Show Notes
Basic Cryptonomics 101: What IS Cryptocurrency?
#Crypto #Cryptocurrency #podcast #BasicCryptonomics
Website: https://www.CryptoTalkRadio.net
Facebook: @ThisIsCTR
Discord: @CryptoTalkRadio
Basic Cryptonomics 101: What IS Cryptocurrency?
/
RSS Feed
Episode
•
March 19, 2025
•
00:29:59
Hosted By
View Full Transcript
Episode Transcript
[00:00:01] Welcome to Crypto Talk Radio, the podcast for everyday investors like you. Visit us on the [email protected] and now here's your host, Leister. Thank you for that, Bailey. And welcome, everybody out there in Crypto Talk radio, [email protected] Allergy season is once again upon us. I will apologize in advance for any sniffling that may escape and get through the recording, and I will welcome you back to the show if you're not new, and if you are new, I'm going to let you know up front. Today's episode may be a slight bit dry because I'm going to focus on the basic Cryptonomics 101, mostly because there's not a lot of significant news, but also because I committed to doing that and getting back to it. So it may actually be of interest to you, I'm not sure, but it will be a slightly drier episode. Be sure to check out our historical episodes in the archives@CryptoTalk FM for sure, so you can get a sense of the broad spectrum of coverage that we do. It is kind of all across the board, but I figured it's time for me to get back to 101, be a little bit more diligent about it. Thus, today's episode probably won't be as long as usual. And I have a couple news bits, but nothing very significant. Just a quick personal update, more to keep everybody in the loop, of course. Xenoblade Chronicles X releases two days from now as I. As I record this, I believe. And that's a big win. That's the last popular game from the Wii U that was trapped on the Wii U that is now freed from that prison, headed to the Nintendo Switch. And of course, I've said that Nintendo Switch is the TBE of video game consoles. It's not the PS5. It's garbage. It's not the Xbox Series X. It's garbage. It's not even PC, frankly. Although PC is a great gaming platform. It really is the Switch, the Switch is the standout star by far. That rhymes. It's got all sorts of great games, and Switch 2 apparently is upon us this year. I think it said summer maybe, and people are kind of curious about what that's going to mean for the games, the Switch 1 games, and whether they're gonna be upscaled or get better boosts in performance. We know what emulation can do for those games, and that's got people kind of excited. For 2025, of course, cryptocurrency had people excited for 2025 and then all hell broke loose. And that's part of some of the news bits I'll talk about separately. I did get my tinting done. The windows, my bow windows look amazing. I've got my lighting set up there. I tried to. And I got my drapes kind of hung up in a very much nicer fashion. So it looks really good. I took a Polaroid, really nice Polaroid of the, of the visual. And if you, if you didn't know any better, you would swear it comes from 1960s. It's a I, it's, it's probably the best photo I think I've ever taken. And I can't understate or overstate just how amazing physical photography really is when you're good at it. In any event, let's dig into our couple news bits and then get into our Basic Crypto Domics 101. Hopefully you enjoy it.
[00:03:21] CoinDesk.com and we're going to go ahead and start with Bitcoin. And bitcoin had a little bit of a interesting journey here very recently over the past 24 hours. A low of 81,000, a high of 84,000. Currently around the 80, just shy 83,000 mark. Although people suspected it was trending down. When I zoomed to the month chart, I did also see a downward trend risk. Some other analysts speculated that we were headed if it was not able to hold 79,000 I believe is the threshold they called out that we were headed all the way down to the 71, 72,000 mark. I personally looking forward to such a drop. Some people said that a lot of the risk right now of cells that were going to be happening were coming from people essentially they bought high, they bought over 82 to $83,000 and were then selling either because they were just, you know, I could screw this crypto thing, you know, that kind of, you know, there was that or some people made major profits. Let's say they bought in at 83 and it skyrocketed up to 120. Right. So they took their profits out. And most of the messaging is that that's a significant risk this time around of sell pressure is around people who bought above the 83,000 threshold. Thus the risk that things might go back down. Then there were other risks and concerns coming with fomc. Apparently there's going to be some news coming out very soon. That's what I've been told.
[00:04:47] Donald Trump pressuring Jerome Powell to lower rates. And of course we know they don't really like to do that too much. And we don't know what the market will react if the rates are lowered. There's also potential concerns around the use of money spread out in different places, coming around from the government, all these savings and talking about giving checks to people and Social Security, you know, and so does an influx of money come flowing into cryptocurrency or the inverse? Does less money come out than was expected and it causes a sell run? Nobody really knows what the true story is going to be. I will say that right now Bitcoin looks like it's on a strong, not a strong, but a slight downward trend from what I can tell. And I am, I am optimistic in it going down because I do think it needs to get back to some level, sanity. Then I looked at Ethereum. Ethereum was nowhere close as volatile. High of just shy of 1900, a high almost the same. Not very much volatility in the middle. Currently about 1900 as I record this. And then the monthly is again at risk of a downward, just like with Bitcoin. Now, the good thing about Ethereum, and I was excited about this, I did a couple of coverage bits about how people were pissed off about the idiot Vitalik, the rug puller.
[00:06:00] Apparently the Ethereum foundation is starting to look into and listen to various members of the community, and hopefully they're listening to Leister CryptoTalk FM when making these decisions. But they're allegedly hearing the voice of the community and shifting to make changes. I know idiot Vitalik talked about leadership changes and things that they were doing, but all of this circles around mostly, I shouldn't say all. Mostly circles around what people see in terms of the use of money, that it seems like the dumps, right? Does he have a girlfriend, et cetera. All the dumps were part and parcel to it. But also Ethereum never recovered. It never got back to where it should. And people were kind of questioning whether that was the failures of the Ethereum foundation causing that suppression and whether new leadership would make a difference or make a dent in what we saw. I know a lot of people have been looking and saying, well, yeah, but look what Solana's doing. We could do well, let's just not get ahead of ourselves because of course Solana did that nonsense DEI crap they did before about gender identity or whatever. And I didn't even look at it because once I saw gender identity, I knew it was something to avoid. But what I was told is they did some analogy to gender identity with relation to Some identification of something and it pissed a lot of people off. And then Solana took a crap. And because Solana took a crap, all the other garbage tokens on the Solana chain likewise took a crap. So we should not be trying to compare the failures of Ethereum to the alleged success of Solana, because Solana apparently has idiots just like Cardano and just like Ethereum. See, once these leaders of these orgs get these big heads, they just go and do whatever the f and they don't really care about succeeding for their investors. The only exception I saw is arguably H Bar and to a lesser degree, Avalanche. But I haven't seen those going major runs either. So with Ethereum, all the suppression and all the crapping and everything again seem to circle around the use of money largely, but also just an insufficient performance compared to the rest of them.
[00:07:58] Ethereum leadership have been getting a lot of criticism. It's important that you know this. It's working. They're listening. They're thinking hard about how to adapt. It's a teachable moment for them. Stop. Do I think that they're truly listening? No. Do I think that they're truly thinking about how to adapt? No. Do I think what they're doing is just shuffling a little bit around just to seem like they're doing something? Because you got to think, if they really wanted to make this better, the first step is to acknowledge that you screwed up when you shifted from proof of work to proof of stake, because that was the beginning of the fall. Once they made that change, nothing was the same. Everything seemed to suppress. We never got back to success. And we knew a lot of the mining profits were directly correlated to proof of work mining. And Ethereum was right at the dead center of it. So when you take that away and you go to proof of stake, we're not in a better situation than we were. What happened is Idiot Vidlick bowed down to the Greta Thunberg people of the world and was freaked out because of energy usage instead of the reality, which is that, you know, Bitcoin has been proof of work. And the bottom line is you've got to have proof of work to make it effective and viable and marketable. That's just the truth. Proof of stake was never going to be that. Certainly not for Ethereum and not at that late stage. All the other layer twos, it was fine for that to do that, but I don't think that a theory should have made that leap. And I think that's what killed the business. None of the Ones that are hardcore proof of stake have been anywhere near as successful as Ethereum got at its prime. Consider that. Look at all the other chains out there, all the other layer ones and layer zeros out there. None of them got to anywhere near the level of success that Ethereum did. All the ones that are doing proof of stake didn't get anywhere near. Whether it did, we have to answer the question. This is the reality of what people are feeling. I think going away from proof of work was the biggest mistake. And unless you can go back to it some mystical way, I don't think it's going to change. I think we're always going to be in this middle ground with Ethereum where it's never going to get to true success like it should have by now, even when Bitcoin runs back up, as Bitcoin is expected to do.
[00:09:59] That's my personal opinion on it. Let's talk about our basic 101. But real quick, just, just as a side note, Telescam, I did an update about Pavel Durov from Telescam. Him getting arrested after he got the plane. Apparently he got released and he was headed back to Dubai, I believe it was, and then went on defense mode about all the criticism about Telescam and all the platform things that have been happening over there with people getting their stuff robbed. And apparently there's, there's also like drug trades and child porn and all sorts of crazy stuff going on that I didn't know because I don't go to Telescam, right? Because I don't. And then Bleas talked about something with a phone call scan, like it's bad. And so this, this he, him being defensive about it surprised me because I know, you know, he had said before he got arrested, he's aware there was some stuff going on and he was hesitant to get involved because he wanted it to be an independent platform. He didn't want to be, you know, kind of this cop type thing. And then they decided to change stuff. And the only reason, you know, right now people use Telescam is to do illicit trades, whether that's what I just described or it's crypto or something else. They only use it for illicit behaviors. They don't use it for good stuff. Anybody who says they do is lying to themselves, which is the truth. But Durov, again was heavily defensive of the platform, quote, when it comes to moderation, cooperation and fighting crime. For years, Telescam not only met but exceeded its legal obligations. Stop. Do I agree that it met its legal Obligations? No. Do I agree it exceeded Hell, no. The reason I say it hasn't met is because the legal obligations he's referring to is around certain jurisdictions where they have a light touch and they don't go after the true criminal element. That would apply because they sure were not enforcing on the United States legal obligations at all. Because the legal obligation United States is you are not to be promoting any sort of criminal behavior. Or did we not learn from Ross Ulbricht and Silk Road? Because with Silk Road, that dude served jail time when he didn't do anything. He just provided the platform. The illicit behavior happened outside his control. He did have a stash, stash of Bitcoin, and I believe he still does. Point is, he was not doing the illicit trades. Other people were on the platform he provided. How's that any different from Pavel Durov? Then I had somebody on YouTube talking about how that's not fair and he's a great guy.
[00:12:20] The bottom line is we have to be consistent. I don't care if you want to believe that he's just some savior and Telescam is innocent and because he wasn't directly doing it, he shouldn't be going to jail. I don't care if you believe that. But if we're going to hold Russ Ulbricht at that time culpable and you know, kim.com culpable for mega upload, we have to be consistent. That means he should serve time for the same reason. Then we have to understand that Telescam didn't even implement any hard controls until after he was arrested. If we truly knew, if we truly knew that all this stuff was happening, why didn't he implement those controls before he got arrested? He himself said he didn't think he should have. He didn't think he should be that police officer. Well, now he's switched gears and says we're at the top. How can that be when you said you don't believe that you should be, that we know what it is.
[00:13:13] So the bottom line, Telescam is Telescam. It's always going to be Telescam. It's never going to change. It's not going to get any better. I don't care what moderation controls they claim to have. They're not going to be doing anything to fix the problem. It's always going to be a cesspool and I'm never going to talk about it.
[00:13:28] So I'm done with. I'm done with telescope. Okay, basic cryptonomics 101 today. I thought it was good for me to elaborate on a very ironic yet simple subject. You might be surprised to understand that some people don't know what cryptocurrency is. Right? You don't know what it is. You don't exactly know how it works, and you're curious and you're struggling with it. And for some, they just kind of take it on face of what it must be because of trades. But some are genuinely curious about, well, what, what the hell is it? Right, I'm going. I looked at various sources that they claim to simplify what cryptocurrency is, and frankly, none of them understand how to explain at a simple fashion what cryptocurrency is. So I'm going to do my best to explain from my lens what cryptocurrency is in a way that you can hopefully wrap your head around. And if you do have questions, feel free to reach out. CryptoTalk FM, hit the contact form. But I'm going to do the best I can. I'm not going to guarantee that you will fully grasp it because unfortunately, they have made it more complicated than I think it should be.
[00:14:47] In order to understand cryptocurrency, you first must understand currency. Let's simplify the definition of currency then. It will hopefully help understand why this got so convoluted. Currency at its simplest form means that I am giving you something. Whatever this is that I'm giving you is a currency of some form in exchange for a product or service. That that's what currency is. Currency could be sex for some people. Currency could be paper money. Currency could be a trade. Currency could be anything. It simply is something I'm providing you for something, some product or service. That is currency in its simplest form. That means that you could in theory have precious metals as a currency. And at one point we did, we found it was not practical to be trading precious metals. Somebody had the bright idea of simply creating what is essentially a promissory note.
[00:15:44] The promissory note is a piece of paper that is given to somebody that basically assures you a share in, let's say, precious metals. But it could be anything, a share in something that sits somewhere, let's say Fort Knox, but it could be anywhere. And you are assured that a share of this is entitled to you. You, you don't hold it directly. The promissory note is as good as, meaning that you can then use it as currency. And this is what born our currency system, at least the United States, given that high level, very simplified, no frills attached definition this is how we ended up in a fiat situation at first, was it was associated with precious metal, that being gold primarily. We also minted different coins, right? So you have copper, you have silver. We took precious metal and we created a system of not direct ownership. We issued these notes to people and the notes entitled. You essentially said you are entitled to a share of it based on holding it. Later, we decoupled from gold, which is what allows us to now print and print and print and print and print. Well, you might ask, how then does the currency have any value?
[00:17:00] The currency has value by way of debt. You're like the debt. This is where it gets the rabbit hole. This is why people say that the government and the way the government has done currency is a scam debt. Just by simple definition, debt simply means that there's money owed from somebody. Okay? You can actually wrap that debt into something that you can sell to somebody else. By selling it to somebody else, what are you essentially doing?
[00:17:31] That person is now entitled to receive what, interest, some sort of residual, some sort of repeat money, something else they're entitled to get. Let's say you buy a house. If you buy a house from your local bank, your local bank may or may not want to own or hold that debt because in their mind perhaps your credit wasn't good enough to do it. Maybe they don't have enough on the books to hold the risk. Whatever their reasoning is, they may not want to hold it. So they'll sell it. And they'll sell it to like a Fannie Mae or something else under the hood.
[00:18:08] They're selling the actual debt, the actual debt instrument to those orgs, those orgs pay for it. So they'll say, we'll give you ownership of this asset. Essentially you give me the money for it, they get their money back. The bank that issued you the loan, they get their money back. This underlying now asset becomes a security because it's secured by something. And then because it's a security, they can do trades and do all sorts of fancy stuff. I'm not going to go down the rabbit hole. The bottom line though is that there's currency exchange by way of debt instruments that exchange hands to different entities. And by doing so, you can simply pay and get your money back. Even though you originated a loan, you're temporarily making money available to buy it from the seller and then they get their money back.
[00:19:01] Understanding how that all works is not important for the purpose of this conversation. Suffice to say, there is debt that is available, made available, sold, traded, transacted and in exchange, money is shifted and all of this then becomes securities. All of this ties to the securities market.
[00:19:21] Well, in the cryptocurrency world, the idea of an issuance of money, I'll use the word money, although it's not really true. The idea of issuance of money takes form of something where there's a contract that's issue on blockchain. The blockchain is nothing more than a ledger. And to define the ledger is simply more than accounting of transactions. That's what a ledger is.
[00:19:51] Within this accounting of transactions, there's also an issuance of, let's say, 1 billion of a certain type of asset. And it's simply duly noted that there's 1 billion of a certain type of asset. It doesn't physically exist. It's just there's 1 billion and then there's an account.
[00:20:09] The account is a virtual account. The account doesn't really physically exist. There's no bank, there's no nothing, and there's no fiat, Right? It doesn't really have intrinsic value. At that point, let's assume you issue this 1 billion of whatever this asset happens to be. Let's assume that you happen to, in your empowerment, you happen to say, I am, I don't know, BlackRock or something, and I am going to issue my own token. Now, I don't think they'd ever do this, but let's say they did. I'm going to issue my own token. There's going to be 1 billion of these tokens. I am going to issue them to you guys, you rich billionaire mother, fathers, But I want money out of you, right? So I'm going to price it. I'm going to put it on the fair market and I'm going to price it at X.
[00:20:59] They'll say, what's the value of me buying it? Why am I buying this? You say you're buying into. And this is where the SEC gets kind of iffy. You're buying, essentially you're buying into our value because we are pricing it according to the value of our stock. Let's say I'm making something up.
[00:21:19] So they did not. You're not getting shares of the company, you're not getting any sort of ownership of anything. They're just basically saying, we're going to price these according to our fair market price on the stock market side and then make these available for people who want to trade it. You say this is available now to you. If you want to buy it, go to this exchange or whatnot. They say, why should we buy that? Well, we could just buy the stock if it's all equivalent. You say, because if you buy it through the stock market, the banks are open nine to five. You can't, you know, there's halting.
[00:21:54] You're in competition with everybody else. We have all these regs and all this stuff on the crypto side, we ain't got none of that.
[00:22:02] Right. So, and I'm, I'm just giving you a scenario so you understand the mechanics. Let's, but let's assume they did that. These rich mother fathers say, oh, okay, so I don't have to follow any laws and I conduct taxes and okay, that sounds pretty good. So they say, all right, fine, I want to buy X and this person buys Y or whatnot. So now you've gotten some angel funding essentially to get it off the ground. You've got some people that are buying into it. Then you make the rest available in the open. By that point you have now set it in people's minds that it's worth X, whatever X happens to be for a billion that might be a dollar per whatever that is or might be higher because they let the rich mother fathers in first before they let you in. Point is they've already established a price that is of some value to somebody. There's nothing really to it because it's just artificial. It's not real.
[00:23:01] Cryptocurrency is nothing more than this. It's an accounting of assets. It is, there's some, it's numbers on the blockchain. And we have said somebody's issuing a certain amount of them and we have tried to trade them on the open market and we've said that when we trade them on the open market, its price is going to be X. And somebody has said they're willing to pay X, why ever they're willing to pay it. That's what cryptocurrency is. Your next question then is, well, why would I bother? That's why you have to do your own research and why you have to think about it before you yolo into a project. Because there's no real true fundamentals behind the vast majority of them. Much of the trading that happens today is artificial. It doesn't, it's not real. There's nothing behind it. It's just sentiment based the idea that somebody is enticed to pump money into it to cause an upward trend. Those people are going to sell because they're trying to get their money back once it doubles or something other people see A green candle. And they buy. It's not what they're supposed to do, but that's what they do. And the cycle continues. That's all it really is in the cryptocurrency space is this notion of. Of artificial price being set from artificial means. You'll have garbage out there like Devi and all these other ones that claim that they're going to do something.
[00:24:22] They may or may not. You don't know if they will and you don't know if they won't. That's what makes it a gamble. You're rolling the dice that they do and that you strike it and that you got in early.
[00:24:33] I'm not suggesting that they won't. If you look at something like Shib. Shib doesn't do any. Anything. Even now, years after the fact, it's got a blockchain that doesn't do anything. It doesn't matter. Doge doesn't do anything. You're simply gambling on price movement. That's artificial. There are people who are pumping the price, and there is a slight bit of supply crunch and other macro factors. The point is, it's all fake, it's all artificial. There's nothing really to it. There's no real fundamentals to it. And at the end of it, it's fine if you do it, but you have to understand that there's nothing solid behind it from the crypto side, which is why most of you hear the word descend as somewhat superior. Because people don't want the government getting involved or getting in the mix of it. They want the government to stay out of it. I don't really have a stake other than I would like to have smart regulations, because I understand this is a space that doesn't really have any true strong fundamentals to it. It's really just a gambler, for the most part, across the board. So if you're ever curious in your head. I know it seems oversimplified the way I describe it, but that's essentially what it is. It's numbers on a blockchain. It's essentially a ledger. It's duly noted. But there's nothing there. There's nothing you're really transacting. It's very little different then, than printing of physical money, because you're printing physical money with nothing really behind it other than a promise of debt to another country, because we sell our debt to other countries, or a promise of savings from our internal things that we do. There's no real fundamentals to it. It's just kind of an accounting, it's an agreement, it's an understanding.
[00:26:18] It's not real because we have decoupled from real assets. With respect to value, value is now perceptive value. This is what largely causes inflation spikes. The idea that there's so much more money floating around we have to increase price because the value of each is crap, right? Cryptocurrency is no different. The more tokens you have, the less they have value. And so. And it's hard to get any sort of logical price movement. You can't get real value from people to get them to buy into these things. You can't get them to go like you saw in 2021, because people are smart. They're smart to the business. They understand. It's all basically a game. It's what it is. That's no real fundamentals to any of it. That doesn't mean you cannot make money. It means you have to be careful about what you do when you try to and realize there's nothing to it. And it's all timing and gambling and it's skewed against you. The rules are skewed against you because a lot of it's coming from international shores. Which means the times, the critical time slots, when you should do trades is often points that you're asleep. So you've already missed either the low point, right, where you should buy, or the high point where you should sell. You're usually in the middle ground almost every single time. If you don't believe me, look at the graph. You'll see what I'm talking about, because that's strategic. They understand it, and they understand it's a battle between countries, it's a battle between time zones. It's a battle of general sentiment. It's a battle of all the other factors that are happening at the world stage. It's all scan, you know, slanted against you. So you do have to understand this is a game. It's a rigged game. It does not mean you can't get money out of it, but it's a rig game. Cryptocurrency is nothing more than numbers on a chain. And its value is perceptive value. It's not real. It's perceptive. Bitcoin is a perceptive value, not because it really does anything, not because it's truly worth anything, but simply because others have created the perception of value. Whether or not that perception will turn into true value is yet to be seen. For right now, it's perceived value, and you are trading it under that perception only. There's nothing beyond that. Hopefully that's been informational for you. Again, if you have questions or you have contradictory comments, feel free to hit us up. CryptoTalk FM is the comments form. In the meantime, and in between time, we've got some tough times allegedly ahead of us in the price movements. I would treat any dip as a savings if you really believe in the project. That said, given my definition of what cryptocurrency truly is, which I do, encourage you to go and vet against whatever source you choose, given what it is you are risking. So make sure that the money, if you do choose to do it, is throw away. Make sure it's not throwing all your money at something. Make sure that you're safe and comfortable with the amount that you do. Make sure you're not throwing away money that you truly need, because I don't want to see people get the tokens took.
