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Welcome back to geek time. We're gonna be talking about cryptocurrency for the advanced lesson. Hey, what's going on? Lulu?
Well, I'm prepared to be even more confused.
Hahaha. Don't worry. I think this might be easier.
Yeah, in the previous episode, we were talking about how cryptocurrency has no central authority or central regulatory bodies to really oversee it. For me, that just sounds like a problem waiting to happen, really sounds like troubles. Because definitely, some people are gonna use it for criminal activities, you know.
Exactly. That's one of the things that a lot of people talk about cryptocurrency is the fact that it's connected to crime, which is - you can say that for just about any currency, but cryptocurrency is like the major tool for criminals who are online.
Because there's no regulatory body. There's anonymity. Just really a hotbed for a crime.
Right. You've like - we've talked about the Silk Road before.
Emm. Dark web.
Yeah. Using the dark web that are connected to buy and sell goods. All those goods are sold or bought with cryptocurrencies.
Because it's much harder to track and to trace.
Yeah. It's nowadays the markets are trying to get people to have their name connected to their wallet, but not every market requires that.
And so, there is a bunch of people out there that have cryptocurrencies that have just a wallet with no name attached to it.
Yeah. Because that was the original aim, that was the original meaning of cryptocurrency, right? They don't want a centralized authority to control all these money transfers. Would there be a lot of money laundering in cryptocurrency?
Yeah. Like cryptocurrency, just in like 2021 alone, there was something like $8.6 billion of money laundered using cryptocurrency. That's not even the beginning, like every year that happens, there is other issues involved with cryptocurrency. When you have so much crypto, you can actually use that to affect or inflate the market. You have people that have large sums of cryptocurrency, not only are they using it to launder money, but they are actually able to increase the value of the currency they have, by just selling it to each other for the same amount of money, which increases the amount of trades, which makes people think that it's worth more, and then people buy it for more.
Oh, okay. I think I've heard of this. This is called wash trades, right?
Right. It happens on the stock market too, gold markets, but it's rampant and in some markets with like cryptocurrency.
Yeah. So, it's the whole idea is I have some cryptocurrency, I just sell it to you, you sell it back to me, I sell it to you, you sell it back to me. And so, by doing that we're trying to make it seem that large amount of this cryptocurrency is traded on the market, therefore inflating the value of it.
Right.
I think the other problem with cryptocurrency is a lot of people obviously use it for speculation. So, like really really - like gambling.
Right. Just like buying stock, you want the value to go up. People are investing money in the cryptocurrencies. And when you see like the increase in like the value of Bitcoin over the years, went from something that was worth pennies to being worth thousands of dollars. I think it's worth $30,000 now, and it’s worth $60,000 I think at the beginning of the year something around there.
And so, people can take a small investment and make their investment increase 10 times or maybe even a hundred times their original investment.
It's a market for gamblers. However, like we talked about last time, most of these cryptocurrency, they do not really have the staying power. They will not be able to really maintain that high value over long term or keep growing. It's very volatile to go up and down fluctuate wildly.
Mhm. Yeah, when we look at just like we mentioned Dogecoin earlier, but you could have like five Dogecoin for a penny in 2020. But ...
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