Part #1 – What Is Bitcoin Compared To Fiat Currency? (Bitcoin For Non-Technical People) – By Tai Zen

What’s up guys this is Tai. In this series
of videos I’m gonna talk about how to understand Bitcoin for the non-technical
people. Now, just to give you guys a little background about myself so that you
guys understand where I’m coming from and how these videos are gonna be
structured, okay? I’m not exactly sure how many videos there will be but I’m gonna
keep making it until I can help all my friends and family members understand
what is Bitcoin, okay? Just so you guys know, right? Many of you guys
know that I’m a college dropout, don’t have a very big background in computer
science or mathematics, right? So I learned about Bitcoin at the beginning
of 2013 and I watched as it went into the crash,
the first $265 crash. It went up to $265 and then it crashed back down and then I started
getting some money together to start investing into bitcoins, okay? So in this
video series I want to help you guys understand what I went through and what
I learned about Bitcoin and since I’m not a very computer savvy or a very
mathematically savvy person, okay? I’m not one of those Asians that was gifted in
math and science so I’m gonna make this as dummy proof as I can, you know? So that
people that are non-technical like myself can understand it, okay? Now before
you can understand what is Bitcoin and why it is so revolutionary and in my
opinion, I think it’s going to be even a bigger invention and bigger revolution
than the worldwide web, okay? Now, you might disagree with me on
this or you might find it a shocking surprise for me to say this, but I can
honestly say that there’s not too many things that I’ve seen in the technology
world or anywhere that has revolutionized the mass / the vast
majority of the people on this planet as much as the invention of the
Bitcoin protocol, or the Bitcoin network or the Bitcoin system. However
you want to call it, okay? Now, I just want to give you guys a disclaimer real quick. I would try as best as I can to avoid any kind of technical stuff
here in this explanation about Bitcoin and if you want a really detailed
and very accurate explanation and technical information about Bitcoin I
recommend that you get on YouTube and search for Khan Academy. That’s spelled K-H-A-N Academy and add Bitcoin right behind it, the word Bitcoin and I think that’s one of the best ways that explains what the technical and the
mathematical science behind Bitcoin is, okay? So in this video, I’m not gonna talk about any math or science that he talks about. The most math that I’m going to talk about in this video series is just basic arithmetic because that’s all
I know, all right? So, before we get started with
Bitcoin here guys, right? It’s very important that you understand how our
current banking system works, okay? And how money is being transferred between
one person to another and you will realize how revolutionary Bitcoin is as
a currency, as a system of payment, and as the protocol itself. In this specific
video, in the initial videos I’m making, it’s only going to talk about Bitcoin as
a money or a currency and a payment system or transfer system. In the future
videos I’m going to talk about how Bitcoin is used for other things other
than just currency, okay? So let’s focus now. Before we talk about money here, I
have a few boxes up here to represent. One box over here represents Bank of
America and if you’re not in the financial world it’s commonly known as
BOFA which stands for Bank of America and over here is HSBC, right? Whatever it stands for is not important. It’s just a couple
of international banks that I use here so that you guys can have an idea
because I didn’t want to just use American banks only where I currently live
in the state of Texas because then some of you people that are watching this from the international countries and other countries outside the US, you
may not recognize them but I’m pretty sure that almost everybody has heard of
Bank of America or HSBC bank, alright? Now before you understand Bitcoin
like I said, it’s important you understand how money is being
transferred or goes from one person to another.
I’m gonna use Bank of America as an example and I want you to participate in
this illustration or this example with me so that it can help you understand. I
want you to imagine that you are over here and you have your money at Bank of
America, okay? And this is me over here, right? I’m just going to put my name here so you can see that, right? So let’s just say that if you wanted to send me
one dollar whether it’s one dollar, one Yen, one Euro, one Yuan, it doesn’t
matter what currency that you’re using, okay? Let’s say that if you were to send
me this, the way that it works is that inside
Bank of America they would have a ledger. We going to talk a lot about a ledger
in this video, because it’s one of the key components of Bitcoin, okay? And it’s
one of the key inventions that’s never been invented before. Now in the past,
what happened was most banks would use a ledger and in this ledger there would be
accounts, okay? Ledger is nothing but a notebook that
records how much money each person has inside that Bank, okay? So you would have
a ledger and on the ledger it would show that you have a hundred dollars, a thousand
dollars, a million dollars, whatever it is that you have in there and every time
you want to send me a dollar you will tell your bank and your bank will send
it to me at my bank at HSBC and then what happens is that at my bank there
is also a ledger, okay? This ledger, I’m just gonna draw it out here, okay? Here’s
the ledger with everybody’s names on there and how much money they have.
So what happens is the ledger over here that they keep track of with everybody’s
name on there including yours and how much money everybody has, they will take
money off that ledger and they will forward it to HSBC and HSBC will take
that dollar that you just sent me and record it on the ledger and say that, “Hey
Tai just received a dollar from you over here and BOFA, at Bank of America, right?
And that’s how it’s normally done and every time I spend that
dollar it gets deducted out of the ledger, okay? Now this works all fine and
dandy but there are some problems with this.The problem is that it
requires a third party, okay? Now, I’m gonna get to these other three in a minute, okay? It doesn’t have to be any particular order. I’m just going to jump around, so the first problem that you run into is that you can never send me the
money directly to me, okay? You always have to ask your bank to send it to my
bank and then my bank will let me know So, this third party, anytime you involve
a third party like Bank of America or HSBC bank, the problem is that they’re
going to charge you bank fees and transaction fees and these banks do
not charge cheap fees either. If you were to send me… In the U.S., if
you were to send me anything like over a thousand dollars it would be like a
twenty dollar fee, a fee just to send me that thousand dollars, okay? It may not
seem like a lot, but in some countries that twenty-five dollars could be
somebody’s month salary, so that’s a very expensive way to send money and as long
as we involve a third party you can never send me money directly, okay? The
only way you have to send it to me directly is if you took cash and carried
it to me and handed it to me physically or the currency that you use whether
it’s the Yen of the Euro, okay? That’s just one problem, okay? The next problem with this whole entire system that the way that the banks
are set up is that the banks get to print money at will, okay?
They print money at will without ever having to work for it or provide value
for it and let me explain to you how it is, okay? The banks get their money from…
There’s several ways to get it, but one of the main ways they get
it is from what we call a central bank. Now in America, at the time
that I’m writing this, they call it the Federal Reserve, okay? And the
person that is in charge of the central bank in America right now is a guy named
Ben Bernanke and some people like to joke around and call him the Ben
Bernank, okay? And right now they are in the process of leaving the
central bank of the Federal Reserve and somebody else is going to
replace him, some lady named Janet Yellen, okay? Now what
happens is that at any time, they can borrow money from the central banks at
extremely low low interest rates. We’re talking about like less than 1% or 1%.
It’s extremely low. It’s lower than anything that you and I can ever get, alright? So, they can loan it to these guys and these guys were loaned the money to
you or they loan it to me so that we can go buy our homes or cars and do those
things, right? And you know at first when you think about it, it’s
actually a good system because if you don’t have any money to go and buy
a house and then pay for the full amount of the house, it’s nice to have the banks
there so that you can go and borrow it. Sorry about the allergies guys, my nose
is very itchy right now, okay? So what happens is you can borrow money from the
bank and then pay for the house or the car which is nice. However, the problem with this is that whenever you go to work 9:00 to 5:00, you work your 8 hours
a day and you deposit money into that bank, the banks BOFA and HSBC can
also take that money that you deposited in there. So let’s say for example you
deposited $100 into this bank, right? Let’s say that you deposited $100 into
the bank. Well they only have to keep $10 in
reserve and they can take the other $90 and loan it to anybody they want so
they can loan it to other bank customers that want to buy a car, want to buy a
motorcycle or they want to buy a house or anything like that. They can take your
money that you put in that bank and they can loan to someone else and that’s
where it becomes in my opinion unfair or unjust, because you
cannot do that with your money. You can not. If you try to loan your money,
there’s all kinds of loan shark laws in America and most of the developed
countries where they make it illegal for you to just randomly go out there and
loan people money, okay? So you cannot do that. You can get away with that in a
third world country or something like that, but you’re not going be able to get
away with that in America for very long, okay? The other thing too is that because
they only have to keep ten dollars in reserve, right?
The other $90 dollars, let’s say that they loan it to me to go buy a
car or they loan it to another customer in the bank. When that customer takes
that $90 and deposits it back into the bank,
they keep 10% of it which is nine dollars, okay? So they take that $90
that that second customer borrows to go buy a car at home or whatever and
they’ll keep $9 of it and loan out the other $81 dollars. So that cycle
just continues until they have as much money as they need to do business and
to loan out to people and they collect interest on it. So this whole time
they’re doing all this and keep in mind they never have to work or anything I
mean it’s all computers. It’s not like somebody has to sit there and count a
stack of cash or account anything like that, okay?
No physical or manual labor done. Now if they want some more money… So that’s one
way that they make money, okay? The other ways where they get money from the
central banks; they borrow from their own extremely low interest rates and then
loan it back to you and this is just a vicious cycle, okay? I don’t want to get
into detail about this but if you go to my website underneath the video I have a
link that explains this whole process of how they print money and everything
and that should help you open your eyes on how the the fiat currency system
works. And this is what it’s called by the way. Fiat just simply means fake
because there’s really never any money there, okay? Basically they’re loaning you
a hundred dollars but there’s not really a hundred dollars in their bank to back
it up, okay? There’s just ten dollars in there and
to me it’s kind of like a Ponzi scheme. It’s
kind of like borrowing from Peter to pay Paul is what they say, right?
So that’s one thing is that they can print this and they really don’t
actually print like a piece of paper or currency out. It’s just a bunch of
numbers in a computer, so they don’t even have to spend the money to print that
and like I said the problem with this fiat currency system that we currently
use around the world is that the guys that’s up here in the bank’s, this
one percent of the people that’s on Wall Street right here… We’ll call these folks
the one-percenter’s, okay? The 1%, right? They get to
do this you and I cannot, okay? If you come from a poor background, you come
from an educated background, it doesn’t matter what background you come from, you ain’t gonna be printing money like they do and you can’t loan out money like they
do unless you’re one of the family members or one of the buddies or
friends or things like that, right? So that’s what I call the 1% that’s on
Wall Street and that’s what a lot of people that don’t like the fiat currency
system, that’s what they call them, okay? So they never have to work for it and the
other thing too like I said is that they have a monopoly in this, okay?

10 thoughts on “Part #1 – What Is Bitcoin Compared To Fiat Currency? (Bitcoin For Non-Technical People) – By Tai Zen

  1. I'm a finance major and I Completely disagree with this video… You kinda were all over the place as well.

  2. Lúc trước em có xem mấy cái video của anh Tài dạy về kĩ năng ở phần tiếng Việt, mà tiếc là bên kênh đó anh Tài ko có nói về bitcoin

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