The App Store: Using Technology to Better Manage Your Finances

so my name is Tom Katovsich as just Chelsea mentioned I work for the Virginia credit union which we’re the state of Virginia’s credit union we also partner with all state colleges and universities so all of these students here are actually eligible to be members with us we’re like most credit unions and some financial information institutions now we’re very passionate about financial literacy and education and helping people make good financial decisions this is actually a unique experience for me today doing what one about financial technology because normally I’m up here talking about no you should save your money and not spend your money on this and try to you know build the emergency savings and all these things you should do financially well oftentimes I don’t really get to talk much about the tools that are associated with doing doing those things so there’s a whole hugely massive industry called financial technology or fin tech that is just like exploding out of Silicon Valley and so we’re going to kind of walk through a few different types of financial technologies that are available as well as companies or organizations that actually offer those products disclaimer myself and the Virginia credit union do not endorse any of these companies or the products we are going to talk a little bit about some things that those banks and financial institutions do internally that you don’t need to use some kind of external service and we’re even actually going to talk a little bit about crypto currencies because that is a form of financial technology so again we have 45 minutes to talk we’re going to cover a lot so it’s going to be very very high-level on your way in you should have picked up some handouts and I printed out two articles that I really liked in doing some research about like best apps from these different resources now I get a lot of information from nerd wallet I don’t know if y’all have ever looked at nerd wallet they like basically do like credit card ratings and rankings and stuff like that I like a lot of their content it’s usually very well researched and and well reviewed so I use a lot of their stuff so you’ll see it we’ll mention a bunch of these things as we go through herer this is gonna be our agenda today we’re going to talk about some primary financial technologies that everyone’s already very accustomed to and a little bit of kind of the evolution of how these things came about and then we’re going to move into some more advanced things such as like budgeting tools and apps as well as artificial intelligence robot advising and then again a little bit about cryptocurrency and blockchain which is fairly sophisticated but we’re going to kind of break down like how it works and some advantages and disadvantages to using Bitcoin and all that kind of stuff so as we go through if you guys have any questions feel free to ask I may or may not know the answer another little disclaimer is I’m not the most technologically savvy person I don’t use any of these resources myself I have done quite a bit of research on them I like to do things the old-fashioned way a couple reasons one I have a banking background and finance background so I understand it and two second reason is a lot of these resources came about for purposes of convenience and there are fees and things associated with them I don’t like paying money for stuff I don’t need to use like if it’s a convenience fee like I would prefer to actually just do it myself in most cases and I’m very concerned about my privacy like I don’t like putting my my financial information in too many different places that are out of my control of you know so a lot of these are third-party apps where they do ask for access to your actual financial information so that’s where I get a little bit iffy personally but then again that’s a personal choice a lot of these companies all of these companies were going to be talking about this is how they make their money and so Security is that the absolute utmost top priority for all of them I can assure you that but again it’s a personal preference all right so kind of going back to the beginning which everybody in here certainly is young enough to not even remember a time where there wasn’t online banking this was the original developed in the 80s when the internet kind of started to come around really kind of took off in the 2000s and allowed banking customers to move from branches so as soon as banks

started to realize that they were having to pay less customers and less bankers they started dumping absolutely just dumping resources into enhancing these technologies making it better faster safer so a lot of stuff that you used to have to do in a branch like transfer money from one account to another or you’d have to wait till you actually got your bank statement in the mail to se what your account balance was if you weren’t tracking it carefully online banking allows you to do a lot of those things just from a desktop computer or now from your phone but we’re going to talk about mobile banking here in a second again standard stuff so I’m not going to spend too much time on it what I will tell you is that like starting in the early 2000 to the advent of online banking a lot of people became very lazy with tracking and managing their finances like if anybody remembers their grandparents or parents even having a checkbook register logging all their transactions reconciling their balance or their statement when they got it in the mail spending that time with your money I think is probably one of the most valuable things you can do to improve your financial health and achieve goals because you’re very connected to it you’re actually like able to see it and you’re kind of forced to monitor it on your head so that just kind of gives you that a little bit of extra incentive to track things a little bit more carefully checks are basically no longer even thing we’re going to talk about that when we get to make payments and stuff like that so around the same time maybe a little bit earlier stuff like the debit card started to come along and credit cards became more widely used and that kind of falls under the technology advancement of like forms of payment now kind of as we progress through using debit cards and credit cards we have the chip technology which is allowed for actual card use to be much safer and we’re going to talk a little bit more about just direct digital payments in terms of like peer-to-peer payments as well as other ways to like pay different vendors and organizations and things like that every advancement that’s come along there has been an additional cost associated with it but most merchants and things like that just include that in the cost of the product or service right so like here’s a good example like a credit card credit card company charges a fee any time the credit card is swiped and they charge the merchants whatever you know so I don’t know if you were aware this if anybody’s tried this and I know some people try to do this to maximize their benefits and their points on their credit card if you try to pay your tuition here at Virginia Commonwealth University with a credit card they transfer that fee directly to you and you have to pay it an additional 3% of your tuition if you pay with a credit card I don’t know if anyone was aware of that if you’ve ever been into a like a gas station or convenience store they say we do not accept credit card transactions under five dollars that’s because there’s a fee associated with it they don’t want to have to pay the fee all right the chip technology though is fantastic we should have been using that years ago that has to do with like identity theft we’re not going to get into that too much okay so then fast-forward of 2007 iPhone comes along now everything is going on to mobile massive advancements in online banking have been like the major advancement banking when it comes to mobile is mobile optimization where there’s an app associated with pretty much any financial institution to make you business with including investment organizations like the principle or fidelity or whomever DIA whatever it is each trade all this cuts of places there’s also mobile web where basically they’re coming in through your web browser and most organizations are trying to optimize just sort of basically it looks nice a lot of times the features are going to be very similar but sometimes there are things that you can do online that you can’t do through mobile banking that are sometimes the things that you can do to mobile debt which you can to online primarily the major most awesome advancement has been personal remote deposit capture so being able to take a picture of a check and it’s meant to automatically deposit in your account now there’s risk associated with that for the financial institution side so usually there’s going to be limits on that but if you get it eight ten fifteen thousand dollar check they’re not gonna let you just deposited through your cell phone you have to come into a branch and usually there’s holes and things like that also a lot of times financial institutions do kind of adhere to a similar policy that they may have through their ATM deposits where you’re instantly giving credit for a certain amount and then the remaining amount clears overnight it’s really part of the way that payments work is really kind of antiquated technology like in the way of our instant incident munication society you would think that it would be easy to just send money from one person to another but because of the way that our

legacy financial institutions and the Federal Reserve System is set up and being able to having to verify account transfers and things like that it takes a long time for money to actually be moved one account to another like it but physically it takes a long time for all of the people to clear those transactions Oh like trillions of dollars are moved throughout our global economy on our day-to-day daily basis so it’s a kind of a lot of volume and there’s a lot of legacy institutions that make a boatload of money off of that system of staying set so that’s one of the things that Bach chain and Bitcoin and stuff like that is going to attempt to change but we’ll see if it actually has any traction okay so these are the things that we’re all already familiar with and how I can guarantee everyone in here if you have a bank account you already use this it’s kind of commonplace now this is now the ball this used to be an add-on feature the banks would offer now this is the ball firm you have to have at least this these features before anybody even consider you like a lot of smaller credit unions and small community banks may not have the resources to build out these kind of robust technologies but if they don’t they’re not going to have any customers so this is the this is the level to compete so quite a few dinners back PayPal obviously we’re all familiar with PayPal was kind of a leader in this peer-to-peer digital payment technology there are multiple different business models and they’re multiple different ways that these kind of companies or organizations process their transactions or ways you are able to utilize their service and their different fee structures that are involved in each other okay so peer-to-peer here allows you to send money obviously as as it sounds directly from meaning right PayPal was the original there is a couple different ways that you can link or associate your money to PayPal you can actually set up to where automatically out of your account you can prepay app refund PayPal or you can link it to a credit card different ways that you choose to do that will have different be start renews the newer technologies Venmo and Zelle are kind of similar offshoots of that and that they’ve made it even easier and more simple to connect peer-to-peer now with again with some of these like I was in my research that kind of figured out how some of these places were today when using services and if you say in this which one’s the other use minutes sooner raise your hand if you use a powder and they found anybody here use them out a lot of those depend anybody has cell so Venmo and Zelle are almost identical in function the primary difference is venmo you are not required to like your you don’t have to have a bank account that’s associated with it Zelle is a company and they kind of came around fairly recently that mimics what Venmo already does which is like instant peer-to-peer transfer of funds but they actually have a really smart business model they went directly to the banks and you have to have a bank account that is with Zelle heard is more beneficial for you to have a bank account that’s with Zelle and they’ve got most of the primary financial institutions and so if your bank uses Zelle and my bank uses Zelle and I’m gonna transfer you money it happens instantly okay yes no that’s a little bit different we’re going to talk about that in exercise that’s like the form of additional law kind of again all of these safety is an interesting thing either I can’t I can’t speak to that I mean I when you when you transact through your financial institutions app or system directly they have certain levels of insurance and fraud protection and things like that that some of the third party organizations have may not now in terms of like safety they have an addictive like they have like Bank of America has like decades of online safety and massive amounts more resources than a company like venmo even though Venmo is actually a subsidiary PayPal but Bank America has been around forever and so they worked on their security and safety for a long time now for for trading fraudulent transactions like I was I was actually in my research noticed that they mentioned something that anytime you send money crews out or through Zelle or Venmo if you do not know the person and it’s a

transaction done fraudulently you are held liable for that so it’s not like if you use your debit card and like some on the other hand is fraudulent like you actually reliable for sending that one so that’s like a complete lawsuit which that’s one of the dangers of using that service but the the purpose of it is designed for like stuff like split checks are doing like small dollar transactions back and forth sale is only run naturally here like you only use it within the United States I think Venmo is too PayPal you can do internationally there’s another one called Zoom that you can do internationally it starts with a pass but primarily like with all of these the fee structures definitely vary so like the it’s actually no cost to transact money between with Venmo like between two people but when the money gets deposited into then mode to get it out there’s a fee but down the drains transfer the money back to your bank account there’s a 25 cent fee and then they’re actually November 6 of this year like coming up this week next week they’re going to be switching their their fee model to it’s going to be one percent of the total transaction coming out of your account back into your bank account I have been the back of your bank so again you gotta watch out if you’re paying for the convenience so remember that you’re paying for the convenience so it’s very important for you to pay attention to the fee structure now if digital wallets are a little bit different this actually stores information for credit cards and debit cards that you currently utilize it makes online shopping substantially easier or streamlined because if you have a fax or whatever the one for visas then basically all it does is preloaded all of your card information because I checked out here like yes and they’re good now with stuff like Apple pay and Samsung pay and Android pay there’s a different form that actually actually uses your cell phone so it is a way that you can connect on like online to these retailers and merchants and stuff like that pay online but it also has an additional feature using the RFID capability from your cell phone to where you can like just tap and pay at different merchants and now all of the new card readers have that capability okay now in terms of like safety for this allegedly it’s more safe than using the old kind of debit card so maybe I will talk a little bit about the cards okay so you get this card right here’s my credit union debit card okay so and for those of you they came to my identity that class me I think we went over this here too so on the back of your debit card that’s the magnetic strip this is the most dangerous form of payment because it’s your card numbers imprinted magnetically on this strip here when you swipe your card your card number gets transmitted from door card to their card reader and that information is stored until the transaction clears and it’s your actual card number now with the chip when you put it in the chip a randomly generated number associated with your card is created for a one-time use for that pain so like the transaction information is captured and then overnight when all the transactions through the number associated with your card and hit your bank account and that’s when the transaction is fully process does that make sense follow me with that okay now with Apple pay and Samsung pay and Android pay with the RFID he uses a similar unique generating code capability now I don’t know how good like RFID readers are for like criminals or something like that or they you know you probably seem like somebody kind of like brush by you and capture information like digitally I don’t know about like safety when it comes to that I’ve never used either any of these services so I can’t speak to safety ease and use any of that kind of stuff I don’t know why I just I I don’t know I like using my car preference right and when I go online to buy stuff I never store my information on any of their websites I don’t use master pass or any that stuff they claim it’s more secure I just you know they everyday is they say a lot of stuff so I know what I feel comfortable with one of the benefits though additional benefit beyond beyond storing all of your personal information is you can also store like your loyalty card so like if you go to Kroger and here at Kroger value customer or whatever it automatically recognizes that we’re just kind of cool okay so this is where things have kind of a grassy now where a lot of people are interested in these kinds of things like budgeting tools and money management tools there’s a lot of different models a lot of different

forms a lot of different companies out there that do these things the most common and the most the one that most people always cite as being the best of them whatever is Has anyone ever heard of Mint? anyone ever used Mint or actively use Mint is a budgeting and money management tool it’s kind of like very very basic financial planning software but really not it allows you to connect multiple different bank accounts to one central website where you can log on it stores your information and every time you log on it will refresh and allows you to help track your spending and categorize your spending create budgets and all this kind of stuff okay if anybody has ever taken any amount of in davinia by other classes I can’t tell you how valuable that information is collecting and gathering information and data is critical for making decisions about the future which that’s all money management is that’s all financial planning is like what am i doing today and how is that going to impact my financial situation tomorrow right nobody in here one that mega million or a Powerball right no so you have to think about what you’re doing now to impact mark that’s all this is having a budget using these tools does not force you to make better decisions it should help guide you to make better decisions like if you you don’t know if you’re spending too much money at Starbucks unless you see that you’re spending too much money at Starbucks but that’s kind of the long and short way right so a lot of times your financial institution actually has a feature like this embedded in their online banking at Virginia credit union we offer money tracker feature only once in the last three months and it allows you to have a job over the last three months what your spending is on different categories I know Wells Fargo has a fairly robust version of that some of them do allow you to connect to outside financial institutions others don’t ours does not ours is only with your checking accounts at Virginia credit union that is what’s looked at an honor money tracker which is why a lot of people like going to these third-party services now like software packages like quicken are very beneficial as well quicken is similar to mint but it’s housed on your computer it’s not like cloud-based although I think they actually recently went to cloud-based servers and system but basically this just allows you to follow where your money’s going so you can better plan and manage for the future like if you have an objective to get out of your student loan debt as quickly as possible you need a plan to do it and you have to understand where your money’s coming in where it’s going out and this kind of gives you a visualization of how to do that okay now mint is most commonly referred to because it’s free and it’s made by the same people that make quick so it is completely web-based and you may ask yourself well if it’s free what’s their business model and again this is why I’m just I guess I’m just a paranoid person like if it’s free you know they’re selling some of your information and advertising directly to you and marketing directly to you I did use mint a long time ago and I went back to using quicken and an Excel spreadsheet like I use quicken to help me but I actually just have an Excel spreadsheet just really the best way to do it cuz I’m hands-on I get to follow it you know I get to see it and touch it a little bit more so with mint you give it access to all your online accounts it loads in now there’s another one that’s very very popular called you need a budget that one’s not free but again when it’s not free they’re not selling your data they’re not soliciting you other products or services it’s and I’ve heard very very good things about it in fact when I went to go read free up my quicken membership subscription or whatever I really considered moving over at these guys the guys who created it okay so saving and investing now there’s a whole ton of this kind of stuff going on right now this is not we’re not talking about artificial intelligence and then kind of stuff yet these are things Robin Hood’s basically just like a very super low-cost way to kind of start investing acorns is us a lot of people actually probably have a function like acorns already on their online banking or through their bank that they use what acorns does it typically rounds up your transactions and every so often they’ll take that rounded up amount and it’ll transfer it over. The difference though it is at most banks and credit unions they just transfer the money out of your checking to kind of put it again into a little savings or money market even the money market rates are still relatively low this one actually puts the

money into directly into investment products with acorns there’s a fee for it it’s like a dollar a month and when you actually you’re starting out small like the the expense ratio on that is actually really high because you’re not really investing a lot of money like only when you start to have a little accumulate a ton of money is the expense ratio actually relatively low it’s a good way to kind of get started and its really it really actually is very good for college students because your don’t have a lot of time to think about invest saying you don’t really have a lot of extra cash flow to deal with like that you have available to you I do my own investing like just through Vanguard myself okay artificial intelligence Robo advisor now personal capital betterment these are some of the most highly rated Robo advisors or you heard that term rebel advising before now okay so financial advisors make money a couple different ways some of them charge like fee-only advisor to charge you a fee to help you manage your money and they give you advice because you’re paying them to do that other advisors or brokers make money off of selling you products or services that do benefit to you but they make Commission’s off of that many times they’re making a commission that’s the less money for you basically having an understanding what your expense ratio is can mean the difference of like half a million a million or more over the lifetime of your organization so like the way the fees are drawn and the way that the compound over time is a substantial substantial like a half a point so a lot of times financial advisors use fairly sophisticated software to maximize your return and reduce your risk it’s not it’s relatively new like within the last half century this thing in investing called portfolio theory which basically does that it’s very complex mathematical mathematics to maximize your return reduce your risk and optimize your savings based on your strategy and all that kind of stuff so what some very smart protective people did is they basically took portfolio theory to put it into a software platform and so it kind of is democratizing like very expensive financial advising with us now betterment and personal capital are very very highly rated in terms of the amount of value you get out of it but there is still a cost associated with it okay I think with each of those betterment is actually like free up to a certain point but if you want their actual advisors to someone a human being to speak with then they start to charge a fee at that point I think with personal capital it’s like 0.25 percent or something like that is their expense ratio which is very low compared to like actively managed advisors now the benefits like if you’re doing yourself like a DIY investor like a lot of people like to just put money in index funds and try to get the cheapest thing possible and you do broad-based index investing and things like that which is very valuable that’s the way I do mine because I know enough about it to be dangerous yes this really helps with like your taxes and understanding what your strategy is with student loans and all that kind of stuff that’s the value of enterprise so this is basically just an online version of that now digits a little bit different digit is a service that’s used that looks at your spending habits and actually like monitors what your habits are and what your bills are and over a period of time it actually recommends different points in which you can save some money so it like like looking like okay so this month you did spend quite as much on going out to eat for lunch so we noticed that you know this month you’re gonna have this much left over like 10 bucks left over if you want to put it in safe to say yes and it doesn’t it has its own account there are fees involved and I’ve never used that service but I hear it’s pretty cool but again this is more about like micro investing microsavings small bits of the time if you really want to be financially how they can pay yourself first whenever you get money to save a part of it a relatively large part of it and need work to pay down debts and stuff like that these things kind of help little bits of a time does that make sense okay again there’s more information on there’s two handouts about some of those different choices always always with anything do your due diligence read reviews read

independent reviews read everything on an FAQ section before you sign up for anything read everything about the fee structures before you sign up for King that’s my advice okay all right how am i doing on time good oh good we got like 15 minutes about Bitcoin anybody invest in Bitcoin yeah me neither I’m not hiding funny does anyone know how it works or what it is yeah okay cool then what kind of we’re gonna learn something say again this is a very very basic and fundamental thing like I am NOT I told this before I’m not a tech person so I could never set up my own rig to like my bitcoins and all that job so before before we kind of start like Bitcoin and cryptocurrencies are something that we have been kind of developed or designed to replace our current monetary system so in order to understand why someone would want to replace our current monetary system I’m going to explain very very high-level how our current monetary system works so money is really nothing like we have fiat currency in the United States so it’s backed by nothing it’s backed by The Full Faith and Credit of the United States government there’s no tangible item that you can take a dollar into the bank or the government say hey give me this because I have this many units right before 1971 I want to say there’s maybe 76 the United States on the Goldstein so basically you can actually at that time you can actually go and redeem your dollars for physical pieces of gold okay which is also kind of a weird thing because gold only has tallies because we get it back right so money is just like policy is a construct like it’s a social contract more than anything so some current some qualities of any kind of money or currency is that it’s a store value it’s a unit of account and it’s a medium of exchange like that’s the primary definition of them what money is right so I mean if we want to go back to the original financial technology the invention of money and credit really is the beginning of money before that you have the barter system like I have something you want you know something that I want we just you and I decide on what we think is fair between the two of us and we make that trade in tangible physical items or goods or services right what money did is it allowed for a standard medium of exchange to be placed and it basically gave everything in unit value that we could compare easily right so like everything everything has a price everything has a dollar amount okay now the value of the dollar is based on supply and demand it’s kind of like it’s like basic economics like gold it’s gold for example gold once was considered a form of money why do you think gold was considered about Yeah right but there really wasn’t I mean there was no reason to honestly like the more that like sociologists look at it it’s gold or shiny it doesn’t corrode it’s relatively lightweight metal and it’s positive so it’s easy to make points and stuff out of it no touch weights it fluctuates because there’s a limited supply then because there are other things that are used as currency now primarily gold does fluctuate greatly like I mean like the value of gold swings relatively substantially compared to currencies now currencies do also fluctuate value over time too but they have to fluctuate based on something else like the value of the dollar in and of itself is kind of irrelevant but the dollar versus the Chinese yuan or the peso or whatever the euro that’s where they’re like currency traders make their money we’re getting off topic that’s a little bit more complex but kind of like with gold the dollar only gets its value because we collectively decide that it has down basically the government also added a couple different things to kind of ensure that we would always value it like it’s legal tender so it’s the only thing that the government you are retired you are obligated by law to take dollars for any outstanding debts in our society and it’s the only thing that the federal government will take to pay your taxes so you can’t pay taxes in gold you

have to convert that to cash – okay so reason that the way that the way that it’s created the way the money is created in our society that kind of feeds into how this works is the United States Treasury issued bonds and the bonds are bought by the Federal Reserve and by private investors and by foreign investors so that’s what sets the price of the bonds and but they’re really literally created out of nothing like the Federal Reserve comes into the Treasury and just says okay here’s your money and they’ve created out of nothing that’s how part that’s and that’s what the government is able to spend now individually there’s a much larger or broader way than money is created through the actual banking system it’s called fractional reserve banking it’s really fascinating if you get into it but so here’s how that works banks who are who have an account at the Federal Reserve and who are FDIC or NCUA insured against you as credit conversion that gets it so it’s federally insured money we’re required to keep a certain amount of cash on our balance sheet okay that balance sheet only requires a small percentage of the actual loans which are crediting in our bank that’s the asset side of our balance sheet is the loan where as the deposit is liabilities we have to pay interest on but if possible someone follow me so far it’s kind of weird right so we’re required to keep this amount of our liability of cash for a balance sheet and we’re able to lend out like ten times that now so you come in you deposit ten dollars into account of this credit union I can actually go out and lend you $100 and based on your ten dollars that you gave me and that additional ninety dollars I literally wrote it into your account and created out of nothing that’s what’s called fractional reserve banking so your money supply is created by the banks out of nothing based on credit great okay all right so a lot of people think that the weight of this day is set up it’s corrupt and the central government and the central banks are all in cahoots and that’s what’s leading to income inequality and it out and there’s probably some history and merit to some of that so a lot of people who are a little bit I guess more libertarian leaning and are not a fan of central planning or central governments decided to create a currency that is independent of all central banking and that’s where cryptocurrencies came from so crypto currencies Bitcoin this is a primary example of crypto currencies but they’re like I think there’s like 1500 out there more now so crypto currency is a digital currency it uses in Christian if because of the way that the code was written it regulates the the generation of new units okay so the Federal Reserve has direct control over how much money is in our system circulating in our system right now okay they do that by calling on not for doing bonds and all this kind of stuff one of the primary additional primary functions of the banking system as it stands today is to verify transactions so like we were talking about how it takes time for me as a vendor to verify that you as a customer have money in your account and I have to actually go to the way that all that works like Visa will go to the Federal Reserve and then you know well actually they go through ACH but there’s like multiple different levels to till I get to your back and actually which that’s the point in the whole thing this kind of skirts around all of that and it’s direct individual transactions now cryptocurrency is not watching cryptocurrency uses blockchain technology as a way to verify transactions okay so the way that that works is oh wait this is how you get it okay so how do you get cryptocurrencies you can either go to a third-party vendor just buy it okay but that’s really kind of sketchy because it’s a relatively new technology or talk about that in a second you must have a digital wallet coinbase places like that offer digital wallets so you can either sell a product or service and accepted as payment as a form of payment which that’s a I don’t know if you’ve ever heard that read that article about 50 cent back when Bitcoin wasn’t worth anything 50 cent like sold an album and he was like one of the first people that just like sold it on his own and accepted Bitcoin and then like all of a sudden he like like years later he’s like found this like coin so that his token was like oh I got like millions of dollars sitting here in this he didn’t even know like he didn’t even know the first Bitcoin transaction was

for like 50 Bitcoin for a pizza like one pizza and like that 50 Bitcoin at the peak in December of 2017 was worth like I don’t know it was like trading like $20,000 for a Bitcoin so it’s like I mean it’s like crazy so crazy which that’s another one the downfall so we’re going to talk about so you can either buy it from a broker using cash you can sell a product or serving a service or accept it as a payment or you can actually mine Bitcoin which is kind of a weird term by verifying transactions so that’s how this works right so the way that it works is like you have two parties that agree to a sale of a particular product or service so if you want to sell me on a boat and we agreed to a price and we’re gonna transact a big one well we find out whatever we agree on how many Bitcoin you’re going to give me for my boat and then we say okay she’s gonna transfer me this amount of Bitcoin and so we send it out to the entire thing saying we’re going to do this transaction and everybody everybody on the system is going to verify so that goes out to this like localized network of computers that verify the transactions these are all these different individual computers are called nodes and they hold the entire every computer that’s on the system holds the entire ledger okay and so the first few people who get a hold of this transaction actually verify that you are you and you have that amount of your town and I me and I have you know I’m the recipient not we’ve agreed upon this and so they run these mathematical algorithms and that’s what’s called monami every time your computer verifies the transaction you get a little tiny piece of that transaction okay that sounds that’s how Bitcoin is actually created okay now they use like sophisticated mathematical algorithms to do all this kind of stuff and multiple different computers actually do this at the same time once it’s been verified by enough computers within the system then it’s bundled up into a block and then if that block is added to the general ledger now it’s almost impossible to change the original general ledger as soon as anyone tries to change it and it is very noticeable based on how its recorded over time okay so because of that it’s like it’s impossible to undo a transaction it’s almost impossible to undo the transaction but it does not require a third party to verify transactions everybody just on it is the one who you’re saying like yeah this is good so who are the people that verify transactions well thanks bye now our system banks verify transactions and automated clearing houses and the Federal Reserve verify transactions so we just have to have faith that they’re being honest I guess I’m just paranoid but with Bitcoin this process takes about ten minutes still I think it may be given a little as it as that kind of boom happened like more servers came online and the capacity grew but it does take about ten minutes after you complete a transaction and it takes an hour or a ridiculous amount of actual energy to run all of these servers so it’s not efficient in terms of energy so advantages and disadvantages of Bitcoin all right you can see up here the advantages it’s decentralized so it’s not controlled by central bank it is in limited supplies so that’s another one of the components of gold and precious metals is that you can’t there’s alchemy never was actually invented right there is no way that you can just make gold gold as gold and it’s a limited supply that’s why a lot of people also like to invest in real estate because plain and earth is a defined space it’s a limited limited supply and real estate like everyone needs a place so demand is every human being on planet earth so limited supply a lot of demand that’s why real estate traditionally goes up and down at the time if all of a sudden people think but enough people think that goal doesn’t work anything and it’s not if enough people don’t think the dollars worth anything inside worth anything a lot of people make this argument about Bitcoin because it’s not there is nothing other than the ledger itself that gives it any kind of value it’s that supply and demand function but there’s no federal government there’s no regulation there’s no physical tangible asset it’s just it is what it is transact because they choose to but because it’s a limited supply you can’t just have somebody like you’ve recently been going through that just poop it’s a spigot of cash it makes inflation skyrocket that’s going to happen shortly in our economy because of what happened the past ten years if you believe in the conference but economists can be wrong and they are off it’s secure because it uses encryption encryption techniques and decentralized stuff

lastly disadvantages of course it’s very speculative so the value swings very widely it’s not a good use of transaction or currency right now because tomorrow it could be worth like 15% work less nice work today subjective frog and it does rely on network which means you have to have internet connectivity and power so I hope this is beneficial for you do your research do due diligence do it old-school try to be smart about it