Cryptocurrency’s most famous coin — Bitcoin — has been a big newsmaker recently, some good and some bad. It’s still very new and relatively unknown. There’s a lot of questions about cryptocurrency and debate about protection.
“My opinion is that this is probably the biggest value driver that I’ve seen in my lifetime outside of the internet,” said Jeremy Knopp, principal of CryptoHedge, a private hedge fund dealing in cryptocurrency, who helps institutions and accredited investors navigate this new world.
Out of college, Knopp became fascinated with the idea of cryptocurrency and crypto assets, that it became his life.
“I fell in love with the technology side, as well as the investment capabilities,” he added. “I think there’s a lot of people that don’t know where to start, frankly, because the information is overwhelming.”
His father-in-law, Doug DeMarche, is like many Americans. Maybe his neighbor or his friend made some money in Bitcoin, but other than that, he doesn’t know much about it.
So DeMarche, who wants to get started in investing, is seeking Knopp’s help.
“I think most people now realize the growth potential and the asymmetric upside risk. You know, there’s also a lot of noise out there,” Knopp said.
So Knopp suggests people start from the beginning and learn the basics. Think of it like a digital gold, he said. He believes most people have probably heard of a few of the most popular cryptocurrencies, Etherium, Dogecoin and, of course, Bitcoin.
They are digital coins that exist only online. They can be traded like a stock, and in some cases, can be used to make real-life purchases.
“There has been, literally, no better investment that you could have made from 2009 to 2022 than Bitcoin,” Knopp said.
When you buy Bitcoin or any other crypto, you are actually buying a digital code that exists only on the Bitcoin blockchain. You access this code through a private key to a digital wallet that only you hold.
“I see blockchain technology and, you know, this kind of disintermediation of value as being that next wave of technology,” he added.
The technology is known as blockchain, in essence, a digital accounting book, or ledger. Blockchain is an open source, decentralized, shared-with-everyone, digital ledger. It records transactions and tracks assets 24/7 and in real time. It is tamper-resistant, while also removing the nodes, the middlemen that we often see in finance and business, reducing the risk of foul play and fraud and also cutting the costs, the fees of that middleman.
Many people who don’t mine, use nodes — a third party — to acquire the coin.
“It provides a lot of efficiency. It provides a lot of technological capability outside of what exists today,” Knopp added.
Efficiency that is now disrupting banking and finance, gaming and even music.
Canadian rock band Our Lady Peace, who recently performed a private show in Syracuse, released its latest album as an NFT, a non-fungible token, a digital asset that allowed the band to skip the traditional record label, make the music it wanted to and sell the album — and extras — directly to fans and not pay the label fees.
“So you remove all those middle layers, which has always been a hindrance to creators in terms of distributing, monetizing but also community-building,” Our Lady Peace lead singer Raine Maida said, adding the blockchains ability to track asset transactions, allows creators to earn royalties every time an NFT or other creation on the chain sells from fan to fan.
“Especially from new artists that are kind of unproven and trying to make a name for themselves. They have to accept terms that are not very advantageous for them,” Knopp added.
That is what he means when he says changing the game.
But for as much as some love the idea of what crypto can be, others are not as certain. In the third part of this series, Spectrum News 1 takes a look at the questions many have, the scandals that have sprouted and the balance between a decentralized concept and a possible need for government regulation.