Kevin Bae: Hey, it's Kevin Bae from kevinbae.com This is the
that's all I got podcast.
Today I'm gonna try something a little different. I'm not gonna
recap any news. Everybody recaps news. Although I guess I still
will be talking about news so it's kind of a recap of news but
it's just more like personal opinion. So I don't know. See
how this goes. I'm gonna see if I can do this without the
headphones on. And maybe it sounds better I feel like I'm
not whispering so much. So let's see. What does that does that
sound any better? Or worse? I don't know. I will see. So and
this episode, episode number what the hell am I on? 19 maybe
19 I think it's 19 it'll be on the site. There was a big story
to me. It was in the Wall Street Journal today. It was about
China making Bitcoin illegal. And the reason this is a big
story to me is that I think this it'll it highlights the
fundamental flaw of any cryptocurrency. Now and let's
see in the story today from the Wall Street Journal, and I'll
link to the story on the blog. They say China's central bank
said all cryptocurrency related transactions are illegal
reinforcing the country's tough stance against digital rivals to
government issued money. In a statement posted on its website
Friday afternoon, the People's Bank of China said the latest
notice was to further prevent the risks surrounding crypto
trading and to maintain national security and social stability.
cryptocurrencies weakened following the statement the
price of bitcoin fell more than 8% compared with its level at
5am. Eastern Time Thursday before paring some of those
losses. The cryptocurrency fetch just under $41,370 per Bitcoin.
According to coin desk, ether tumbled more than 11% to trade
at about $2,795 naming Bitcoin ether and tether as examples the
central bank said cryptocurrencies are issued by
non monetary authorities that's key using encryption
technologies and exists in digital form and shouldn't be
circulated and used in markets as currencies. And this is what
China's bringing up is what I've been saying in different forums,
left and right and I keep getting shut down by everybody
who is heavy into bitcoin by saying that I just don't
understand it. And that's true. I don't understand it. I've been
paying attention to cryptocurrency and Bitcoin,
probably for the better part of a decade. There were some books
that I bought to understand blockchain Oh, what the hell are
those damn books? Hold on, let me I don't have them here in my
office. I have them downstairs on my bookshelf. Let me see
blockchain. Okay, in my Amazon account back in 2016. I bought
three different books. blockchain revolution, how the
technology behind Bitcoin is changing money business in the
world. The next one is the business blockchain promise
practice an application of the next internet technology and
then blockchain blueprint for a new economy. All three of those
books I bought in 2016 because I knew about Bitcoin before that I
even fiddled around a little bit. In the early days when I
first heard of it with Bitcoin mining, you know, I just I
downloaded some I can't even remember where it was all from
but I downloaded some Bitcoin mining software with a bitcoin
wallet and it would just run in the background on your PC all
day trying to mine Bitcoin I never mind a single coin
obviously. Otherwise I'd be holding 40 some odd $1,000 worth
of Bitcoin but I just I just wanted to see what it was all
about. So I did all of that is like okay yeah it was like a
novelty so I stopped and you know Bitcoin just kept
making news I had family members asked me about Bitcoin because
I'm I'm the guy that understands technology and the family Okay,
I have a I have a computer science degree even though I've
never done anything with it. And so everybody comes to me What is
this about Bitcoin? What do you think about Bitcoin? So to me as
as a technology, I find blockchain very cool. Now I you
know, it to me, it's, I don't see how it scales on a massive
level on a global level, you know, I guess, I guess was
storage and bandwidth becoming cheaper all the time, you know,
what I saw back in, you know, 2000, was it 2016, probably 2010
through 2016. When I saw as something that would be hard to
scale probably doesn't matter that much anymore. You know,
transactions on a blockchain is probably easily scalable Now,
given how cloud computing has changed, you know, with
Microsoft, Azure, and Amazon, AWS, and you know, the other
services out there that provide cloud services. So, blockchain
as a mechanism for transactions and secure transactions, to me
seems like a very cool technology that can be used for
transacting just about anything. But Bitcoin is a money. I never
understood it. I just, you know, without a government behind a
currency, there's no way to enforce it. You know it. And if
you look it up in the United States, at least I don't know
about the rest of the world. But in the US, you can create your
own currency. You know, a local municipality can create their
own money. Now, that doesn't mean it's worth anything
necessarily, but you can create it and you can trade it. So
China says that they're going to make it illegal. So you can't
exchange it for goods and services in China. They're not
going to allow you to exchange it for the I don't know how you
pronounce their money the rim renminbi renminbi. It was easier
when it was the yuan, but Okay, there Renmin renminbi there. So
you can trade it for that. Now it's a shot across the bow to me
to cryptocurrency Bitcoin and people who have started
investing a lot of their cash in Bitcoin. I looked up the top 10
traded currencies. And this is according to Wikipedia, so let's
just assume that it's correct. And they have, they had a little
chart, and I just took the top 10. So the top 10 and 2019 are
as follows United States, Euro, Japanese yen, the pound
sterling, the Australian dollar, the Canadian dollar, the Swiss
franc, the renminbi that's China China's dollar. China's currency
rather the Hong Kong dollar and the New Zealand dollar, those
are your top 10. And percentage wise, current currency is being
traded. That's that's the order. The United States is 44.2%. of
daily traded currency, almost half of the world's currencies
traded on a daily basis is the US dollar. Number two is the
euro. The Euro is only 16.2%. So the US by an by and large by far
is The biggest dog in the yard. The Chinese renminbi in 2019 was
number eight on the list. Only 2.2% of daily trades were in the
Chinese currency. So China making illegal doesn't make a
big dent in Bitcoin it's a small dent but it's a dent 2.2% is
still nothing to sneeze at, although it's really tiny
comparatively speaking. But what if
what if the EU suddenly decided to say okay, we're gonna do the
same thing now you got 20% almost 20% and forget about it
if if the United States made the same declaration if the United
States that suddenly you can no longer trade Bitcoin for US
dollars and you were going to make it illegal for you to
transact in Bitcoin or any other cryptocurrency within the United
States or with anything that the US dollar trades for you can
just stick a fork in Bitcoin it would be dead now you know, and
no government on Earth as a true cryptocurrency nobody's using
Bitcoin other than you know the big news in El Salvador but
they're not really using Bitcoin they their Bitcoin, or their
cryptocurrency is pegged to the dollar so they're really using
the US dollar but no government on the face of the planet is
using crypto right now of any kind. China's developing there's
they're they're the first ones to really be developing a or an
electronic version of their money
so they should tell you something so yes, I know no one
can stop anybody from trading Bitcoin as long as you've got an
internet connection, you've got a wallet somebody else has a
wallet you can you can trade the crypto easily quickly you know,
very low transaction fees in Bitcoin that is but what does it
matter if you suddenly can no longer convert your Bitcoin to
the currency of your country? You know, say I've got two
Bitcoin sitting in a wallet and the US has declared it illegal
to transact or convert so what's my best bet try to find a nation
where I can transact in converting converted say to
Canadian dollars and then convert those Canadian dollars
to US dollars? Is that my option? You know, there's
nothing stopping you from trading Bitcoin. But there is
something stopping you from using it as actual money.
Bitcoin cannot buy itself and just because people are using
it, it cannot by itself take over a nation's money unless
that nation allows it. You know, earlier I talked to save
municipality created a coin and I wrote this on the blog and
it'll be there in the show notes. My opinion on this and
maybe I'm wrong. Maybe I'm not but you know, anybody can create
a cryptocurrency. The technology is out there, you know, it's
open source. You know, and there are several crypto currencies
out there. So say I created one for the current state that I'm
living in Georgia, let's call it the peach coin. And let's say
even that the state of Georgia accepts that this is the
currency that this is an illegal currency in the state of
Georgia. And they say I can use it to trade for goods and
services within the state. You can you know, you go to the
store, you buy your groceries, gasoline, pay my accountant,
anything, anything that you would normally do with a US
dollar, I can do it with Pete coin within the state of
Georgia. And that's all well and good until now. I tried to use
peach coin outside of Georgia. What if I drove over to Alabama
And now I need to go fill up my car with gas and All I've got is
a pocket full of peach coin or a debit card account you know
wallet let's say with peach coin and the gas station says nope
will only accept us dollars so now I gotta make that exchange
well if the US has made converting illegal How do I pay
for that gasoline? How does it work you know cryptocurrency
Bitcoin isn't backed by anything US dollar isn't backed by
anything either but except for the giant guns of the US
military the enforcement powers of the IRS you know it's got the
entire US government behind it Bitcoin has nothing behind it
it's not it's not it doesn't represent anything so it's only
worth what what people can say it's worth and without a
government to give it that worth I mean there's people or to meet
people are lucky they can trade it for anything right now. You
know, to me, you know, my peach coin idea once it's once it's
made illegal to convert it to us dollars it's as valuable as
Confederate money as anybody remember Confederate money we
used to make fun of it as kids you know, oh, that's Confederate
dollars and they used to sell it in gift shops. You can go and
maybe there were reprints but I remember going down to Salem,
Illinois at where they had Abraham Lincoln's house and
during you know inside some gift shops they would have the
Articles of Confederation and they would have a bundle of
Confederate money and I can't remember if they were actual
real pieces of Confederate money or if they were just reprint but
regardless it's worth something because I could buy it I could
you know pay a few bucks
and get some Confederate money and maybe I could take that
Confederate money and sell it to somebody else but I sure as hell
couldn't go down the street and you know walk in a store and buy
a coke with it
you know, it's just a novelty and that to me is exactly what
Bitcoin is the fact that that people are putting so you know,
what are the billions of dollars perhaps I don't know how much
money actually people are putting in there but I know
supposedly there's you know well I know there are exchanges I
know it's being traded and people are still mining it but I
think once governments of the world say okay, you've had your
fun now is that worth shit? What are you gonna do in the United
States is you know is already talked about contemplating
digital US dollar I think what's holding that back is that the
United States at least has a private banking system that's
what controls everything. Now it's you know, once we get into
monetary policy and the value of the US dollar and the Federal
Reserve and the US Treasury it's way beyond my understanding of
how all of that works because it's to me it's mostly politics
and it is just what people say it is it's not you know what,
once we left the gold standard when you couldn't look at $1 and
say, Okay, this is backed by a certain amount of gold and that
gold is sitting right over there. Once we left that, it
just became it is what we say it is. And it since the US dollar
has been talking about moving into a digital currency if they
do that, and the EU does that. That's the end of any user
created cryptocurrency which is what Bitcoin is, is what ether
is aetherium whatever you call it, and tether I've never even
heard of tether before that story. Dogecoin one that. Ilan
musk keeps tweeting about I remember Dogecoin when that
first came out to
if the United States comes out with a cryptocurrency I think
it'll be a long road to it, but it's, I think we're headed there
in 10 to 20 years, maybe. If they do There'll be no more need
for traditional banks to hold your cash. As we do now, you
know, I have a checking account savings account as most people
do when you take your, you know, your paycheck or any kind of
money you receive, you put it in there, and you pay your bills
with it, you pay your credit cards with it. But if they go
with their own digital wallet and crypto currency, that would
remove private banking from existence. There'd be no need
for it. Maybe it will be better, maybe it'll be worse when it
comes to transactions and fees and things. But I think it'll be
far worse when it comes to living your life free of
government control. You know, think about where we are right
now with COVID. If we if the United States traded are not
traded, but if the United States had a digital dollar, and
everybody had to have their own Wallet for this digital money
and you can't transact, you can't get anything without this.
Imagine how easy it would be for the federal government to say
well we want you to get a vaccine if you don't we shut off
your money supply you won't be able to do anything you can't
pay your rent, you can't buy food you don't have to worry
about masking or being able to forget about a vaccine passport
that won't be important at all because they just shut you down
and anybody who would want to live without real government
control once we you know once we have a digital dollar you have
to go back to the barter system you have to be you know, trading
chickens and you know, oh, I'll give you a dozen dozen eggs if
you give me six tomatoes you know, maybe maybe that's when
gold comes back. If gold is still worth something maybe
that's when actual hard coins and gold and silver maybe gems
become some form of secondary currency again, because at least
they're you know, it's an actual thing and there's actual
scarcity you know, but it's a thing you know, Bitcoin is not a
thing. It's just it's, it's air, it's gas, it's bits. It's bits
flowing over a wire. It's nothing you can hold in your
hand. You could produce a coin. Sure, you know, you can mint a
coin that represents a Bitcoin. But, you know, you can make it
out of cardboard, it wouldn't matter.
You know, so I really think that
China's move here, has put the first nail in the coffin to
kryptos. And maybe I'm wrong, maybe I'm totally wrong, maybe
you know, totally don't understand how it holds value. I
just don't see it. I haven't seen anybody that's explained it
well enough to where I understand how it holds any
value whatsoever.
You know, I understand the technology behind it and that
only so many coins can be minted, can be produced can be
mined. Let's put it that way that minted their mind.
electronically mined. So once they once they reach the final
Bitcoin that's all there will ever be. And so it's supposed to
be stable. But again, if you can't trade it for something
What do you really have? If you can't trade it for a US dollar
unless you know unless the United States embraces Bitcoin
and calls it and calls Bitcoin its national currency. But I
don't see that happening because the banks themselves don't hold
that much Bitcoin. The US banks don't hold that much. I know
they've been tinkering with it, but I don't know if if you've
got an argument that can convince me that Bitcoin is
worth something I'd like to hear it you know hit me up on Twitter
Kevin Bay is my handle my last name is spelled B isn't boy he
you can send me an email mail he kept me calm on the no agenda
social mastodon server you can go there you know I just I've
listened to so many different podcasts and things on Bitcoin
and nobody has said anything that has convinced me yet that
without government buy in this thing is worth anything. Anyway
that is all I've got for today let me put my headphones back on
so I can hear what I've got up Sorry about that. I just hit the
microphone so I can hear the outro music I gotta find out a
better way to do this. I think I talked better without being
without having headphones on. I don't think I whisper as much I
think I speak more clearly. I don't know. Let me know about
that too. Go to Kevin Bae comm click on any links you feel like
there oh you can send me crypto by the way. I know I know it's
not it's not really worth anything at least in my mind but
you know I just play around with it because I'm interested in the
technology I can see once we once we hit a digital dollar I
can see it easier to pay for media using digital money
definitely. I just don't see it as being a Bitcoin you know
digital US dollar. Yeah. But a Bitcoin No, but I'll accept it
anyway, if you want to send it to me. Or you know, anything
else. There's there are links on the website. This is a
podcasting 2.0 compatible podcast so you can stream crypto
to me if you feel like it. But I really, I'm really interested to
hear somebody explain. It's not like anybody owes me at any
explanations, but I'm really interested to be pointed to an
argument that tells me how Bitcoin is worth something
without government backing. But that's it for today. Have a good
weekend. Because that's all I got. There you go. There's the
music. I'll get it right one day.