At their November meeting, George Sebastian of the Symposium Club, gave a presentation on Crypto Currencies and the various versions of this digital currency.
Sebastian explained that “Bitcoin, developed in 2008 to be a private currency, was the first digital currency.”
“And, like all currencies,” continued Sebastian, “is was to be a form of payment that can be exchanged for goods and services.”
“There are more than 10,000 different crypto currencies today and their value changes hourly” he explained.
All crypto currencies are “mined” by computers via a complicated mathematical process. Sebastian showed several YouTube videos that explained the involved process of purchasing crypto currencies.
Sebastian said that “digital currencies are “mined” using ASIC (Application Specific Integrated Circuits) microprocessors.” The sole purpose of these devices is the “mining” of digital currency.
He explained that “each ASIC miner is constructed to mine a specific digital currency” which means that “a Bitcoin ASIC miner can only mine Bitcoin.”
According to Sebastian, “it currently costs between $7,000 and $11,000 to mine one Bitcoin. At the current price of $56,000 for one Bitcoin it remains very profitable.”
In today’s world “crypto currency is used for many illegal transactions from money laundering to the currency of choice of drug cartels” speculated Sebastian.
Crypto currencies are legal in the United States but China has banned their use.
Sebastian cautioned that “crypto currencies are very speculative and highly volatile.” He warned that “mining crypto currencies are not for the small-time player.”
“Crypto is not an investment for your 401k or IRA accounts” he stated.
According to Gary Gensler, SEC Chairman, “Right now, we just don’t have enough investor protection in crypto. Frankly, at this time, it’s more like the Wild West.”
Sebastian concluded his presentation by stating that “it will not replace the financial system as we know it.”
“It will be an investment option for many who are looking for a high risk high return option for a portion of their portfolio,” he said.
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