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Bitcoin and Cryptocurrency

Today I want to talk to everybody about a pretty popular topic at the moment, which is bitcoin and cryptocurrency, something that my clients are asking me about on a daily basis. I certainly do not know everything about the subject, and I personally know that my knowledge is just the tip of the iceberg, I am still learning every single day. That goes for financial advice and for Crypto. I would be completely naïve to think I know everything.

And just as a kind of caveat to start the conversation, look, this is general advice. So, giving the general advice warning about the information in this article and what I’m currently talking about, is of general nature. It definitely doesn’t take into account specific needs or circumstances, and we cannot actually even provide advice in the area so just a huge warning before we get into this. It is not advice. It is merely my opinion, and a bit of education on what bitcoin and cryptocurrency is, please do not take this as advice. The asset is very volatile. And as I said, I do not have a license to advise on it. We cannot advise on it. This is my personal opinion!!!

So probably the easiest place to start when we talk about bitcoin and cryptocurrency is currency in general. And this kind of tracks back to the BC. We’re talking 600 to 650 BC where they started trading shells, cowrie shells, down to sort of iron or obsidian beads, lead ingots and things like that. Basically, it was currency that was used as a way of trade. So, if people didn’t have something they could trade, effectively currency took that form and allowed people to pay for services, transport and other things like that.

Actual coins as a commodity didn’t come along until till much later around 1450 AD. Once ‘money’ sort of came along and coins were minted. It soon became an instrument that could be taxed and have political control, it was used to fund armies and things like that. So that kind of gives you I guess, a little bit of an outline of currency.

One of the additions to that, that I want to briefly touch on is gold. So gold was used as a form of currency, gold bars, gold coins, and effectively as a store of value. So larger banking institutions used to hold gold as a store of value, and then were able to lend money or currency out against gold and that was how it was done for many years. Where I think we’ve kind of come undone a little bit is that there’s actually not enough gold backing currency at all anymore. Banks decided they were then able to lend against gold and effectively create money out of thin air. So, if we kind of draw that back to the federal reserve, the Fed actually now are able to create or print money, which is probably easier to understand. The fed now print money on a whim, whenever they like, and inject that into the economy. I don’t particularly see currency, or modern currency as a store of value because it can be printed at any time without control and the value can rise and fall, as we’ve seen with exchange rates and to a lesser extent, countries like Venezuela who have effectively ground their currency to nothing, it’s actually worthless now.

That gives you a little bit of a history of currency. Look, it’s not extensive, and it’s taken from bits and pieces that I’ve read and from other educational topics. One of the books that I’m referencing is called ‘The Bitcoin Standard’. It’s by Saifedean Amos and it is an excellent read. He clearly articulates what the history of currency is and why the need for Bitcoin without being overly in bitcoin’s corner either.

If we continue with that discussion, and we move on to Bitcoin, it’s probably easiest to discuss what Bitcoin is. Most of you would know by now that Bitcoin is a digital currency. It’s a decentralized system. If we talk about decentralized and centralized; centralized is the banks, decentralized is non-bank institutions, well not even institutions really, its non-bank, and, backed by the customer. Bitcoin is a peer-to-peer exchange.

Effectively, people are able to lend, buy and sell peer to peer as opposed to using an intermediary like a bank who is unable to control Bitcoin, which is the reason for it being called decentralized. The way that bitcoin is created is through miners. Bitcoin miners use computers, which run complex rigs that solve complicated puzzles. And once they’ve solved those puzzles, they group into a transaction or a block, those blocks are then added to the blockchain. And the miners are rewarded with a small number of Bitcoins for their effort.

There’s only a certain amount of supply of Bitcoin and at a certain point in time, it will run out. The benefit of that effectively means that it is a very good store of value, you cannot replicate it, people have tried, it is very hard to hack, because every single transaction is verified by everybody else. What I mean by that is if you could try to go in and make a different transaction or if you tried to hack something, everybody else on the network would have to verify that transaction to say that it was correct.

So, to be able to do that, you need to have a huge amount of computing power to actually have the majority of votes. I think a common misconception here is that it is unsafe. That’s simply not true, in my opinion, as I said, that’s just my opinion.


Effectively, the fact that you have to verify it against a heap, or the whole Bitcoin universe means that it’s very, very, very hard to disrupt that. Now, the ledger that the Bitcoins are added to is a trust less system. What I mean by trust less is as I said, everybody has to verify it. So, it’s very easy to defend against theft. Early on, there were some higher sort of profile cases around theft, and a lot of misconception around the fact that Bitcoin is used to fund crime and the black market. Bitcoin is the easiest currency in the world to trace. It has to be put on a ledger; everybody can see that ledger. So, the fact that it would be touted as a financing operation for criminals is wrong in my opinion, and a lot of people have actually been caught up in this and drug dealers have been caught by cops because it’s easily traceable.

How does Bitcoin work? Look, miners create the Bitcoin we’ve just touched on that. Bitcoin exchanges allow you to trade conventional currencies for Bitcoin so companies like Binance or CoinSpot, you can use your native currency so for us, it would be the Australian dollar, you can then exchange that for Bitcoin. And then you can put that into a wallet or a digital wallet. And then the cryptography secures the network ensuring that the balances and transactions are safe. So again, that’s that peer-to-peer network, and everybody kind of verifying every single transaction. Now I could go a bit deeper and talk about alternative coins and further than that and talk about non fungible tokens or NFT’s/decentralized finance. There’s also I guess, to a lesser extent, the metaverse and decentraland and staking, pools, tokens as well. From my point of view, this article was more just to enlighten people as I said, I cannot provide advice on it. This is not advice it is general in nature and simply my opinion. If you’re asking me what I do, I believe in Bitcoin, I think that it is going to do quite well. I invest personally in Bitcoin I use Binance and CoinSpot. This is merely my opinion and my opinion is that I see a grand future for it and have been investing personally. Hopefully that answers a few questions for people. If you have any further questions, please reach out. I don’t mind clients asking me questions, but I thought this might be a good way of giving a bit of education on the subject and putting that caveat in place to say look, I can’t advise on this guy’s… I’m sorry, but it’s not in our license and something that we simply cannot do at the moment. The information that I give you is only general in nature, and only my opinion and should not be acted upon. Hopefully in the future there might areas of crypto that we can advise on. Thanks for tuning in… If you have got a topic that you’d like me to share my thoughts on fill out the form below and I’ll give it a shot. Regards,


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CB Wealth Australian Pty Ltd T/As HH Wealth is a Corporate Authorised Representative (No. 1283595) of Axies Pty Ltd ABN 38 136 704 446 AFSL No 339 384. Chris Holme is an Authorised Representative (No. 1004793) of Axies Pty Ltd ABN 38 136 704 446 AFSL No 339384.

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