs on blockchain. It's like a digital
• 31:01
  ledger so you know how we've started using zero for the curve accounts. Sorry you've started using zero
• 31:07
  for the curly hounds. I'm just like that's a big job. That's a big job. That's a big job.
• 31:15
  Well yeah so we have started using the curve.
• 31:19
  Fix mom came around to try and teach y'all how to use it and I was severely hung over and she
• 31:24
  arrived in the last 10 minutes. I'm like right. I'm here to help guys. I'm here to help but I was
• 31:29
  like oh no no we were we were reconciling. This is transactions.
• 31:36
  And me and my mom were like right okay well maybe that's a ribbon you oh but maybe it should
• 31:40
  go somewhere else. And then stop.
• 31:44
  She was like crumbs on the computer. I wasn't really thinking. She was like reach over and
• 31:58
  swept the crumbs off the computer. She just allocated it to me with you.
• 32:03
  And we were like okay. Me and my mom were like oh god we did it again.
• 32:07
  And she softes had no idea which she's like sorry I was just wiping the crumbs.
• 32:12
  I feel like maybe it was ahead to be there but it was so funny.
• 32:16
  It was hilarious yeah anyway. I love when I cry when I laugh. I'm just like that's a real good cry.
• 32:25
  Yes so sorry I was saying that each transaction is logged on a blockchain which is like a
• 32:31
  ledger of transactions and it's distributed across the entire network of cryptocurrency users.
• 32:36
  So that's why you can't hack it or change it or yeah that's kind of the source of its
• 32:44
  validation is because that piece of blockchain is distributed amongst all other cryptocurrency users.
• 32:51
  So is that kind of like a bank statement that everyone sees? I don't really understand.
• 32:56
  It's more that there's a record of it so you can't change it or alter it or
• 33:01
  and is this the code of what Bitcoin is? It's not the people's transactions.
• 33:05
  No no no it's the blockchain that makes up what a Bitcoin is.
• 33:11
  So it's all individualized. So this blockchain that's then distributed to everyone.
• 33:17
  It makes it transparent. It's kind of I guess like instead of sending it to the bank
• 33:22
  and the bank controlling it you're giving it to everyone instead of keeping it to yourself as well.
• 33:29
  And you might be able to alter it or change it or hack it. It's distributed to everyone
• 33:33
  as a source of security I guess. So everyone has a copy. It can't be it can't be changed,
• 33:39
  it can't be hacked. And is this with every single coin?
• 33:43
  Yeah this is just Bitcoin. So no one actually controls the Bitcoin network. It's apart from
• 33:48
  the other users of Bitcoin. If you sell me some Bitcoin I buy a Bitcoin. That transaction is
• 33:54
  recorded and distributed. It makes everybody. So everyone has a record of that and now knows
• 33:59
  that I own your Bitcoin. You don't anymore. Instead of it going to a third party like a bank or
• 34:04
  company or anything it's just everyone is helping each other out by holding each other accountable
• 34:10
  if that makes sense. So as much as it's volatile it's also very honest and transparent.
• 34:15
  And that respect. Yeah. Yeah. So I guess you would need that because if there's no governing
• 34:20
  body or I mean it wouldn't work otherwise because there are people that are a bit shy.
• 34:25
  And even if there was one person. So say Satoshi whoever they are was managing it.
• 34:30
  They'd still be a level of skepticism because you'd be like well I don't know who that is.
• 34:35
  I don't know where they're from. I don't trust them with my money or do you know what I mean?
• 34:41
  Where is it? It's like a collective responsibility essentially.
• 34:44
  Yeah. So if everyone that owns it manages it then it's kind of a shared responsibility,
• 34:52
  a shared trust, a shared authority. Does that kind of make sense?
• 34:56
  Yeah. And it makes me want to be a part of it even more because it feels like you're in this club
• 35:01
  and everyone's in the crypto class. I think I'm sold. I just want to I mean I know we haven't even
• 35:06
  got like a quarter of the way through the information that you can tell me about it but I just want
• 35:09
  to dabble. I just want to put a little bit in there. I'm not going to be doing my life savings.
• 35:13
  I just want to see it move up and down and start to understand it more.
• 35:16
  Yeah, maybe we should as well. Should we do a curve account?
• 35:19
  Yeah. And we'll both put in the same amount and we could just like watch it together and look
• 35:23
  that's actually a fun idea. Let's do that. And maybe then if we do make money we can like go
• 35:28
  and treat ourselves. It can be. It can report back in a couple of episodes and be real gutted
• 35:31
  over that. Let's do this. This is a great, this is actually a really good idea. A lot of
• 35:35
  homework. Yeah, yeah. Well we can we can be like user VIXO 44 or something.
• 35:41
  Yeah, a lot more encrypted than that. Oh, are they? Yeah, it's not like any missing name.
• 35:44
  No, it's not like a your first one. It's like one, two, three, seven, eight, nine,
• 35:48
  capital. It's not like Sophie who are at 69 at hotmail.com. Excuse me. My account was
• 35:54
  Gymshik 22. Gymshik. It was when I did. It wasn't when I did.
• 36:02
  Mine was hot Sophie. Excuse me. It was gym because I did gymnastics. It wasn't like I'm pumping
• 36:07
  tins at the gyms. And 22 is my birthday. Mine was Vicki Dickie. Was it? Yeah, it's because it
• 36:14
  arrived. Vicki Dickie. And you're giving me a shirt. Vicki Dickie. I know. That is classic.
• 36:26
  Really original rhyming from my friends. It's more just the fact that you're Dickie in your eye.
• 36:30
  I know. And then I started for like applying for like internships and drawing as I just
• 36:35
  changed email. I feel like we've talked. We might need to cut this episode and come back for
• 36:41
  episodes. I haven't even gone through like half of this episode. I think it's fine if we haven't
• 36:46
  got through all of this because we can just keep recording until we've got through to actually
• 36:51
  talk about yeah, blockchain and Ethereum, which is kind of similar to Bitcoin. And the whole
• 36:58
  process of actually mining and turning cash into Bitcoin. Yeah, that's why I don't understand
• 37:03
  when you've got the Bitcoin, how do you then get the money? Yeah, yeah, yeah. So there's like
• 37:08
  there's exchanges around. So like a stock exchange where you buy, you go to the ASX or the NZX.
• 37:15
  There's an exchange for crypto exchanges where you load money into a digital wallet and then you buy
• 37:20
  you buy Bitcoin or yeah. Wow. Yeah. Because I saw someone put on this story the other day and they
• 37:26
  were like brilliant. And it was a photo of what looked to me like a, it looked like a vape. But it
• 37:32
  wasn't a vape. That was a digital because I googled quickly. I was like, oh, that's so weird
• 37:36
  that she's posting about her vape that she just bought like what a strange thing to put on an
• 37:40
  Instagram. And I googled it and it was a digital wallet. Wow. Yeah. And it was a really long,
• 37:45
  skinny black pen drive looking thing. Okay. So we're going to come back with, so the next
• 37:50
  episode is going to be around crypto as well. We've got lots to get through. We've also got heaps
• 37:54
  of questions from people. A lot of the stuff that we've been getting through our socials and
• 37:58
  I'm sorry. I know. Maybe we should just do a bunch of Q and A. It's actually quite a good idea
• 38:03
  because there's so many. And we also keep talking and talking and talking and forgetting about the
• 38:07
  Q and A's at the end of every episode. But like next time, we're halfway through the season.
• 38:12
  So what you guys want to hear. And in the meantime, Vic and I are going to set up a dual account.
• 38:17
  And we'll report back with what happens overnight. Thank you so much for joining us. But today's
• 38:23
  episode of Raising the Curve. Please subscribe and leave a review on whatever platform you're listening
• 38:28
  on. And we would also love for you to share this podcast with anyone you think would benefit from it.
• 38:33
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• 38:38
  us on socials at the underscore curve NZ.
• 38:45
  Hey, Vic, I want to bribe our audience. Oh, and I know that it's maybe questionable behaviour.
• 38:52
  Do it. The amount of people that follow and subscribe this podcast is so low,
• 38:57
  comparatively, to the amount of people who listen every week. Hello, it's 2%. So if you look at
• 39:02
  our follows, even on like Spotify, it's like 500 people follow, but then there's like thousands
• 39:08
  and thousands and thousands that listen every week. And I was like, holy shit. Excuse me.
• 39:15
  But I don't think people realize how much it helps by hitting the follow button or the
• 39:19
  subscribe button. And we didn't know it all recently either. So if you listen to this podcast
• 39:23
  regularly and you like the conversations we're having, we would love to ask you the tiniest favour.
• 39:29
  Please, please, please click follow or subscribe. Gosh, that sounds very desperate, but we are
• 39:35
  desperate. We would love it. And it only takes two seconds and it helps so much. So please,
• 39:42
  and you also won't miss out on any episodes of our lovely voices, which, heaven forbid,
• 39:49
  you might miss out on an episode and not get the content. Oh, gosh. Do you know what I've just
• 39:54
  realised though? I said at the beginning of this that we'd bribe them. What are we bribing them with?
• 39:58
  Click follow or subscribe and you'll find out. I know what it is. If you hit and follow
• 40:02
  subscribe, whatever it's called. Oh, gosh. What are you giving away? No, no. I was just going to
• 40:07
  mean because it means our show can get better and we can spend more money in the production and
• 40:10
  we can get better guests and like it just makes such a difference. So if you like the show,
• 40:15
  it takes two seconds to follow, but then what that does in terms of how we can then grow the podcast
• 40:21
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