Luis Alvarez Talks Cryptocurrencies
Cryptocurrency has been around for years lurking in the background, with only the most tech-loving investors even daring to dip a toe in the digital money. Lately, crypto has been enjoying a bit of fame, with the most famous coin, Bitcoin reaching all-time highs, but even less serious cryptocurrency like Dogecoin has seen a big spike in interest. In a recent interview the CEO of Alvarez Technology Group, Luis Alvarez, broke down what exactly cryptocurrency is and the pros and cons of digital money.
What is Cryptocurrency?
Alvarez begins by likening Cryptocurrency to something PayPal, which allows you to pay digitally with no need for physical money but quickly differentiates that, unlike PayPal or a debit card, cryptocurrency is not backed by a government or banking system. Instead of having a central system where all the money is kept in one place, crypto is kept in wallets, and each individual owns the crypto in their wallet instead of a dollar bill which is basically a promissory note.
What’s it Worth?
The fact that a crypto is a form of money is not lost on Luis as he quickly delves into what it’s worth. He zeros in on the most popular coin to date, Bitcoin, and likens it to gold and other commodities, saying that it is only worth as much as someone thinks it’s worth. He gives the example that if you want to buy an ounce of gold for $2,000 and the guy across the street is willing to pay $2,100 for the same ounce, then gold is worth $2,100. In the same way, Bitcoin is only worth what someone is willing to pay for it — as Alvarez puts it, “Bitcoin is a very democratic form of cryptocurrency.”
What is Coinbase?
Luis explains the recent initial public offering of Coinbase and how it is changing the crypto game for those interested in crypto but don’t know where to start. He gives a quick synopsis of Coinbase as an exchange platform to buy and sell cryptocurrencies and makes a point to note that it is “pretty easy to use.” To drive the point home, he mentions how Coinbase’s IPO valued them at $85 Billion. He states that the valuation means that crypto is serious now and predicts that there will be more crypto exchange platforms that go public in the future.
A Transparent Exchange System
Luis does a wonderful job explaining how transparent the crypto system is for better or worse. His first example is that every transaction is available to the public, and even your wallet itself can be viewed. He explains, “If you say you have 100 Bitcoin, they know you have 100 Bitcoin, and if you sell one, everyone who wants to know can look it up and decide to know that information.” He reiterates the democratic nature of the exchanges and points out that this is why cryptocurrency is gaining steam because people don’t have to deal with banks and other institutions.
Is it Secure?
Perhaps the most interesting part of the interview is when Luis is questioned about the security of Bitcoin. He briefly grazes over the fact that it’s next to impossible to hack a crypto wallet and steal the currency, but he goes on to give an anecdote explaining that they are not completely safe. He tells the story of a man in San Francisco who has millions in Bitcoin that he can’t access because he can’t remember the password, and if you try the wrong password too many times, you are locked out of your wallet forever, so he is too afraid to try.
Is It Worth the Risk?
This interview covers so much about cryptocurrency in so little time, but Luis ends on a sobering note. He finishes by saying that, “If you want a steady investment, and you’re risk-averse, cryptocurrency is not for you.” To learn more about the brilliant mind of Luis Alvarez and everything going on with the Alvarez technology group, feel free to contact us with any questions you may have.