Cryptocurrency Basics with a Digital Assets Trader

The Play by Play – Cryptocurrency Basics with a Digital Assets Trader

Hosts: Jack McFarlane & Nick Schlemmer

Guest: Collin Kanyuck, Digital Asset Execution Service Analyst

This week on The Play by Play podcast, Jack McFarlane and Nick Schlemmer talked with Collin Kanyuck about cryptocurrency investing and trading and what you need to know to get started.

– What is cryptocurrency?

– Buying and mining cryptocurrencies

– Crypto investing strategies and avoiding emotional decision-making

– Crypto investment risks and potential future growth

– The potential to change the finance industry

Thank you for joining the show today!  Remember to subscribe wherever you get your podcasts!

Transcript follows:

Jack McFarlane 0:07
Hi, everyone, welcome to the HR Happy Hour Network. This is The Play by Play podcast hosted by myself, Jack McFarlane, and Nick Schlemmer. This is an episode that we have been looking forward to for a long time. We finally have the guest episode we were talking about and our upcoming that we’re hitting it hard with guests this year. And we are starting it off with a bang. Today’s guest currently works in the financial service industry as a digital assets trader. He’s a real estate investor. He has a bachelor’s in neuroscience and is currently working on his MBA and masters of finance. Please help us in welcoming back Collin Kanyuck.

Collin Kanyuck 0:45
Hey, everyone, how’s it going?

Nick Schlemmer 0:48
Well, Jack, what do you say? Let’s hop right into cryptocurrency. And we’re excited to have Collin on the show. And we’ll just get us started. So Collin, if you want to just jump right into pretty much the basics. What exactly is cryptocurrency? Kind of how does it work? Just kind of the basic info?

Collin Kanyuck 1:10
Yeah, I’d be happy to. So I think crypto, it can be kind of a scary thing for people new to the industry, especially for those who are a little bit older, because it is kind of an advanced technology that they’re not used to. And some people are afraid of change. And the truth is that cryptocurrency is change. And I see it bringing a lot of change to the finance industry and to the world and in a couple years. And so what is crypto? Well, to go a little deeper cryptography is kind of the art of codes or decrypting things and encrypting things. And so what that comes down to is something called the blockchain, which you might have heard of the blockchain is a shared immutable ledger. And a ledger is something that goes back to accounting where it keeps a record, it keeps track of information. So why is this blockchain so important? And crypto with you know, encoding things and kind of making those codes? Well, what it comes down to, is, nowadays with the internet, so many things are becoming digital. And so that is really what digital assets pride themselves in the ability to move things, trade things, make things online, and send them without intermediaries. So for example, I’ll give you a little example that might help explain it. Today, if we want to send money if I want to send money to Nick, I have to go to my bank. And I have to say, hey, take this money out of my account, move it to Nick, it takes time. Sometimes it costs money. And after rely on that bank that they’re not going to suddenly closed down, as that has happened in the past even with, you know the FDIC insuring some of our money a bank and closed down and you can lose some money, which is unfortunate.

Collin Kanyuck 2:53
So what cryptocurrency helps to solve and especially Bitcoin, which is the largest and the one that a lot of people look to, it helps us to have a source of currency that we can trade. And we can do so without a third party. And so an example of this say that we’re in the park together, Jack and I are in the park and I have one orange. And I’m going to give that orange to Jack Welch. When we’re physically together, it’s easy to see that I had one orange, I gave it to Jack. Now I don’t have an orange that he does. And we have proof of that because there’s a physical orange. But say I just have a digital orange or a picture of an orange. It’s very difficult to keep track of things when they’re online and when they’re digital. Because what if I copy that picture of an orange and then I have three and I send them out to different people? How can you keep track of that original orange and make sure that I’m not giving it out to multiple people or creating new ones when I shouldn’t be? That is why crypto. And this blockchain or digital ledger is so important. Because it keeps track of those digital things like a digital orange to make sure that I’m not copying my orange and making fake ones and sending it out to all types of different people. And so if we go a little deeper into that, what’s really happening here is that obviously we could have one person keep track of that digital ledger, but then we run into the same problem where that person is suddenly like a bank. If they want to, they can go into that ledger and they can falsify things they can market themselves having 100 oranges, and then we have run into that exact same problem of having a middleman or a centralized institution.

Collin Kanyuck 4:28
Bitcoin is decentralized, which as we’ve mentioned, means that there is no one person in charge of it. There is no company over Bitcoin and in fact, the history of Bitcoin the lore behind it is really intriguing because there was something called the Bitcoin white pages that came out there was a man with a most people think is a fake name, Satoshi Nakamoto and he came up with these Bitcoin white pages the whole idea for Bitcoin but no one knows who it is, and then Bitcoin came about and so This point is decentralized. Which means when you hear somebody mining Bitcoin, each person that is mining it that is coming up with new coin, they’re basically keeping track of updating that ledger that’s keeping track of, okay, well, I sent one bitcoin to this person, and then they sent it to this person. And each person that is mining Bitcoin on their own separate computer is keeping a ledger or keeping a record of where that Bitcoin is moving. And when it’s changing hands, that way, nobody can just copy it or they have more Bitcoin than they do. And so that kind of is a big way of saying that’s why that’s why it is so amazing of technology because we don’t have to trust that middleman. And if I want to, I could send Jack one bitcoin right now without anyone in the middle. And all of those different computers, all of those miners are going to keep track of that switching hands. That way, I can’t falsify it or telephone story. So hopefully, that gives you a little description of crypto.

Jack McFarlane 5:56
Yeah, that’s fantastic. And hey, you know, be my guest. If you want to send one bitcoin to Bitcoin SV, I will gladly accept any bitcoin donations that you might have to give. But now that we kind of have a little bit of the basics, where and how would you go about buying or mining to get these cryptocurrencies?

Collin Kanyuck 6:17
Today, it’s easier than ever to to buy crypto, I will say and so of course, there are many different platforms from Coinbase, binance, Kraken, Gemini, a lot of those are the larger names where you can go and you can make an account, you can transfer money in and you can buy crypto, whether that’s Bitcoin, Ethereum, or one of the other many alt coins is what people call them, which really just means it’s a type of cryptocurrency, but it’s not one of the bigger ones like like Bitcoin. And altcoin is a smaller one. It’s got some backing, it’s got a reason behind it. But like I said, it’s not Bitcoin, but you can potentially buy it on an exchange like Coinbase. And so that’s one way to do it. There are also platforms like weeble, like Robin Hood, where they allow you to both buy stocks on the stock market, you can also buy several types of crypto like Bitcoin. Nowadays, with the recent passing of the Bitcoin ETF, you can even go to different institutions that have a Bitcoin ETF, and you can purchase their ETF, which means you can buy in on the potential gains a Bitcoin without personally holding Bitcoin. And so that allows you to go and buy it, rather than you know, getting a crypto exchange, you can actually buy it on an exchange, and then own a portion of that return of Bitcoin without feeling like you’re solely responsible for holding this Bitcoin and being responsible for it. So really, there are a lot of different ways that you can buy it. Mining, it is a bit more difficult. Especially nowadays, when so many people are mining it, you have to have really, really powerful computer or computers to even be able to mine it, it takes a lot of power, you need to have a lot of cooling as well, because systems are likely to overheat when you are generating so much power. And so that’s something a bit more complex, but certainly something you can learn about online if you’re interested in mining.

Nick Schlemmer 8:11
Yeah, no, that’s great. And and you mentioned about kind of how it goes buying it. But once you have it, I know that there are some options to where you can actually use that as a currency to purchase something else, per se. And an interesting fact that I found was that over 15,000 companies throughout the US allow you to use Bitcoin to purchase something. And is that something that you think we’ll see, kind of more often hear in the future like Bitcoin being used as like a debit or credit card or something of that nature? Or what do you think about that?

Collin Kanyuck 8:43
I think it definitely has potential and it is exciting to see so many different places starting to accept crypto, I know there are even places where you can get your paycheck from work and cryptocurrency or you can even take some of the platforms and immediately converted over to cryptocurrency and use them as like where you can receive your paycheck. My concern with that is at this time, cryptocurrency is very volatile, which means you know last week Bitcoin dropped down into the 60,000. Yesterday it was back up to 70,000. So the price is constantly moving. So certainly there are cryptocurrencies you can use, I’d say it’s generally easier. We could see like stable coins which hold their value, be a source where we could go out and we could you know, be trading the currency for goods and services and things like that. But the problem with with doing it directly with Bitcoin is that price volatility where you Bitcoin might be worth a lot more tomorrow and it’s hard to say if it’s actually a worthwhile trade when the price does move so much. Another problem is some cryptocurrencies are a lot faster and cheaper to trade and move than others. So some of them like if they’re in for example, can sometimes be seen as a little more costly and slow. Lower to trade and move. Whereas things like Solana seem to be better on that front where you can move and trade them faster. And so I’d say, as crypto continues to mature, I think there will be cryptocurrencies that come over to as the ones that are utilized as payment sources, because they’ll be fast, and they’ll be cheap to send. And so certainly, that can be an option right now. But like I mentioned, until the price volatility slows down, and we see Bitcoin maintain more of a certain price, it is difficult to see it being used too much as that form of of trade and currency.

Nick Schlemmer 10:35
Yeah, just kind of seems like a lot of risk. Yeah, go ahead.

Collin Kanyuck 10:37
Right, exactly. And I think if most people can avoid that risk, they will, at least for the time being, I mean, Bitcoin is still so young, I think 2009 was the year when it came about. And so as it continues to grow, and we see the market, the market cap grow, that volatility should decrease is what people expect.

Jack McFarlane 10:57
Yeah, that’s very interesting to think about. And as you mentioned, it’s very, you know, fluctuates a lot in price day to day even hour to hour, even sometimes I’m watching. It can go crazy Sundays. So when do you think or maybe what do you look for? Maybe don’t have to tell us all your secrets. But what are you look for when buying into a coin? Or when you’re going to sell? Do you have like, if it gets to this price I’m selling no matter what, or if it drops on here, I’m buying no matter what, what are your thoughts on that?

Collin Kanyuck 11:26
Yeah, that’s an excellent question. I think the first thing that I always share, of course, not financial advice, but my personal philosophy is to never invest more than I can afford to lose. That’s because as I mentioned, Bitcoin is still very new. There are a lot of other cryptocurrencies that are even newer and more speculative. That means you could invest in an altcoin. And there’s no guarantee that it’s still going to be around tomorrow. Obviously, I have a lot more faith in Bitcoin itself, it is very large, it has trillions of dollars in it. And a lot of people see its use case. And so I personally see Bitcoin being around, but when you invest in cryptocurrencies, make sure you use caution and always do your research. This is really a great question. Because any time you’re investing in something like this, a lot of people see the cryptocurrency space as like the early internet days, the early.com. Boom. And so that, you know, in that case, there are certainly going to be Kryptos that are not going to be around for the long term. That does that mean you can invest in them? No. But that means that you need to have a plan. One reason I personally like investing in crypto is because I can get such incredible returns. I mean, I could go in and put all my money in the s&p 500. And I could hope for an eight to 10% Return on yearly average. But the truth is that I can find cryptocurrency projects, and in a week in a month, I can double my money, which is something that’s kind of crazy to even imagine, as I mentioned, you have to use caution, because not every crypto is going to double or even go up in price. But if you have that knowledge do you do your research, you can find projects that you love, and you see a use case for. And so I’d recommend using resources, like Investopedia is a good place where you can find a lot of information on different cryptocurrencies. There are a lot of people on YouTube and social media that will share information, but you certainly have to be careful because some people are paid to promote cryptocurrencies, for example.

Collin Kanyuck 13:23
And so you definitely have to do your research and try to be as unbiased as possible when you listen to people give information, especially about the smaller crypto projects. And then what it really comes down to if you find a crypto project, you really like it, you say, Okay, I’m gonna invest in this, as you were saying, Jack, it’s important to establish what is your end goal? You know, first off, when am I going to buy something I kind of look for that I that I hear a lot, you know, when the markets are especially growing and everyone is buying is that’s usually the more of the time to look at selling. And when the market is very red, you’ve seen it going down, and everyone’s afraid, everyone’s afraid. And they’re saying, Oh, I this could go to zero and selling. And you see it really pull back. That’s when I usually look to buy. And usually, I mean, a lot of people do lose money in the market. And that’s why most of the time, you want to do the opposite of what the normal trader is doing, because they don’t really know what they’re doing. And so when they’re selling may be a good time to think about buying because it’s the red X’s are down. And when it’s very great, and everyone is following in and they’re buying just because they see everyone else buying, that’s often a good time to start taking profits off the table and sell out. But specifically for me, what I do to make sure that you know, I don’t put too much emotion into my trades, because when when it comes to money when it comes to investing, you really have to take your emotion out of it. Because it’s very easy to get caught up in well, I could have made more money or oh, I’m down and I feel like I need to sell. What you need to do is beforehand you need to say okay, I feel good about this project. I’ve researched it. I like the founders, I like the progress that they’re making and maybe there’s some venture capitalists Investing in this are these people that are really big are investing in it, it’s got their attention, I’m going to put some money in. Once you put money in, you need to establish, okay, at this point, I’m going to get out whether that’s I want to hold it for one year, and then sell it no matter what the price is, I’m going to hold it until this price because I’ve done some analysis, and I think it could get to this price, I think go from $1 to $2 a coin. And once it’s $2, I’m going to sell out, even though it could potentially go higher, that is my price, I’m going to take that money, and then I could put it in something else. So it’s really important that you establish beforehand, this is the point where I’m going to sell out because if you don’t, you could say well, I’m just gonna keep writing it because I think it could go higher. And then as we saw with the past couple of years, very quickly, the prices can go down, we can certainly see a situation where prices drop. And then suddenly, you had that chance to take all those profits, and now you’re negative on the coin. Now you either have to hold it or sell it at a loss. So it’s very easy to become greedy. And you need to make sure that you establish beforehand that this is my plan. And I’m going to stick to it all emotions aside.

Nick Schlemmer 16:06
Yeah, no, that’s great. And I want to hit on a point where we’re talking about all these different transactions of people buying people selling being in the red being in the green. But I wanted to have a statistic here on Aetherium. And it says that there’s over 1.1 million transactions for Aetherium per day, which is statistically higher than Bitcoin. So my question is, with all these transactions, how much does that really fluctuate like the market value of that coin?

Collin Kanyuck 16:41
Yeah, it can be substantial. I know Jack mentioned before he’s watched it an hour by hour, it can change. I’ve seen it where minute by minute, it can drop or jump in incredible amount. And that’s because, you know, there’s so many different investors in these Kryptos. Some of them are, you know, just retail like, like you and me, but there are institutions like hedge funds, and bigger companies like that, that will suddenly just buy millions, millions of dollars worth of that coin, and that can really make the price jump or drop. And so just day by day, we’ve seen coins like Aetherium, jump or drop 10 20% or more, which is incredible. I mean, you could have bought the coin in the morning, and then you could suddenly be up 20% on your investment just in one day, which is hard to imagine. That is why it’s the risk reward that it comes down to, you know, it is so high risk, you could lose a lot of money, but you could also gain a lot of money. And that’s why I really like it. Because like I said, if you do your research, you can make a lot of money in crypto, and it’s exciting. Especially when you’re younger, you’re starting to, you know, just just grow your wealth. I think when you’re younger you have, there’s there’s a lot less to lose. But there’s there’s a lot of I guess what I should say there’s a lot more to lose if you don’t take those risks. Because right now, I can easily make another $1,000. But if I can turn $2,000 into $10,000 through cryptocurrency that could benefit me so much in the future. And why wouldn’t I take that opportunity? If I believe in a coin? And I see its its use case in the future? And so I think if you’re young definitely do research on it, because there’s so much opportunity in crypto.

Jack McFarlane 18:15
Yeah, that’s perfect. I totally agree. And you know, this whole episode we’ve been, no crypto is very futuristic, if you want to think of it like that product or service. And for one last question, we kind of want to get your personal thoughts on where you think the future of crypto as a whole might go?

Collin Kanyuck 18:34
I’d love to share that. Of course, I do a lot of research, I read from a lot of you know, more financial experts who do a lot of analysis and they try to figure out where could Bitcoin and crypto realistically go? And what I’d like to share to kind of back this up is the economics of money in Bitcoin. And so what economics comes down to I know a lot of people hate economics, but just based off of what is money and what is what makes a good money. For example, we’ll look at three we’ll look at Bitcoin, gold, and the US dollar, or each have, you know, been used as a currency in some form. And so what makes each one a good form of money and why might one be better than another? Well, first we’ll look at gold. I mean, the things that make a good form of money is is it durable? Is it portable? Is it fungible it, can you verify it? Is it divisible? Scarce does it have an established history? And is it sensor resistant? And so looking at that, obviously gold, which you know, has been used as money in the past, is it durable? Yes, gold is very durable. But what makes it so bad as money is that it is not portable. I mean, imagine carrying around a pocket full of gold. It’s so heavy, it’s going to be so hard to trade and you can see that so many people are already moving away from physical money, because it is so difficult Another one is verifiable, you can make fake gold. And most people cannot tell the difference between real gold and fake gold. And that makes it so difficult to use it divisible, you can’t really just split up a gold bar easily you can make gold coins, but you still run into that problem. And sensor resistant, you know, you can have a government come in and say, This is how much gold is worth. Or now it’s no longer worth that which we’ve seen in the past, if you look through economics, the government has very much controlled the price of gold and changed it and said what it’s worth compared to the dollar. And that’s a problem.

Collin Kanyuck 20:29
So now the US dollar that we use today, obviously, it’s not very durable, because physical physical dollars are very easy to get wet to lose to break. Portable, it, it’s somewhat portable, the dollar itself, you can put in your pocket and carry around. And you can also use you know banks to transfer it. But once again, it’s kind of slow, it can be kind of costly to do, you can verify it but with the same thing with gold, you can certainly make fake dollars. And that’s a problem that we run into often is is that counterfeit money divisible, you can go down to cents, but ultimately, you still run into problems where, you know, you can only divide down that money so much and so small. And then if you want to make it really big, then you need so many dollars to do that. But I think one of the biggest problems, two of the biggest problems with the US dollar is that one, the scarcity. It is not scarce at all. I mean, we saw just with you know, during COVID-19. And everything that happened, the government can print as much money as they want. And so the US dollar is in no way scarce, which inflates the price and causes so many problems with goods and services. I know, everyone has seen how expensive it is just to go to the grocery store today. And that’s because the US dollar is not scarce, and censorship resistant, the government has complete control over the price of that dollar, they can print more, they can do whatever they want with it. And that’s a problem for us, because we have no control over it. And now bitcoin is often seem to be, you know, the better source of money, because it does check so many of these boxes, it is 100% portable, you can carry it around on your digital wallet, you can always verify it because of the block chain to make sure that you actually have it, it’s divisible, you can trade down to eight Satoshis, which is eight decimal points of Bitcoin, which is so much less than even one cent, that’s something you can easily do with it with a digital wallet, it’s very scarce because there will only ever be 21 billion Bitcoin and no more than that. And that makes it worth so much more. It gives it that resistance to inflation. And so looking at all of that with Bitcoin being superior to gold, and to the US dollar, a lot of people see that it could completely change the finance industry in the coming years, because it is a better source of money, you don’t have to trust a banker or middleman. And so a lot of people see that it could take over as money and a lot of the cryptocurrencies will grow, and they’ll have their use cases. Once again, it’s important to do your research on each one because some Kryptos will grow and there’ll be incredible opportunities for future technology and some of them will fail and will be worth nothing. But personally for Bitcoin at least I see Bitcoin being worth exceptionally more in the future. It’s a great investment, it’s really going to change the way that we look at money in the way that we do our transactions day to day. And I’m excited to see where it takes us in the future.

Nick Schlemmer 23:21
Very true. I think me and Jack, I think everybody else tuning into the show today learned a lot from you, Collin, so a huge thank you. Thank you for coming. Thank you for all the information.

Collin Kanyuck 23:31
Thank you for having me.

Jack McFarlane 23:32
Yeah, just to echo Nick. I know we’ve learned a ton and we are so appreciative that you would come on the show. It is always a blast having you on.

Collin Kanyuck 23:39
Yeah, thank you so much. It’s been a pleasure, Jack and Nick. I enjoyed it.

Nick Schlemmer 23:43
All right, everybody. It is now time for I know it’s my favorite part. I know Jack loves it too. But we have the quote of the show today. Now Jack, I think you’re gonna like this one a lot. It’s pretty simple, but it hits it. I feel like it hits so hard.

Jack McFarlane 23:57
So it was here.

Nick Schlemmer 23:58
I’m excited a lot about crypto. We talked a lot about the future. But I want to bring it back to focusing on today. Okay. Sometimes you are so focused on the future, that you don’t realize that you’re in the middle of what you want prayed for.

Jack McFarlane 24:16
Oh, okay. Oh, that’s good.

Nick Schlemmer 24:19
I liked that one quote right there.

Jack McFarlane 24:23
It hits close to his heart.

Nick Schlemmer 24:25
I like it a lot.

Jack McFarlane 24:27
Wow, that’s really good. You know, I’m gonna try to live today by that flow. Right. Right. That is a great quote. Do you have a speaker? Is that one by a specific speaker?

Nick Schlemmer 24:39
That one I couldn’t find so couldn’t give credit to anybody who said it.

Jack McFarlane 24:43
Whoever did it to us? Yeah, credit Nick Schlem with that quote right there.

Nick Schlemmer 24:50
I thought of that this morning.

Jack McFarlane 24:52
I just pulled that off from the old dome. During my deep philosophical, philosophical thinking right there.

Nick Schlemmer 24:59
Yep!

Jack McFarlane 25:02
No, that’s fantastic man. never disappoint with quotes. But I guess that’ll just about us for the episode today. Thank you so much for listening. We hope you guys had a blast and learned a lot like we said earlier. We certainly did. It’s always fantastic having Collin on the show, you know, hopefully in another I think it’s been exactly 10 episodes since he was first on so maybe in another time. We’ll have him back on. But thank you so much for the support. We really hope you guys enjoyed.

Nick Schlemmer 25:31
And just everything Jack said for me as well. Thank you for tuning in. Here’s to 22 episodes, and then let’s get ready for 23.

Jack McFarlane 25:41
Right.

Nick Schlemmer 25:43
Alrighty guys, thank you for listening. Bye for now.

Transcribed by https://otter.ai