(upbeat music) - Bitcoin, NFTs and digital dog tokens, passing feds?

Not likely.

Are we entering the next big technological era since the dawn of the internet?

Perhaps.

For us to understand where we are headed, we first need to understand how Bitcoin has paved the way.

And with us today is Greg Genega, a certified cryptocurrency and blockchain expert as recognized by the Blockchain Council and who has 15 years of experience in information technology operations.

I for one excited to learn more about this currency and how it may significantly impact the way we transact business in the future.

Thank you, Greg, for joining us today.

- Thanks for having me.

It's nice to see you again, Stephanie.

- It's nice to see you.

So can you tell me a little bit about yourself and your background?

- Sure.

Yeah.

So, yeah, as you mentioned, I've worked in IT for 15 years, but I've always had a real big interest in finance.

So for the past 10 years or so, I've done a lot of research read books by Peter Lynch, Benjamin Graham, et cetera.

And I learned a whole lot about the concepts of investing and crypto kind of entered my mind maybe about five years ago and I started dabbling in it as this great melding between finance and investing in technology.

And it's rapidly innovating right now, and I just think it's so interesting.

- It is interesting.

And it's also really confusing.

- Yes, it is.

- So we are gonna baby-step this process to understanding Bitcoin and cryptocurrency.

So let's talk about cryptocurrency, in its simplest terms, what is it?

-Right.

So, yeah, it is challenging to explain.

So in my eyes, when you think about cryptocurrency, there's really almost two buckets of it, right?

There's Bitcoin, which arguably we could paint the closest tie to what we would deem a store of value or money or an actual currency, right?

And there's at least 10,000 other types of coins and tokens in the cryptocurrency space that just have different underlying fundamentals.

So it's important to understand Bitcoin because that's really where it all started, started roughly 13 years ago.

And it has grown massively.

So when we think about what it is, it's a digital currency, right?

That you can send and receive and store.

It is secured by a decentralized network of computers and it is all secured with cryptography, right?

Which is basically almost the same type of cryptography that you'd use to make sure like your bank account login would be, but very, very secure.

And there's no intermediary systems, right?

These things called Bitcoin miners that are spread all over the world are doing the work to keep it secure.

And so there's no middle, intermediary systems like banks, for example, you'd normally send, say dollars to somebody, you know, across the ocean, you know, you have to go through our bank system, the swift system, et cetera.

- Right?

- Bitcoin, it is literally like you have their address, you sign the transaction with the private key and then off it goes and in seconds or minutes and no reliance on any people whatsoever.

- Okay.

So back in the day, like the history of money, money was backed by gold and that's what gave it value.

Now the past, what?

13 or more?

Well, longer than that, for the past, I don't know decades, - 50 years or something.

- Yeah, five decades.

It has not been backed by gold, but it still has value.

What gives Bitcoin value?

- Yeah.

I'm glad you brought that up because I think it's important to draw the lines between Bitcoin and gold.

So when we think of gold, a lot of times we call it sound money, right?

So what makes gold sound money?

And then we can draw the comparisons to Bitcoin and the concept of sound money that actually came from gold because back in the day, how they would verify is they'd almost bounce gold coins off a table and they could discern what it was by the sound and that made it, you know, that it was real money.

It was real currency.

- That's really cool.

- Yeah.

So when we think about, you know, stores of value, money and gold, you know, the purposes of it is to again, be that store value and a medium of exchange, right?

And so we think about all the different technologies and attributes that, you know, gold money and currency could have, et cetera.

It comes down to a few different things, right?

So for one, it has to be divisible, right?

So think about dollar divided into cents, gold you can chop it up into little pieces, Bitcoin, very divisible there's only ever gonna be 21 million Bitcoins.

And those can be divided into many different pieces, right?

One Bitcoin could be divided into 100 million sub units basically.

So it's very, very divisible.

It also has to be durable, right?

So when we think, again, we think about gold, you know, it could sit there for thousands of years and retain its properties, same thing with Bitcoin, right?

The decentralized network is advanced.

You know, it can't be shut down without shutting down the whole internet.

So it is also durable in that way.

Also has to be portable.

Now gold struggles a little bit with this because it's heavy, right?

And, you know, you can only really kind of transact with it in person, right?

Whereas Bitcoin as mentioned, extremely portable, all you need is an internet connection to send and receive it, and also to be verifiable.

And one of the interesting things about Bitcoin is it's based on a public ledger using a blockchain where every single transaction, every single Bitcoin transaction that's ever been done, you can audit it.

You can see it, it is built in a ledger, right?

So it's very, very verifiable.

And when you think about things like, like gold, you know, there are assets of gold that you can, you know, distinguish on what it is.

One of the most important things about an attribute of gold and store of value is its scarcity.

And this is really, really what made gave gold all its value and what really gives Bitcoin all its value.

So when we think about gold it's scarce because it has to be dug out of the earth basically.

And there is a limit amount of gold in the planet.

And similar to that, Bitcoin is very interesting because it is very hard coded in software that there will never be more than 21 million Bitcoin.

And the new Bitcoin that enters, that is created.

It is actually disinflationary where every four years it's cut in half, how much new Bitcoin enters the system.

So it is very predictable, very disinflationary.

And we think about all those things combined, you know, Bitcoin really does stand out as a huge competitor as a store of value.

Now, of course, gold has been around for thousands of years, Bitcoin only 13 years, so there's some work to do.

And when you think about how gold also is valued, right?

You think about the market cap of gold, which I think is between 10 and $12 trillion.

Certain piece of that has to deal with the actual uses of gold where, you know, gold is used actually computers and electronics, of course, it's also used as jewelry, but I think more than half of what the value of gold is is because of that store of value.

And so Bitcoin very much has that store of value aspect to it.

- Who came up with the 21?

What is it, 21 million?

- 21 Million, yeah.

- Bitcoin.

- So there's an anonymous individual or group of individuals entitled Satoshi Nakamoto who basically created this very, very simple white paper, very, very short actually.

And they basically try to make, you know, this ultimate peer to peer electronic cash system and that was right in the 2008 financial crisis actually, right?

- Oh, wow.

- It was right in like January of 2009 when things were like almost near its bottom and it was brought to be like, this could be the solution to the financial system due to this crash that we had and it took off from there.

- That is really cool.

- Yeah.

- And this short, white paper has really changed everything.

- Oh, absolutely.

Yeah.

- Let's see.

Can you spend Bitcoin?

- Yeah, absolutely.

- I mean, it's not valuable if you can't like just spend it.

- True, exactly.

You know, these days it is a little more challenging to spend.

It's very easy to send and receive it, it's very easy to hold it.

It's very easy to hold it on a centralized exchange.

It's easy to convert between, say something like US dollars and Bitcoin, but we're still kind of early in terms of actually spending Bitcoin as legal tender.

The closest that's happening with that right now is actually in El Salvador, which you may have heard of, I think around September of last year as being accepted as legal tender first country in the world to accept Bitcoin as legal tender.

- I think they have machines for it too.

- Oh, yeah, absolutely.

They have machines, they have phone applications and such like basically wallets on smartphones.

- Just like a bank though.

Like you go in and you put a card in and you transact with Bitcoin.

- Right.

So if you were to go buy, you know, a coffee or something like at a store in El Salvador, you have the option of spending US dollars or you have the option of actually spending Bitcoin.

So you'd pull out your phone and there's an application on there that can hold it and spend it in store and such.

Yeah.

- Wow.

So if that comes here, I mean, it really could change the way we do business.

- It very well could.

Yeah.

- Wow.

Very cool.

So Bitcoin has gotten a bad rap.

I mean, let's think about it, mainly because it's linked to criminals, you know, you get held hostage, your computer gets, you know, frozen and they say you can't get your information back unless you give me X amount of Bitcoin.

Sure.

So should we be worried about that?

- Right.

It's a great question.

So there's this from call Chainalysis, right?

And they're probably one of the most advanced analytics of Bitcoin and blockchain technologies.

And they look at everything on chain, again, open public ledger.

You can see every transaction that's happened in Bitcoin and they came out with a statistic last year, that elicit activity in the Bitcoin network only accounted for about roughly 1/3 of 1% of the entire activity of Bitcoin, for example.

And when you think about FIA systems and cash, that that percentage is definitely a much higher, you know, a bigger reason why, you know, it's that much of a convenient system of money, right?

So it's easy to do that.

But the thing is, is that a lot of criminal activities are actually shying away from it now because the transactions are so traceable.

Right?

So last year there was this colonial pipeline attack, right?

- [Stephanie] Huge.

- Yeah, massive.

And they requested ransom in the form of Bitcoin.

Well, the US government was actually able to get quite a millions of dollars retrieve from that, because of how traceable those transactions were and there has been regulations and good regulations I might add in the United States, in many countries around the world because there are concerns with the anonymity of sending it.

But if you make it so the gate to buy it, you basically have to provide your information.

It helps a lot, right?

So there are these things in the US called KYC/AML laws, which stands for know your customer anti-money laundering.

And so you really can't legally buy Bitcoin and crypto too easily in the United States, in many countries in the world without basically giving your information so that they know who you are, right?

So that you can't evade taxes, and if you're using it for nefarious purposes, that it could be drawn back to you.

- [Stephanie] And I know you're not a certified financial planner.

- No, definitely not.

- But is there a way if you use this Bitcoin to show it on your taxes?

- Oh, absolutely.

Right, so crypto it actually applies most of the same laws for stocks right now, apply to crypto, right?

So there's short term capital gains, long-term capital gains.

If you hold a Bitcoin for a year or more, you know, that's long-term capital gains, a year or less short-term capital gains.

And the percentages as of this moment anyway are equal to that of stocks.

- Wow.

So I've read something else.

Of course, everybody's reading all this stuff about crypto.

So everybody's given like a number, like when you buy and sell, you have this number, right?

- Like a public wallet address kind of, yeah.

- Correct.

And that's you, that's what you own and all that?

- [Greg] Exactly.

- So if you lose that number, gone, all your money, all your Bitcoins gone, I read that some guy died without having his number written down or memorialized anywhere.

And how many millions, did you read this?

You know this?

- Yes, I did.

I unfortunately don't remember the name, but yet somebody, somebody drowned and they had like a, I dunno, like, like tens of thousands of Bitcoin or something like that, which are worth many, many millions of dollars.

Yeah.

So there's a couple things, right?

So with Bitcoin and almost pretty much every crypto, you have like your public facing wallet ID that you can give to other people, right?

If you're gonna take self custody of your crypto, you have this public wallet ID that's safe to share.

What's not safe to share is the private key that you use to sign transactions basically.

And that private key is generally, it's an extremely long, you know, see what the numbers or these days, it could be 12 to 24 completely separate words.

That's almost like your password, right?

But, you know, one of the beauties of Bitcoin and crypto is it's completely decentralized.

There's no central authority.

There is no CEO of Bitcoin for you to say, hey, I lost my password.

Can you reset it?

That doesn't exist, right?

And this only occurs again, if you take self custody of your Bitcoin and crypto, which some people prefer to do that, right?

It definitely has its advantages because it is yours.

It is like if you were to hold gold in your safe, or hold Bitcoin on your private key, you know, it is in your possession, nobody could take it from you, right?

But I think a lot more people, right?

For a lot more.

I mean, less savvy people, retail, investors, and such are interested in it.

They're generally gonna keep their crypto on centralized exchanges and if they do that, those do have a lot of security measures and two-factor authentication.

You don't have to worry about managing your own private key.

They manage that for you basically.

So that is more of the standard passwords that you can get a reset if you lose it and such.

- Okay.

So if you self hold this you should write down the key and put it in your safe deposit box?

- Keep it extremely safe.

Don't share with anybody.

Exactly.

- But keep it somewhere, so that somebody could find it.

Right?

That's the thing to remember.

- Yeah.

- Okay.

So I'd like to remind our viewers and those who may have joined late, that we are here with Greg Genega, a certified cryptocurrency and blockchain expert, and we are talking about cryptocurrency and Bitcoin, and we've been talking a lot about Bitcoin.

- [Greg] Right.

- Tell me about all the other types of cryptocurrency.

- Yeah.

So there's a lot of real exciting developments in this space, right?

So when we think about what's different about a lot of these other digital assets, you know, cryptocurrency is a name that eventually might go by the wayside, right?

Digital assets is kind of one of the new terms for crypto, right?

And when we think about that, it comes down to just a little more advanced things that they can do, right?

Bitcoin is beautiful in that it is very, very pure in its use.

And, you know, you could build things on top of it like software and such to maybe make it easier to transact with.

But generally the code that governs Bitcoin, it, you know, is really seen as pristine and should not really change for, unless there's like, you know, really major issues.

Now, there's all these other crypto assets that are much different.

And probably the second most popular one to Bitcoin would be one called Ethereum.

And what Ethereum has done is it comes with this very, very unique element to them called smart contracts.

And those are basically almost make it so that you can actually program code to interact with these digital assets in different ways.

And it offers a huge array of use cases to interact with these crypto assets.

One of the most popular ways of interacting with all these crypto assets these days is in this realm of something called decentralized finance.

And what this is, is there are these smart contract applications that let you use your crypto assets, like Ethereum, for example, and you can do lending with it and borrowing.

And there are derivatives markets and exchanges, right?

All these things you see in the normal financial sector, but they are in this like very, very decentralized area where, you know, you have this decentralized network of computers securing it and stuff, and those contracts are embedded into that network and anybody can go interact with them.

Right?

So when you think of a borrowing and lending agreement, you have with your bank, you know, there's collateral, there is an interest rate and such, and these things are based on software code and it removes so many more of those intermediaries and some of those percentages, for example, for lending and borrowing might wind up being attractive based on the supply and demand for that.

So that is a huge booming area for it, right?

So, you know, so Ether is a good example of that, but there are a lot of other smart contract platforms, if you will, they're an entirely different blockchains.

A lot of them are vastly growing because of Etheriums popularity where, you know, you have other options to go to and they have, you know, other twists on it that they might add and developers might go and create a new and unique applications.

Decentralized finance is a really big one, but probably one of the more interesting things in this area is there's this concept of web three right now.

Right.

And I think, we're still in the middle of defining what exactly that means, right?

So very popular kind of definition of that is when we think of web1 that was like back in the day, Internet's first around yet aol.com.

Yeah.

Your first splash page, you know, you could only consume the information.

Everything was just made and sent to you.

- It went through a telephone line.

- It went through a telephone line and a dial up.

Exactly, right?

So AOL, when you consumed information, it was basically, you couldn't edit it in or anything.

It was just brought to your, right?

Web2 started happening in the 90s, when social media, started becoming a big thing where and blogging, right?

Where you could put information out to the internet and start out on the internet, you could share it and such.

And, you know, there were a lot of companies that facilitated this, like Google, YouTube, Facebook, right?

Amazon, et cetera.

So all these companies facilitated that and those companies made a lot of money off this technology.

Web3, the concept of it right now is where not only are you producing this content, but you own this content, right?

You actually own a pieces of the software infrastructure that are providing these services and it's a whole new way to think about things.

One of the most popular examples recently is this one called the Ethereum Name Service.

It was created by a bunch of developers, you know, it didn't cost them a whole lot to get set up.

And they basically, what they did is all the people who are using that service, they made like this governance token that they gave to everybody for free and it wound up being worth.

I mean, many people made tens of thousands of dollars.

It was almost like free tokens, free shares of this service.

Right?

So, you know, they put in a little bit of money to use a service just for them using it, being a part of it, helping it, you know, they basically got shares in that, you know, company, if you will.

And not really company right, there's referring to these things a lot as DAOs or decentralized autonomous organizations.

There's a whole other thing that there's going to be a lot developments about in the next few years.

- Mind is blown.

I mean, there's a lot here.

Are there a lot of people like you out there learning about this and can talk about it and explain it to people?

- Yeah, absolutely.

So when we think about the way that crypto and digital assets, the technology adoption rate where it's at right now, it is almost equivalent to how the internet was growing in the 1990s, right?

So if you think about where the internet was in like 1995 and where it is now, it has come a very, very long way.

And the crypto right now is kind of tracking to like that mid 90s internet mode of adoption, right?

So there's still way, way, way, way more people that can get involved and interact with it if they wish so.

People are worried because they've seen the price of, you know, Bitcoin go from pennies to tens of thousands of dollars over 13 years, like, am I too late?

- Right.

[Stephanie] : So they want some.

But, you know, potentially, it's not too late.

It could be still early.

- Okay.

So I've heard about Bitcoin mining and that it takes a ton of energy, I mean, you hear about buildings full of computers, just churning out 24/7 all this energy, it gets hot.

It's just an energy sucker.

Is this harmful to the environment?

- Right?

That's another amazing question.

And definitely something we should address.

So there's a lot of estimates out there by how much, you know, total energy usage in the world that is Bitcoin mining.

And it's about half a percent of the world's energy usage, which, you know, is a decent amount.

And in terms of the impacts on climate change, right?

We think about, what are the types of energy that are currently mining Bitcoin?

And a lot of it is very much renewable based right now.

And there are a lot of advantages that Bitcoin mining can actually have to stabilize an electric grid and increase adoption of renewable technologies.

So for one, if we think about creating a technology to make energy cheaper and cleaner, right?

There's, of course, you know, the notion that climate change is a thing, and we need to address it or it's quite frankly, going to be the end of the world, right?

So there's a lot of incentive there to figure that out.

But you create a lot more incentive to increase that technology, how fast that technology comes out when there's basically money to be made around it too.

And Bitcoin mining is one of those things.

There are a lot of Bitcoin mining companies that are very much interested in cheap, renewable energy.

And because of those investments in the infrastructure, because of their companies, it is very likely going to increase the technology adoption and et cetera of, you know, cleaner energy, and cheaper, cleaner energy, more than that.

And there's actually a lot of grid stabilizing measures that it could have as well.

Sweden actually recently tried to ban Bitcoin mining because of the environmental fears, but one of the power companies there said, wait, don't do that.

We need that, like that is helping keeping the grid stable and safe right now because on the electric grid, you know, the amount that you produce has to equal the amount that's being consumed.

And some of those renewable energies and clean energys, for example, nuclear, those can't be easily like turned off and on or adjusted, right?

So you have these things like these Bitcoin miners that can very easily be turned off and on and it helps to actually stabilize the electric grid in a way or capture, you know, a lot of, you know, Texas Bitcoin mining is becoming huge.

There's a lot of natural gas there, and normally there is emitting, you know, they're doing these things called flaring.

It's emitting CO2 in the air, that can now be harnessed and used to mine Bitcoin.

So there's lots of actual use cases for it that could in the end be good for the environment.

- Bitcoin is environmentally friendly.

Let's put it out there, right here first on Forum 360.

So NFTs, digital dog tokens, are these different names for something?

Tell me what they are.

- Yeah.

Exactly.

So NFTs are absolutely exploding right now.

So NFTs, they are based on crypto technology and it stands... - What's it stand for?

- It stands for Non-Fungible Tokens, right?

So what that basically means is that each NFT is completely unique in and of itself.

And if you own an NFT, like in your say, crypto wallet, for example, you are the only one in the world that owns the NFT and you could show it off or do anything that you basically want to, right?

So there's lots of applications for NFTs.

The most common of which right now is art and profile pictures and such, one of the biggest, most popular projects right now is called the Bored Ape Yacht Club actually, I know it sounds very funny, but there are a lot of celebrities that now own these, right?

There's Snoop Dogg and Post Malone, Jimmy Fallon, Mark Cuban, you know, Steph Curry, they all own one of these Bored Apes basically.

And it's kind of like, you know, you're in this special club, it comes with benefits or some notoriety with it.

And those things have absolutely exploded in value, but the art element of it is, it's a small piece of NFTs.

There's going to be applications for it.

The biggest one probably which in gaming, right?

These things called play to earn or NFT gaming, where there's actually communities in the Philippines using NFT based, play to earn games that they're supporting, they're feeding their families literally from video games.

And that piece, that part of this market is very, very early.

It's expected to be trillion dollar market someday.

And that's, that's a very, very exciting use case for NFTs as well.

- So we're getting close to the end.

So I wanna know, should people invest in Bitcoin in your opinion?

How can they do it easily?

And should they be worried?

- Right.

Right.

And I already get a disclaimer, not a financial advisor.

- Absolutely not.

Just in your opinion.

- I can't say one way or another whether people should do it.

- Are you?

Let's say that.

- I am definitely very much invested in it.

Yes.

And I believe that it to be a technology that is going to rapidly increase, rapidly see more adoption.

And, you know, in order to like assess it, right?

There's a lot of, you know, financial advisors that can't really recommend it right now, that might change.

There's not a lot of easy ways where there's no say spot ETFs for Bitcoin.

There's a futures ETF that just came out, but no spot ETF yet, they don't exist in the US, they exist in Canada.

And, you know, potentially that could come to the US one day to make it more of an investible asset, right?

So it could be still early.

I think it's a great portfolio diversification elements in terms of people actually want to go out and do it.

There's a ton of centralized exchanges out there, probably one of the most famous of which is Coinbase.

It's the only centralized exchange that is trading on the US stock exchange.

So it's public company.

So therefore, you know, they have a little bit more of a reputation to uphold.

So I would say that they're probably a very, very safe company.

There are alternatives like FTX and Binance that are also very large too.

- Well, thank you.

I wish we had more time.

- I know.

- But we ran out.

And as we've learned today, cryptocurrency is being utilized more and more throughout the world.

As people start to rely and trust the technology behind it, certainly Bitcoin, NFTs and digital dog tokens are here to stay.

And now, after talking with Greg, I think we are all a little more prepared, a little more prepared for the future.

Thank you.

I'm Stephanie York.

Thank you for joining us on Forum 360 for a global outlook with a local view.

- [Narrator] Forum 360 is brought to you by John S. and James L. Knight Foundation, the Akron Community Foundation, Hudson Community Television, the Rubber City Radio Group, Shaw Jewish Community Center of Akron, Blue Green, Electric Impulse Communications and Forum 360 supporters.