What Is Cryptocurrency? – November 10 – Financial Literacy Q & a

November 10, 2020

Talking more about financial literacy month!

November is financial literacy month! I’m doing my part to help Canadians improve their financial literacy. Throughout the month I will be talking about many finance topics to help you build your financial literacy! Be sure to check out our Financial Literacy page to learn more about the topics we will cover in the month of November!

This week I’m talking with Ciara Hill, financial educator, to talk cryptocurrency and why it’s important!


Guest: Ciara Hill, financial educator and CEO of Hill Investment Partners


Don’t feel like watching? Find the full transcript below!

Why exactly is cryptocurrency?

Chris: [00:00:00] Today, I am joined by Ciara Hill to talk about digital currency. Now Ciara is joining us. She’s the founder of Hill Partners, a boutique company in Toronto that specializes in financial education. Ciara has a focus on alternative strategies and investments with a really, really keen interest in the emerging digital currency trends. Hello, Ciara. Thank you so much for taking the time today to talk to us.

Ciara: [00:00:31] Thank you so much, Chris. I’m very excited.

Chris: [00:00:33] Right on. Well, listen, Ciara, it is November Financial Literacy Month. One of the trends that I just can’t ignore this year is the emergence of Bitcoin and other digital currencies. I seem to pick up all these sound bytes constantly and it’s just not going away. So I thought it would be really great to have you join us.

I know you’re really keen on educating your circle and community about digital currency, so I’m really excited to have you join us to talk about it today. And I have a few questions. But before we get to those questions, I think we have to do a really quick disclosure to anybody viewing this, that this is strictly for education purposes Ciara nor myself or soliciting investments or making any financial recommendations, correct?

Ciara: [00:01:27] Absolutely.

[00:01:28] Very good, Kyra. All right.,So I think I want to ask you a really fundamental question. Let’s start from the beginning with what is digital currency and why is it so important? And while you talk, I’m going to pull up some slides that you shared with me so you can talk about those.

Why is digital currency so important?

Ciara: [00:01:48] Amazing. So there’s a lot of hype right now with the cryptocurrency, especially this year with the times. We’re seeing a lot more movement into the space by large institutional investors. So really, what is it? It is a digital currency that uses block chain technology. And essentially what it does is it’s just verifying financial transactions. Now it’s also decentralized. So that means that no private institution, government, or bank, controls it.

So great example is if I’m sending you money, Chris, like $100, I’m able to send it directly to you. I don’t need to go to the bank. I don’t have to have a third party involved. And it’s peer to peer, which is really great. So some of the benefits of that is it can take out the middleman. You can take out extra costs and also save time. Right.

Ciara: [00:02:41] And what I really love about this slide is it talks about cryptocurrency now being used as a medium of exchange. So we see here, we all are very present to money. And even if we think about a decade ago, a lot of us carried cash in our wallets. And now that’s really changed to being more of a digital transaction through a credit card, whether it’s tap or mobile wallet.

We really seeing this transaction shift to an online transaction and furthering that shift. Now, what we’re starting to see is more transactions happening in the digital currency space. So some examples that you’ll see here is Bitcoin, Like Coin and Ethereum, which are some of the really popular cryptocurrency is that are being used right here on this on this right hand side.

Chris: [00:03:38] The logos, I guess that’s the logo for Bitcoin, Likecoin. And this one is Ethereum , the triangle there. The little diamond.

Ciara: [00:03:45] Exactly.

Chris: [00:03:46] OK. Good.

What exactly is blockchain?

Ciara: [00:03:49] So in the next slide, we’ll really get into, like, explaining blockchain technology and that’s really the technology that fuels cryptocurrency.

Chris: [00:03:58] Ok, gotcha. Now, before we move to the to the question of blockchain, digital currency and cryptocurrency is one in the same thing.

Ciara: [00:04:10] Yes, you definitely want to think of it as one in the same where Krypto uses digital technology, which is blockchain technology to to work, and that’s really the engine. Now, you’ll see different types of currencies and digital currencies, which I’ll explain as we go.

Chris: [00:04:29] Ok, gotcha. So we got digital and crypto one in the same Bitcoin, for example, is a type of coin within that framework.

Ciara: [00:04:38] Exactly.

Chris: [00:04:39] OK, so let’s talk about blockchain.I think this is this is the most fascinating aspect of this, and I’m curious to learn more from you.

How does blockchain work?

Ciara: [00:04:50] Fantastic. So a lot of people have heard about blockchain technology. And when I first started getting into the space a few years ago, I just really couldn’t understand what it was. So that’s why I really love the diagram here. Essentially what it is, is it’s blocks of information. So if we think of spreadsheets, which we use rows and columns and we input data that way, a blockchain is really a collection of data.

Ciara: [00:05:18] So as we can see here, an example of Alice and Bob, they are transferring one hundred dollars. Alice is moving one hundred dollars to Bob. So that also shows on the block chain. As a transaction happened, though, really behind the scenes, what we’re seeing here is Alice would have her own online identity and she’s sending one hundred dollars. Now, how the block chain works is it says, OK, this is Alice’s identity and there’s one hundred dollars being transferred to Bob. Bob also has his own identity and it says, OK, doesn’t match and does the amount match and if it does, it forms on the blockchain as a block a block of information.

Ciara: [00:05:59] So what I really like about blockchain is it’s very secure and reliable than existing systems are really a great example of blockchain technology is bitcoin and thus far it has never been hacked. It’s immutable, meaning it can’t be hacked. It’s very secure. And what’s also great about it, again, as I mentioned before, it has minimum transaction fees because now I’m not having to wire transfer money through my bank, but I can actually do it directly to Bob in this example.

Blockchain is an independent third party

Chris: [00:06:33] Right. OK, so let me see if I can translate this. And because I think it’s really interesting, we don’t really think I’ve always kind of taken for granted that we work with a bank. We take for granted that a bank is where money is held and how transactions actually work. We never really think about them, but it’s really the bank that owns the ledger and creates that trust. So it’s really relying on that third party institution to create trust in a transaction. And what the block chain does is it kind of, I guess, Democratises takes the control away from a private third party institution and makes it part of its own ecosystem.

Ciara: [00:07:19] Absolutely, for sure, and it’s putting really the trust back in not only the technology, but in the people not having to rely on a third party.

Chris: [00:07:27] Right, right. So that’s very interesting. And I would imagine that block chain also is useful for things outside of cryptocurrency and digital currencies.

Ciara: [00:07:39] Exactly. It’s really being used by a lot of different companies. A great example is with covid. Obviously there’s such a demand for hand sanitizer and protective purchase equipment. So a lot of companies are moving their supply chain into the block chain realm, which means that now I can verify that I have X order from China to import PPE protective purchase equipment to my business, and I can verify that through using that technology. So it’s saving time. It is building more trust and it’s really helping to streamline logistics.

Verifying through technology

Chris: [00:08:16] Right. Right. I’ve even heard of examples and even in food spaces specifically and ethical types of foods where the blockchain is being used to control to the level of. So you buy you purchased meat at your local butcher with the information on the blockchain. It’s able to specify where that meat actually came from. Is it organic? Was it ethically grown and treated and all this type of information attached to that type of purchase, which wasn’t possible before?

Ciara: [00:08:51] Exactly, which is great. So it’s again, equipping us with more information so we can make better consumer choices and again, really streamlining processes, which is so important in today’s times.

Chris: [00:09:04] Ok, so that that’s blockchain, So so far. We have digital currency, of which Bitcoin is one of the coins that relies on this block chain technology as kind of a security function around it. But for somebody like you and me and anybody watching this video, why is it important? Why should we care about digital currency?

Ciara: [00:09:29] Yes, for sure. So it’s really allowing people to have access to an alternative investment. Now, when we take more of an investment approach, typically what we’ve seen is greater demand to credit. So what’s really great about it is it’s allowing people to access credit, let’s say, in third world countries or in Africa, where it’s really hard to confirm identity or get a bank account or maybe there’s gender bias happening. We’re also really seeing is a huge demand in Africa to actually use the technology to farm, to conduct business and to really leverage that. So that’s that’s a really great one.

Giving people more control of their finances

We talked about transactions putting more control into the people, using a trust verification process, which isn’t the block chain. And it’s timely. We’re not counting on the bank to have their internal processes and hold codes. A really great example is a certified check that used to be certified and you could deposit that quite quickly. Now, what I’m finding is you’re seeing longer hold codes as banks work with one another to verify it even after you’ve had it certified.

So it’s really creating that timeliness in the process. And you can actually say, like, I want to pay a little bit more to have this fund sent in twenty four hours, or maybe I want to pay less and have it sent in three to five business days. So it’s really putting that timely emphasis back on you and you get to control it then let’s say be more susceptible to the banking rules and timelines. Yeah, that’s a really great one.

Chris: [00:11:16] Yeah, just a comment on that because I mean, anybody who’s watching this or the mortgage broker, we’re in real estate and we know that when you have to transfer large sums of money, there can be 5 day, 7 day whatever, 10 day holds on checks between institutions. That shows how little trust there is in the current system. So this pressure block chain and digital currency addresses that.

Blockchain is useful in many industries

Ciara: [00:11:43] Absolutely. For sure. And there’s a lot of interesting things that are happening with block chain technology and just how people can even pool money together to purchase real estate. So it really does open up a whole new world than some of the constraints of our current system. Right. Which is great. And then a part of that would be looking at that added confidentiality through how the block chain is structured. What’s really great is I love how you said the bank has their own ledger and they have their own recordkeeping of transactions watching that as well.

Ciara: [00:12:19] And they basically have it. So it’s never like Ciara has sent money to you, Chris, but it would be my unique I.D. that would be put on the ledger. So it really does add that extra confidentiality piece, if that’s what people are looking for, maybe in their personal or business needs. We talked about lower transaction fees and also can you can control that through the timeliness of it.

And it really opens up more for international trading where one Bitcoin in Canada is the same amount of one Bitcoin, let’s say, in Europe. So I’m not all sort of having to have these forex fees and transactions also implemented within the whole system. But I can actually say, OK, I’m needing to move funds to Europe and Bitcoin is as Bitcoin. So it’s a really great example of how international trade can be made easier. And then again, adaptive technology and individual ownership.

Cryptocurrency is a global currency

So it really allows people to be able to pivot in their business and personal needs. Again, through the examples that I’ve mentioned and with the security and the decentralization, it’s really allowing people to look at what is it that I’m working on in my life? Is it a real estate transaction? OK, here’s a really great system and technology that I can use to support me as I purchased my first house. And I think we’re still a ways away from really. Not being done in Canada, but I definitely moving closer to that.

Chris: [00:13:55] Right, right. Yeah. I mean, it’s interesting here in Canada, we take for granted stability in our system. But a place like Venezuela where there’s a lot of distrust in the government, a lot of gated cave fluctuation, I’ve read that there’s a very high reliance on cryptocurrency and Bitcoin to transact to live life on a daily basis because there’s so much instability in the local currency there. The Bolívar.

Ciara: [00:14:26] Absolutely. That’s a great example.

Chris: [00:14:29] Very good. So lots of benefits there. So I guess you mentioned something about investments and some people might view Bitcoin as an investment. It certainly made waves when it went from overall, what was it, a 10 year period from pennies for Bitcoin to whatever it got to as the highest price. $20,000 or $30,000. So some people think of it in terms of investment. I have a question about it. You have this slide here. And again, we’re not soliciting or giving investment advice, but let’s just have a conversation about that.

Is bitcoin an investment?

Ciara: [00:15:07] Yeah. Really Great I find a lot of people when you look at the staircase and I like to say like the staircase to investing, but a lot of that has to do with investing acumen in the knowledge someone has. So most people are very comfortable through how we’ve been taught, whether it’s through our parents or at school, around a savings account, and really making sure that you have cash on hand to support your day to day needs.

But then there are other investment opportunities that that arise. And I think some of the more common ones would be a juicier year bond and the others would also look like the mutual funds or like an index. Right. What I find is as people continue to learn more, they’re able to access new opportunities of cryptocurrency is one that we’re talking about today. And what’s interesting is that banks are actually moving into this already. They’re leveraging blockchain technology. They’re looking at how to create their own cryptocurrency because they really see that digital is the way of the future. I think covid has also highlighted that where a lot of stores now are saying, please don’t bring cash because we want the digital form of payment.

Ciara: [00:16:15] So I think we’re definitely on this natural evolution. And I think what I’m also seeing and experiencing within my network is more people are looking at other ways to invest and how to grow their wealth, maybe outside of the banks. What I find is always interesting is that they’re able to charge you a 20 percent rate of return every month on your credit card, but yet you never see that back, even on an annual basis from the bank. So more people are looking at how can I take control of my finances? How can I invest in something powerfully?

And what I’m seeing is, is cryptocurrency or other private investments. Maybe it’s a it’s a crypto index, which we’re starting to see. And ETFs, while symbol has to come up with their own crypto trading options for people, too. So it’s really looking at how else can people diversify and also look at different opportunities that allow them to have greater ROI rate of return on their investment.

Cryptocurrency is just one piece of your financial picture

Chris: [00:17:15] Right. So it’s not, you know, and without any investing, I mean, fundamentally, it’s about spreading risk. So it’s not that crypto is the end all and be all. We’re talking about it as being a piece to somebody’s financial picture. And their wealth is the way you’re viewing it,

Ciara: [00:17:35] For sure. And if we think of the 90s and the tech boom, I really like to link crypto as that, too. We’re starting to hear more and more. There’s more excitement of it. There’s more people entering into the space. The technology is being used more and more. So it’s a really exciting time for people to, one, get educated. But two, even just take a small percentage of your portfolio and and trade it, that’s that’s a really great option for for for people if they’re looking for something different. But really, we see a lot of trends. I love studying history like the booms and busts.

And how do we get educated on what’s worked in the past and really look at what are opportunities in the future do? That’s really my commitment to coming on and sharing today is is how do you just get yourself educated and what are some of the different things that you can look at to really empower yourself and or your family?

Chris: [00:18:27] Yeah. Thank you so much. Very well put in. And one of the comments that comes to mind is what what the Internet must have felt like in the late 80s and early 90s. You know, we didn’t I don’t think as a society we could have appreciated or understood how exactly it was going to change our lives. This is information online. I get it free. What was the purpose of it? Must have felt very strange. I think it’s it may be the way we feel about cryptocurrency as well as simply doesn’t make sense to me. Why is this important? We don’t really see the applications and I believe that those that are studying and really involved in crypto do believe that it will be the way of the future.

How to connect with Ciara

Chris: [00:19:15] And so I think this is an early planting the seed to have this type of dialogue. So I really appreciate your joining us with this conversation today. I think that we’ll leave it there because that’s a really good place to end the conversation. I was going to ask a little bit about how specifically to use cryptocurrency, but I think that’s a great spot to leave the conversation here. If somebody wants to talk to you a little bit more about this if they want to get more education around cryptocurrency, can you tell us a little bit more about how they can contact you?

Ciara: [00:19:57] Absolutely. I have a website, CiaraHill.com. So it’s C I A R A H I L L dot com. And from there I have different blog posts and information. And I’m also happy to have one on one chats with people to you just to see how people can get educated more and share different resources with them, actually.

Chris: [00:20:16] And I’ll be sure to flash somewhere on the screen here, all of your contact information. How best to get in touch with you. Thank you again so much for joining us. This is a difficult conversation. I hope we did it justice in planting the seed and educating some people around that digital currencies, cryptocurrency and bitcoin. So thank you so much again for joining us.

Ciara: [00:20:41] Thanks, Chris. It was really fun to hang out with you.

Chris: [00:20:45] So my name is Chris Molder. I’m with Tridac Mortgage, and I thank you for joining us today during Financial Literacy Month to learn more about cryptocurrency before now.

I’m dedicated to improving my client’s financial literacy and solving hard money problems. Get in touch with confidence. Book a call directly via my calendar below, or you can get in touch with me here.


Christopher Molder

Mortgage Broker

Christopher is a mortgage broker based in Toronto, Canada. And a son of a broker too. He’s a second generation mortgage broker. Following in his father’s steps he joined the family mortgage business straight out of university.