Jim saw a bitcoin ATM machine at the mall. What is it? Leo says that you give it cash, and it then generates a bitcoin and transfers it to your digital wallet or using an app like Coinbase. Or you can give it your bitcoin wallet ID, and it would then transfer it to that account. But Leo doesn't really trust them because you're giving it literal cash, and trusting it puts the equivalent in bitcoin into your account.
CryptoCurrency continues to rise in value as more people seek to acquire it and use it to pay for goods and services. Currently, BitCoin's value is over $55,000 as of 2/21. Leo says that bitcoin miners will only be able to generate 21 million bitcoin before it comes to an end as far as BitCoin is concerned. And the closer users get to that amount, the harder it will be to mine bitcoin, which is achieved by solving complicated mathematical problems. But that isn't stopping bitcoin miners from trying.
Based on deals with Mastercard, Visa, Uber and others, Facebook is poised to launch their own cryptocurrency. But the Global Coin Consortium has bowed out. Leo says it should be nicknamed "Zuck Bucks," and the major problem is, that Facebook users will have to tie their bank accounts and other financial information to their Facebook account, and considering their security challenges, that's not going to end well.
Known as Project Libra, Facebook will launch its own cryptocurrency through partnerships with Visa and other companies. Leo says that while interesting, the problem is it requires users to connect all their financial information with their Facebook profile. Hmmmm. That's not going to fly
Chris wants to talk about Kodak Coin, a new cryptocurrency created by Kodak to give photographers and other artists a means by which to get paid online for their art. Chris says that Kodak is going to do an initial coin offering, or ICO, that will enable people to buy into Kodak Coin. Leo says that Kodak is just jumping on the Bitcoin bandwagon, and Kodak is just slapping their brand on cryptocurrency. But it could be a benefit to photographers to manage their assets and get paid for it.
Mike's Coinbase Bitcoin wallet has a corrupted IP address to it and he's worried his wallet has been hacked. Leo says he can't have two IP addresses on an account. Leo says that the ISP may be at fault here and Mike should log into his Coinbase wallet and make a screenshot of the error messages. Then he should contact his ISP and show them the evidence. They need to fix it. Leo also says he should change his Coinbase password just in case. It's possible something nefarious is afoot.
George keeps hearing about BitCoin and how much the price keeps going up. What gives it that value? Leo says nothing but sheer belief. BitCoin is crypto currency, which are essentially digital dollars that don't exist outside of a computer. You can't really take it and spend it at the local store unless the store takes it. But even a dollar bill isn't really anything but a fiat currency that the government says it's worth. The value of a dollar, or any other currency, changes all the time. It's fluid. So BitCoin is just an extreme version of that.
Elia wants to know what Leo thinks about online currency, or crypto currency. Leo says to understand crypto currency, you have to understand how monetary systems work. Paper money represents the value it carries, but it isn't gold. It's called a "fiat currency." In the case of our dollar, it's backed by the government. But currencies don't have to be official government currency. "Disney Dollars" are currency at Disneyland.
Dale has invested in BitCoin, but he forgot his password. He requested it from CoinBase, but now Google Authenticator won't work. Coinbase's support is overwhelmed so he can't get in. So what can he do? Leo says that Bitcoin is rampant with fraud and that's why the Google Authenticator is used. But it may be that his account has been hacked. He may just have to be patient in contacting Coinbase to get them to reset it. But he shouldn't have an authenticator to reset a password.
With a current value of over $14,000 per, Bitcoin has skyrocketed in value in the last month, but has also dropped dramatically in the last few days. Leo says the Bitcoin craze reminds him of the Holland Tulip Craze of the 1600s, where tulips became all the rage, prompting people to even offer land for a single tulip bulb. Bitcoin is just like that.