Best Life Podcast | Altra Federal Credit Union
Best Life Podcast | Altra Federal Credit Union
Episode 14: Cryptocurrency
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Technology has changed the way we do many things in finance and one of the big changes we’ve seen in the past decade is the explosion and adoption of digital currency in the form of cryptocurrency. Altra’s VP of Deposit and Payment Strategies, Jennifer Cyert, joins Tony for this episode of the Best Life Podcast to talk more about this exciting technology. We discuss some of the basics of cryptocurrency, what to know about blockchain technology, the advantages and disadvantages of this currency, and why May 22nd is commonly referred to as “Pizza Day” in the world of cryptocurrency.

 

(Tony Beyer)

Hello and welcome to the Best Life Podcast where we here at Altra Federal Credit Union are helping you live your best life. I’m your host Tony Beyer, thank you so much for tuning in.

Technology has changed the way we do so many things, especially in the financial field, and a topic that I know that we hear quite often, it’s all about understanding and learning more about cryptocurrency, what is this digital currency, these invisible coins and things that I’m hearing, values up and down, and really to try to make sense out of all of this, I’ve brought in an expert because I tried to explain Bitcoin and cryptocurrency to my grandparents, who are well in their 80’s. I don’t think I did very well I think I just, I completely scared them once I started talking about mining and all these things, and hashes and stuff and they whoa they, yeah. So brought in an expert here. We have Jennifer Cyert, she is our VP of Deposit and Payment Strategies. Thank you so much for taking the time to be on the podcast, Jennifer.

(Jennifer Cyert)

Well, it’s my pleasure to be here Tony, thank you for having me.

(Tony Beyer)

Absolutely. This is a topic that we’ve been wanting to talk about for quite some time. It has definitely been in the news quite a bit and by now I think everyone’s heard of cryptocurrency or something like it, and Jennifer, I was hoping right off the bat, could you tell us a little bit what exactly is cryptocurrency?

(Jennifer Cyert)
Well sure, you know, Tony, we almost have to kind of back up and say what is money? Of course, we’re all familiar with how money works today and all the way back to when people traded things like gold or goods to transact. That that eventually turned into currencies that could be traded like coins or paper money. Eventually, we even changed an upgraded that into things like checks and debit cards and credit cards that we used to transact for goods and services and Investments today. Now, cryptocurrency is a digital currency designed to work as a medium of exchange, through computer networks, you know, like the internet. Now the interesting thing is it’s designed to work without being reliant on a central issuer such as the government or a bank or credit union. So, you would exchange your you know you’re real or your cash money and invest in things like coins are tokens of cryptocurrency that you could then either keep as an investment, or use to purchase goods and services.

(Tony Beyer)

Okay, that makes sense

 

(Jennifer Cyert)

Here’s a fun fact, you mentioned that you talk to your grandparents about Bitcoin. That’s of course the most popular of all the cryptocurrencies.

 

(Tony Beyer)

Yeah it didn’t go well, I think I confused them even more.

 

(Jennifer Cyert)
Did you know the person they give credit to for inventing Bitcoin, Satoshi Nakamoto, is just a fake name? No one truly knows who it is. On Halloween night of 2008, Satoshi Nakamoto published a paper on Bitcoin referring to it as peer-to-peer electronic cash without the need for a financial intermediary meaning a bank, and the rest is history, and the creator remains a mystery to this day.

 

(Tony Beyer)

And it’s so interesting, how I mean in today’s age of technology, how somebody can still remain anonymous or how somebody can, you know, still not come forward and want this. So I think that’s pretty interesting.

(Jennifer Cyert)

I know you would think that someone would want the credit for that. It’s a pretty interesting new technology but I think that’s an interesting fact. Now the problem with an electronic payment system like such as Bitcoin, or cryptocurrency is also known as what they call the “payments riddle,” and this refers to the problem of ensuring that electronic money is only spent once and not duplicated. So, for example, when you use your cash or checks or debit cards and credit cards, those can be exchanged hand-to-hand or even online. But, you know, you can’t take a picture of a dollar bill and text it to someone as a form of payment, right, cryptocurrency and blockchain technology that we’ll talk about in a little bit here too, they’re setting out to solve that riddle while moving that stored value of currency over the internet and validating that transaction through blockchain technology.

(Tony Beyer)

Yeah, I’ve been trying, you know, to pull like a five dollar bill in the USB slot or something, to try to deposit it or send it, so it doesn’t work very well. It just, it just, it just doesn’t work. So, I know that there’s a lot of layers, a lot of things and try to keep it a little bit basic, but in a general sense, how does cryptocurrency work Jennifer?

 

(Jennifer Cyert)
sure. You know, you can purchase cryptocurrency through what’s called an exchange, you know, and you can hold it there and store it as an investment later selling it, ideally for a net game, right? Or you can transact with it and do things like exchange it for other cryptocurrencies, on the exchange. You can also use it to purchase goods and services, but most likely you’ll need to convert it to a digital wallet and use a debit card then for transactions. Most merchants don’t yet except cryptocurrencies, the form of payment now that may change in the future is it becomes more and more popular, but today, it’s not quite widely accepted yet as a payment.

 

(Tony Beyer)

Sure, absolutely. So you’ve mentioned a little bit about the blockchain. You know, that that basically that that ledger. Could you explain just a little bit more about the blockchain and how kind The transactions happen with cryptocurrency?

 

(Jennifer Cyert)
Sure, love to. Now blockchain is also known as distributed ledger technology. You know, when you transact in cryptocurrency buying and selling it, or exchanging it, your transactions are recorded on what’s called a blockchain. Blockchain’s defined as the structure that holds those transactional records in several databases connected through nodes. It all acts as a decentralized distributed ledger that stores the record of ownership when it comes to digital assets. So, kind of complicated, but I’ll give you an easy way to think of it. You know, think of it like this. If I tell you, and only you, that I’m going to give you five dollars right now and you take my five dollars, the transaction is only verifiable between you and me, right? So, either one of us could dispute it at a future time. However, if we do that same transaction in a room full of people or maybe on the podcast, they’re basically all the validators of that transaction too, and it makes it pretty hard to dispute later. So, blockchain is basically that accessible public record of the transaction, does that kind of help?

(Tony Beyer)

Yeah. Yeah. That certainly does,

(Jennifer Cyert)

You know, the technology behind the blockchain especially, you know, with cryptocurrencies is very important because what we’re learning with cryptocurrency is I think what we’re going to see this technology transfer to another use cases in the future. You know, think of the efficiencies that could be gained and transfer of ownership when it comes to complicated transactions, like, titles when selling a home or a car, this could conceivably be done in minutes through a blockchain.

 

(Tony Beyer)

Very cool. Very cool. And this Block Chain, it can be accessed by anyone, right?

(Jennifer Cyert)
Right.

(Tony Beyer)

Very cool. Very cool. So, you know, I would love for you. You to talk about some of the advantages about cryptocurrency.

(Jennifer Cyert)
Sure. Well, you know, first of all, it’s a new and exciting investment and a payments opportunity, right? And as opposed to a traditional, or what we call a fiat currency, they can be used globally anywhere in the world without the need to convert it to a different form of currency to transact. So that’s a nice advantage with cryptocurrency, and of course there’s the ability to transact faster through digital currencies to is the technology and regulations surrounding their uses evolve, you know, even sending money through a wire transfer can take up to 24 hours or more sometimes, but transferring digitally can take place in seconds, not to mention the transaction costs of sending a wire versus sending digitally are much better.

(Tony Beyer)

And I know as far as cryptocurrency, I mean, when it first started off, I don’t know how long long time ago, but it wasn’t worth very much. And now it’s worth quite a bit more than when it started. So, it’s definitely another advantage right now of cryptocurrency.

 

(Jennifer Cyert)

Yeah, definitely. And you know, anyone can use it, all you need is a computer or smartphone and an internet connection. So, this could be beneficial for those people without a bank account though, I would still caution on using a very reputable exchange site to do this, and the security is very important. So, unless someone gains access to your private keys, which is kind of like your user ID and password, they can’t access your cryptocurrency, however, you give out that information, there will be no way to recover your funds. So you have be very careful.

(Tony Beyer)

So it’s just like, if you were to give your user name and password for online banking to somebody else and they are responsible for, that makes sense.

(Jennifer Cyert)
Correct.

(Tony Beyer)

A lot of advantages with cryptocurrency. What are some of the disadvantages when it comes to this, you know, digital currency, Cryptocurrency?

(Jennifer Cyert)
Sure, you know Tony as with any investment, you could lose money. So that’s a disadvantage and that can be scary for some people. Also, there are thousands of cryptocurrencies out there a lot more than just a handful that existed, only a few years ago, and of all of those, not all are active, or even valuable. The learning curve to understand cryptocurrencies and investing can be difficult and it changes every day. You know, it can, it can also be difficult but important to understand the fees you pay to invest in cryptocurrency, even with the reputable sites. It’s critical to only invest in cryptocurrency through reputable site because of the fraudsters that are out there trying to lure people into investing and tricking them into losing their money. That’s a disadvantage a little bit, so you’ve got to be careful. So how about a fun fact Tony?

(Tony Beyer)

I love fun facts Jennifer, yes.

(Jennifer Cyert)
Ok, so May 22nd is known as Pizza Day in the crypto space.

 

Now, a man named Laszlo Hanyecz, not sure if I’m pronouncing that correctly. We know it was a man named Laszlo, sent out a request to purchase two pizzas for 10,000 Bitcoins and this was the first purchase ever made using Bitcoin. Now, I’m sure Laszlo wishes he had not spent that much on pizza because like you mentioned Bitcoin trades for nearly twenty-four thousand dollars per Bitcoin today and it’s been as high as about seventy thousand dollars per Bitcoin. So, 10,000 Bitcoins for a pizza.

(Tony Beyer)

Wow.

 

(Jennifer Cyert)
I hope that was a good pizza, but very important because that’s the first purchase that was made using Bitcoin, so, it’s commonly called Pizza Day.

(Tony Beyer)

Yeah. Okay makes sense. So it’s, that’s groundbreaking but I’m sure he does not like being known like, hey, there’s Lazlo the guy that, you know, blew all this money on a pizza. I’m sure he wishes he had that back as well, but we need somebody’s got to start it, you know, it’s got to start from somewhere and I’m sure at the time, it was, it was probably a deal. Who knows? Who knows. Excellent. So I was curious what Altra has plans for when it comes to cryptocurrency or what, what is the credit union looking to do or how to possibly incorporate it?

(Jennifer Cyert)
Sure, you know, Altra has closely watched developments with cryptocurrency unfold now, over the last few years, and first off, we wanted to learn as much as possible about it and gauge our member’s interest and their use of cryptocurrencies. We know that we have a membership that’s very engaged in cryptocurrency today, and, you know, we can monitor the overall level of deposits that members invest in cryptocurrency to a certain extent. Our next step that we want to take us to educate our staff and our membership about cryptocurrencies and what the future might look like. So, we are considering options to be able to offer cryptocurrency to our membership. It’s important for us to find a way for members to invest safely, rather than using an Internet site they might not be familiar with where they could lose money. We also want to find an option that will be cost effective for our members without charging them hidden fees, like there could be with various internet sites. So, while we can’t control what the values of cryptocurrency will do in the future, we want to provide a safe platform for members to utilize if they are interested.

(Tony Beyer)

Absolutely, absolutely, and I know that’s a question that I get quite a bit in my presentations at schools or organizations, you know, for our adult members and things just learning learning more about crypto, and I think that’s one of the best investments you can make in cryptocurrency is just learning more about and really understanding it, and I’m so glad you’re here with us today to enlighten us and let us know a little more about it.

(Jennifer Cyert)
Sure. I want to point out too, you know, through our Altra Financial Advisors, we do have some limited options with ETFs to choose that are better for those that are interested in making that part of their Investment portfolio.

(Tony Beyer)

Excellent, and we visited with Sue and Brent, a few months ago, when it comes to the Altra Financial Advisors, and you can find that episode of the Best Life Podcast wherever you get your podcasts, or on altra.org, but I was curious Jennifer, do you have any general advice, you know, when it comes to cryptocurrency or what people should know if they’re thinking about investing in it or trying to learn more about it?

(Jennifer Cyert)
Yeah, sure you know, it’s a great opportunity to learn about cryptocurrency because I think it’s here to stay. There are countless articles to read and videos to watch to learn more and it’s in the news every day. So, if even if you’re not comfortable and investing in it yet, start out by learning about it, and if you are going to invest in cryptocurrency, be very careful and make sure you work with a reputable company. If someone approaches you on social media or through an email with an investment opportunity, it’s likely a scam. Now, here at Altra, we’re going to do our best to keep you informed with future podcasts like this.

 

(Tony Beyer)

On this episode of the Best Life Podcast, we spoke with Jennifer Cyert, who is Altra Federal Credit Union’s VP of Deposit and Payment Strategies.

Well, that’s going to do it for this episode of the Best Life Podcast presented by Altra Federal Credit Union. We appreciate you taking a moment to learn how you can live your best life. If you have a question or a topic you’d like us to cover, send me an email at: [email protected] and who knows, it may even make it into a future episode. Don’t forget to follow the Best Life Podcast pretty much wherever you get your podcasts or find it on our website at altra.org.

As always, thanks again, be well, and we’ll talk to you again soon.