Crypto 101, With Ambre Soubiran
💸The world of cryptocurrency continues to grow in popularity. With Bitcoin regularly hitting the headlines, an increasing number of people are curious about investing in crypto. But what is it, what are its origins, and how does it work?
💪Ambre Soubiran is the CEO of Keiko - a crypto market data company. Having first read about Bitcoin back in 2013, Ambre was an early adopter and eventually left her banking career to pursue her passion for blockchain technology. Often cited as one of the most influential women in crypto, Ambre’s company Kaiko has just raised $24 million in Series A funding.
💥 Today on The Wallet:
1️⃣ Ambre explains what exactly blockchain is, how it works, and busts some common myths around investing in crypto.
2️⃣ Cryptocurrency has gained a lot of media interest, so we discuss how to ignore the hype to ensure you're investing for the long term, and what this technology means for the future of financial services.
3️⃣ With the rise of crypto frauds and scams, we look at how to protect ourselves from fake platforms, as well as the challenges digital currencies face in light of their sometimes negative spotlight.
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You can listen (47 min) and subscribe here:
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1. The crypto low down
“Having this blockchain technology should be considered an important innovation for how we’re going to evolve our financial services.”
A blockchain is a data structure that makes it possible to create a digital ledger of data and share it among a network of independent parties. There are many different types of blockchains. Blockchain ensures security, transparency, and decentralization.
When data is recorded in a blockchain, it’s extremely difficult to change or remove it.
Blockchain is the technology behind the cryptocurrency Bitcoin, but Bitcoin is not the only version of a blockchain distributed ledger system in the market. There are several other cryptocurrencies with their own blockchain.
In order to answer a question like, ‘what is the price of Bitcoin?’, Ambre says she’d look at the markets and look at the price at which the latest transactions were executed — which is called price discovery.
Bitcoin is limited to 21 million Bitcoins, and that number can’t be tampered with. Unlike the pound, Bitcoin is truly scarce.
Blockchain, as a technology itself, can be used by institutions to modernise and re-think the way their systems work. It offers a technology to help them do better, eg. central bank-issued digital currencies (CBDC’s).
Mining in the cryptocurrency industry is the process of building the blockchain – slowly adding data as users make transactions on the network. There is a big mining race that goes on all the time to win the right to add a new block to the blockchain. Volunteer miners compete with each other to solve complicated mathematical problems using high-performance computers.
If you look at any blockchain, you can know exactly how much energy was used in every single block. It is the first monetary system where you know how much energy it consumes. We don’t actually know how much the entire traditional financial systems actually consume, whereas we do know how much Bitcoin consumes — Ambre says it would be good to be able to have exact numbers to compare before focusing solely on Bitcoin criticism.
2. Tips on investing in crypto
The origins of Bitcoin are one reason why some people, especially the media, are quick to jump to its criticism: it was created as an alternative to the existing monetary and economic system and status quo in general, with the aim of letting people transfer money in a decentralised, censorship-resistant way. This challenge could be one reason why some traditional institutions are still not huge fans of crypto.
One Bitcoin is around £25k, but you don’t have to buy an entire Bitcoin — you can literally invest £50 if you want.
Ambre personally has a 50/50 portfolio of Bitcoin and Ethereum, for two reasons: Bitcoin has a simple, digital gold narrative. The Ethereum narrative is different because it’s like you’re investing in the internet (in a way).
As soon as you have the asset — also known as skin in the game — you’re going to pay more attention and learn more. So start small, and start learning more!
You can buy crypto on platforms like Coinbase, Kraken and Binance.
3. Protecting yourself against scams
One way to invest in crypto is through synthetic exposure. For example, you can buy crypto on Revolut directly within the app. This is the safest and easiest way to buy crypto — however, you don’t own your crypto in the blockchain sense. When you own your crypto, it means that you have a private password that is yours and that enables you to interact directly with the blockchain.
If you want to own your crypto directly, the best way to do it is to purchase a ledger hardware wallet. Here, when you set up your ledger, it’s going to give you a list of 24 words, which essentially is the password that enables you to own your crypto. You have to store your Bitcoin securely on a private key.
People get hacked within the crypto world because they’re sometimes lured into giving away their passwords or private keys, so if you’re investing in crypto, you need to rely on yourself — there’s no central authority that you can complain to.
* Please note that we are not certified financial advisers! The articles and information made available on Vestpod and this podcast are provided for information and educational purposes only and do not constitute financial advice. You are advised to consult with an independent financial advisor for advice on your specific circumstances. Also, if you’re investing money, make sure it’s for the long term and you understand what you're investing in.*
RESOURCES:
You can follow and connect with Ambre at:
Kaiko: https://www.kaiko.com
Twitter @ambresoub
We shared some resources in this episode, all the links are below: