Cryptocurrencies for Dummies : Part II

So after writing the first installment of this column, attending a professional event, I run into … Johnny. Johnny is a fellow professional, and also currently a student of economics at U of Montreal. Now, don’t get me wrong – Johnny is, to me, a statistic. A guy In the crowd that happens to study a subject matter directly connected to our topic of interest, the cryptocurrencies, and their emergence on the world market. Speaking of which, Kodak was the word of the day in the crypto universe, who successfully launched their KodakCoin with much positive outcome, as the stock market applauded the move, and climbed accordingly.

Anywho, back to Johnny – 2nd year student of economics, and we strike an amazingly resonating conversation, and we start it, oddly enough, on the subject of foreclosures.

It’s no secret that the foreclosure debacle, circa 2008, was the latest turning point in economic history – maybe the preceding milestone to the appearance of cryptos? – a turning point that no doubt, changed the face of America as we know it. Simply put, there was the era before the foreclosures, famous for its Enron’s and the apparition of the Euro, and the era after the foreclosures, where you could trade an Iphone for a house in Detroit.

The foreclosures themselves? A joke. A system so complete and complex, supervised by so many layers of legal, governmental and mediatic eyes, and that still bought into toxic financial products on the promise of profit and knowledge of the risks, leading to what could’ve been the end of the world as we know it. Actually, one could argue that it indeed was, as a few large American cities will never be the same, while others are still trying to get themselves together, ten years later, and yet some more would draw a correlative between this event and the movement of the US debt to Japan and China.

“The foreclosures should’ve been a biblical, catastrophic event in our civilization, had we strictly applied the rules of capitalism…Or just plain common sense”, to which Johnny agrees, and to which he adds: “Oh absolutely, but the banks were too big to fail.” That statement swung me sideways, as I believed that this was the expression tied to the automobile industry, not the banks.  Sign of times passing, victors re-writing history, or simple misquoting aside, I was nonetheless impressed with Johnny, which I apparently then swooned with my comparison of the bankers to a manic depressive, drunk, gambling husband, showing up trashed, bruised and battered on an early Monday morning with blunt and inebriated statements of having lost the ring, the car, the pension, the house (again), and then closing with an ask for a $100k loan. And getting it. “Yeah – That’s about right”, he nods as he sips from his beverage of choice.

So, I succumb to the desire, and drop the bomb. “So what are your thoughts on cryptocurrencies?” It was a dirty bomb, it seems…and a stinker, at that. “All of it is organized crime, and a huge bubble. I just couldn’t stand putting money in there”, he begins, as I ponder what exactly he was told, or whether I’m simply too gullible, and all of this is a hoax, or maybe the work of the illuminati. “Not only that, but you need to buy whole coins at a time (…)” at which point little Johnny goes on to prove he knows very, very little on the subject, and I get to reflect on the old truth – Just because the man quotes a bible verse right, that doesn’t make him a priest. I was nonetheless surprised that one could be so close to a subject matter, yet so far from an emerging, game-changing trend.

He went on in a tirade about how criminal and ugly the world of organized crime is, stopping not too far short of drawing a direct link between bitcoin and ISIS. I shut myself down and went into nod and agree with avid interest mode, as I simply sublimated the various accusations, rumours and fear-mongering he went on to associate with the world of cryptocurrency.

I did try to offer a few comparisons and explanations, but his mind was set. So was mine, then – regardless how bright the student is, he’s still subject to the teachings of his masters, which are anything but unbiased.  Proof is, in this case, being that this emerging technology is vastly misunderstood (even by economics teachers, it seems).

In the meantime, Japan has a pop group called the “Virtual Currency Girls”, that not only gets paid in bitcoin, but also sings that you should avoid using the same password twice. That settles everything, right?

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