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Natural Awakenings Twin Cities

What is Crypto-Currency Anyway? Part One with Matt Ferrin

Meet Matt Ferrin, Chief Financial Officer of Northwoods Credit Union begins the explanation of cryptocurrency by introducing the blockchain. Through engaging stories and analogies, he brings understanding of this new record-keeping system and explains its benefits and disadvantages. Ferrin also shares the history of bitcoin. For more information about Northwoods Credit Union, visit NorthwoodsCU.org.

Shownotes:

[00:00:07.370] - Candi Broeffle, Host
Good morning. And welcome to Green Tea Conversations, the radio show that delves into the pages of Natural Awakenings magazine to bring you the local experts who share their progressive ideas and the latest information and insights needed so you can lead your best life. I'm your host, Candi Broeffle, publisher of the Twin Cities edition of Natural Awakenings magazine. And I am honored to bring these experts to you today. We welcome Matt Ferrin, chief financial officer of Northwoods Credit Union, which has locations throughout northeast Minnesota. Welcome to the show, Matt.
 
[00:00:41.090] - Matt Ferrin, Guest
Thank you. It's a pleasure to be here.
 
[00:00:43.790] - Candi Broeffle, Host
So our audience may be asking themselves, Why is the CFO of a credit union 150 miles away from the Twin Cities on Green Tea Conversations? Well, I learned that Matt had studied cryptocurrency in-depth for many years and coupled with his knowledge of finance and banking, plus his ability to explain it in a way that even I can understand. I just knew he had to be on the show. So many of us have heard of digital currency, cryptocurrency, blockchain Bitcoin and more. But we don't always understand what it means.
 
[00:01:22.490] 
I, for one, can tell you I have no idea what it means. So I'm curious, is this all the same thing? Is it just a different terminology for the same type of thing, or is it completely different? So, Matt, can you help us understand what all this terminology means?
 
[00:01:40.610] - Matt Ferrin, Guest
Yes. Cryptocurrency introduces a lot of new terminology, new concepts, new terminology, new ways of doing things, and some of it can be very confusing. So today I think we can talk about cryptocurrency. And if I tell you that cryptocurrency is a credit given by a record keeping system that probably makes no sense, correct? Yes. So the best way to start talking about cryptocurrency is to take a step back and provide a little bit of background or a little bit of context on how cryptocurrency was developed. And one of the foundational concepts is called blockchain.
 
[00:02:34.070] 
Blockchain is a term that gets tossed around a lot, but very few people understand it. What a blockchain is. One of the easiest ways is everybody usually has a financial institution, right? You go to the financial institution, your paycheck is deposited there. You can write a check to pay for groceries or do transactions. Right. Every time you do that, you get a receipt of those transactions. So, for example, Candi, you're going to write me a check for some snow plowing or something that I did for you. Right.
 
[00:03:14.510] - Candi Broeffle, Host
Right.
 
[00:03:14.870] - Matt Ferrin, Guest
And you go into your check register and you write down. Okay. I paid Matt $5 for snow plowing. I know. And then I take that check and give it to the bank or credit Union, and they have a record of it. And then they move that money from your account to my account. Right. We're all familiar with that.
 
[00:03:38.390] - Candi Broeffle, Host
Correct.
 
[00:03:39.230] - Matt Ferrin, Guest
In that way, you have a record of all the transactions in your account. And the financial institution has a record of all the transactions in your account.
 
[00:03:52.070] 
Now, in today's world, with disaster and everything else that's happening, your financial institution will usually have a backup system. They'll take all of their records and they'll move it to a disaster recovery site in like New York. And they'll have another backup recovery site in Los Angeles and another backup recovery site in Texas. So you have a record of all your transactions. The financial institution has a record of all your transactions. Plus, there's a record in New York and a record in Texas and a record in La.
 
[00:04:34.070] 
Very easily understood. Now, here's what happens when we start to develop a blockchain. For example, the record in New York. Let's put somebody else in charge of that, not your financial institution. Let's put Jim in charge of that record, and we'll put Sally in charge of the record in La, and we'll put Bob in charge of the record in Texas. So every time you do a transaction, that transaction gets recorded in Minneapolis with your financial institution, Bob keeps a record, sue keeps a record, and Jim keeps a record.
 
[00:05:21.530] 
Right. So now we have multiple sets of records. If something happens to one of those records, we can go to all the rest of the records, have the history and recreate what we need. That, in essence, is a blockchain, right. A series of records or ledgers kept separate from each other. Now we would have to pay Bob and Jim and everybody else to keep that record. That happens every day with financial institutions all over the world. What happens with cryptocurrency is rather than paying Jim dollars, we're going to give him a credit to keep track of the record.
 
[00:06:10.130] 
The in-house credit, right. It's like if you go to a store, you buy something, you don't like it, you take it back. And rather than giving you money, they give you an in-house credit.
 
[00:06:23.870] - Candi Broeffle, Host
Okay.
 
[00:06:25.370] - Matt Ferrin, Guest
That in-house credit is cryptocurrency. Right. So if you followed me so far, you have learned the hardest part about cryptocurrency.
 
[00:06:37.550] - Candi Broeffle, Host
Okay. Well, that's good.
 
[00:06:40.250] - Matt Ferrin, Guest
Yes. That's the hardest part is the understanding that we have multiple records of all the transactions in different places.
 
[00:06:53.150] - Candi Broeffle, Host
Okay. So. How do you have knowledge of what your cryptocurrency is? We can go to our bank and we can go on to our online account and see what our balance is. How do you do that with cryptocurrency?
 
[00:07:09.950] - Matt Ferrin, Guest
Excellent. So with cryptocurrency, what happens is all those records, instead of having my name in it will just have my account number. And so I would log into the system through an app or into the Bitcoin system. And I would ask, and I say, what is my credit amount? And the system would say, okay, you have five credits. And that's how I would know. And those credits are five Bitcoin. That's how much you know you have in your account.
 
[00:07:47.510] - Candi Broeffle, Host
Okay.
 
[00:07:48.410] - Matt Ferrin, Guest
So what happens here is because the records are kept in multiple different places.
 
[00:07:55.490] 
We can actually take the record out of your financial institution. Your financial institution doesn't even have to keep the record anymore because all of the other people are keeping a record of all the transactions.
 
[00:08:10.250] - Candi Broeffle, Host
Okay. I'm getting a little nervous.
 
[00:08:17.450] - Matt Ferrin, Guest
But exactly. So if we take right, because Jim is in New York and Bob is in Texas, they can communicate. And if someone comes in in New York and says, hey, I need to make a transaction that gets recorded in that record and then broadcast to Minneapolis and La and Texas. And that way, the record is all the same.
 
[00:08:50.610] - Candi Broeffle, Host
Okay.
 
[00:08:52.950] - Matt Ferrin, Guest
So this provides, as you said, we get a little nervous with all the records floating out there. But we've experienced in the financial world lately, some pretty big scandals in the news the past couple of years, you've seen some financial institutions that have signed their customers up for products they didn't sign up for.
 
[00:09:21.510] - Candi Broeffle, Host
Yes.
 
[00:09:22.350] - Matt Ferrin, Guest
And because the financial institution gets to keep the record if they make a change in the record, that's the proof. Well, if we've taken that record and given it to Jim in New York and Bob in Texas and a whole bunch of other people, the financial institution can't make that adjustment in the record without everyone else knowing.
 
[00:09:48.330] - Candi Broeffle, Host
Okay.
 
[00:09:49.590] - Matt Ferrin, Guest
So that provides more security and more trust in the integrity of the record. Right.
 
[00:09:58.950] - Candi Broeffle, Host
Right. And there's also something about the relationship, right. I mean, we have our relationship with our local bank. We don't think about it being kept in New York and Texas and Los Angeles. We're bringing our money to our local banker. And we see the people who we see all the time there. And so there's that high level of trust. Where with Blockchain, you don't have that.
 
[00:10:22.710] - Matt Ferrin, Guest
Now, that is good and bad. Right? With Blockchain. So the record, one of the things that is important in the record that allows this to exist is the security. I don't want Jim knowing that Matt has all these transactions. So we take all the names out of the record, and everyone just gets a number. And you have a public number that everyone can see and a private number that allows you to access your account.
 
[00:10:56.370] - Candi Broeffle, Host
Okay.
 
[00:10:56.730] - Matt Ferrin, Guest
That way, you can see the whole record, but there's no names attached to anything. And you don't know who owns what you just know what you have. And so this provides more security, because in today's world, with identity theft and fraud and everything else that goes on, there's a huge problem with that.
 
[00:11:19.950] - Candi Broeffle, Host
So when we come back, we're going to continue this conversation and you'll continue to take us down this path of what blockchain is. So for people who want to learn more about Northwoods Credit Union, which is where Matt is the CFO, you can visit NorthwoodsCU.org. And again, that's Northwoods with an S CU. Org to read the online version Natural Awakenings Magazine, visit NaturalTwinCities.com. You're listening to Green Tea Conversations on AM950, the Progressive Voice of Minnesota. And we will be right back.
 
[00:12:10.090] 
Welcome back to Green Tea Conversations, the radio show that delves into the pages of Natural Awakenings Magazine to bring you the local experts who share their progressive ideas and the latest information and insights needed so you can lead your best life.
 
[00:12:23.470] 
I'm your host, Candi Broeffle, publisher of the Twin Cities edition of Natural Awakenings magazine. And I am honored to bring these experts to you. So today we are welcoming Matt Ferrin, chief financial officer of Northwoods Credit Union, which has locations throughout northeast Minnesota. So, Matt, just before the break, you are helping us to get a better understanding of what cryptocurrency is. You started to explain to us Blockchain, which is the way that the transactions are tracked. And we started to have a conversation about trust and why we have such a high level of trust when we're going into our local banks.
 
[00:13:05.290] 
And so some people are confused or don't understand how the blockchain works and who's tracking it and that type of thing. So tell us a little bit more about that.
 
[00:13:16.870] - Matt Ferrin, Guest
Yes. So in regards to trust, you go into your financial institution and there's a high degree of trust there that they will keep your information confidential. So you may like your teller. You may like your loan officer and have a relationship and work with them. And it's great. But you trust the organization to keep that information secure. And as you've seen over the last couple of years with fraud and hacking and ransomware and compromise that sometimes it can be a little difficult to keep all of that information secure.
 
[00:13:54.970] 
This is one of the things that Blockchain tries to improve on by keeping the record secure and anonymous. And so they use cryptography to encrypt everything, encrypt your number and take any personal identifying information out of the record so you can see what you do. But you can't see what anyone else does unless you tell them. So if you use your computer and you sign up for a cryptocurrency and you want to help maintain the record, then you'll do that. And over time you'll have the opportunity to earn a credit with the system.
 
[00:14:40.330] - Matt Ferrin, Guest
And when you earn that credit, that's what we call cryptocurrency, and you can trade that credit with other people. So Bitcoin was created in 2009 and about 2011. So two years of running the system and seeing if people would use it. There was a person who got on helped create the record, maintain the record and received credit. And he put out a note one day and he said, I want to buy some pizza. I will pay 10,000 Bitcoin, 10,000 credit to whoever will give me two pizzas.
 
[00:15:25.150] 
And someone said, Great, I'll do it. And it took four days for them to work out how this was going to work. Right.
 
[00:15:33.070] 
So the guy sent him 10,000 Bitcoin and he came over and gave him two pizzas. Now, at the time, the value of a Bitcoin was $.004 or basically half a Penny. So 10,000 Bitcoin was about $40.
 
[00:15:52.570] - Candi Broeffle, Host
Okay.
 
[00:15:55.270] - Matt Ferrin, Guest
That was the first commercial transaction right now. Everybody knew that this guy wanted to buy pizza. So they knew that the transaction was his because he announced that over time, the value of Bitcoin has gone up and up and up. So now the value of Bitcoin is roughly $60,000 per Bitcoin.
 
[00:16:19.690] - Candi Broeffle, Host
Oh, my goodness.
 
[00:16:21.310] - Matt Ferrin, Guest
So the value of those pizzas in today's world is about $580,000,000.
 
[00:16:32.210] - Candi Broeffle, Host
Right.
 
[00:16:34.250] - Matt Ferrin, Guest
This is what happens as more and more people join the system and help keep the record. They receive a credit, and with those credits, they can trade with themselves for goods and services.
 
[00:16:48.950] - Candi Broeffle, Host
Man, I just can't stop thinking about that. That had to be some really good pizza.
 
[00:16:56.730] - Matt Ferrin, Guest
You would think so. But this is what happens with cryptocurrency, right? When it gets started, all it is is a credit in the system. It's really not worth anything until people start using it to exchange. Without this guy using it to buy pizza and other transactions, the credit would never be valuable, and it wouldn't grow in value. And so obviously, if you have a payment system like this where you can trade payments or credits between themselves, it's attractive to a lot of people. This is what banks and credit unions and financial institutions and credit card companies all over the world do is they keep track of payments between people.
 
[00:17:45.810] 
So just like you would write me a check, then the credit Union or bank keeps a record of that. If you go in and pay for a good or a service with a credit card, then the credit card company keeps a record of that. We now have a lot of companies that are getting involved, like Apple Pay and financial companies. Well, they maintain all of those records. All cryptocurrency does is they take the records, they separate it. So anybody who wants to can keep the record and then encrypt it so that it's private.
 
[00:18:22.110] - Candi Broeffle, Host
So is it more secure than what we have with our local bank?
 
[00:18:28.170] - Matt Ferrin, Guest
It can be more secure because everything is just done by a number where you have a public number and a private number. So there are no names. So it really increases security because there's nothing based upon your private information. There's no Social Security numbers, there's no tax IDs, there's no mother maiden names. There's none of that stuff, right? It's just a number that, you know, and nobody else knows. This really helps with identity theft and those kind of IT related problems that the world is dealing with now.
 
[00:19:07.470] - Candi Broeffle, Host
It does. But it also is how many of us can't remember our bank account number. And I'm sure that's a lot fewer numbers than what our cryptocurrency number is. So how many of us would be putting it on a posted inside a drawer, which, by the way, our IT people used to tell us that the College was do not do that. But people do it all the time. Right. They write it down somewhere and keep it somewhere. Well, what if somebody else gets a hold of it?
 
[00:19:39.330] - Matt Ferrin, Guest
Then we have big problems because it's so secure. If somebody else gets a hold of your numbers, then they're you and they have full control over all of that.
 
[00:19:53.730] - Candi Broeffle, Host
Wow.
 
[00:19:54.570] - Matt Ferrin, Guest
And so you'll see news stories in the news where someone can't remember their number and they just lost millions of dollars of Bitcoin until they can remember the number or someone else could
 
[00:20:08.730] - Candi Broeffle, Host
There's no forgot password. No link. They can do nothing.
 
[00:20:15.390] 
Wow. That's really scary.
 
[00:20:18.570] - Matt Ferrin, Guest
Because it's so secure. There's no recourse that way. So, yes, it can be more concerning of you better remember the number and you better not share it with anyone.
 
[00:20:32.850] - Candi Broeffle, Host
We're going to have to go into a commercial and then we're going to come back and you're going to tell us what happens if there is that kind of loss. What happens to the Bitcoin that was accumulated? Sounds good.
 
[00:20:46.050] - Matt Ferrin, Guest
Yes. All right.
 
[00:20:47.490] - Candi Broeffle, Host
So for people who want to learn more about Northwoods Credit Union, visit NorthwoodsCU.org. You're listening to Green Tea Conversations on AM950, the Progressive Voice of Minnesota. And we will be right back.
 
[00:21:15.670] 
Welcome back to Green Tea Conversations, where we delve into the pages of Natural Awakenings magazine and talk to the professionals who share their expertise on natural health with you. Today, we're visiting with Matt Barron, chief financial officer of Northwood Credit Union, with locations throughout northeast Minnesota. So just before the break, you are helping us to get a better understanding of what cryptocurrency is.
 
[00:21:39.550] 
And through that talking to us about how the transactions are kept in a blockchain. So you're helping us to understand that aspect of it and what the blockchain is. And before the break, you had told us that it's very secure that there's no name associated with any of the accounts. So the accounts are just simply a number, a public number that everyone can see. And then there is a private number that you have to hold and keep secure. And if somebody gets a hold of that, it is no longer secure, that there is no way of stopping somebody from getting into your account.
 
[00:22:21.910] 
If my husband had a bunch of Bitcoin and he hadn't told me what that private account number is, and God forbid, he should get into a car accident or something, then that is lost. Correct.
 
[00:22:36.670] 
The Bitcoin is just there's no way of knowing what it was.
 
[00:22:40.930] - Matt Ferrin, Guest
That's correct. The access to the Bitcoin is lost. The Bitcoin is still there.
 
[00:22:48.490] - Candi Broeffle, Host
It just doesn't do you any good anymore.
 
[00:22:50.830] - Matt Ferrin, Guest
Exactly. Right. So thinking of Bitcoin as a credit makes a lot of sense. So you go to Walmart. You return some things and they give you an in store credit. And on the way home, heaven forbid, you're hit by a bus and killed. Well, your husband may go in and say, My wife has all this credit. I want to use it. And Walmart will tell you. No, I'm sorry. Only your husband can use this. Now, you may be able to negotiate with them and explain what happened.
 
[00:23:23.710] 
And they work with you. And you can get that resolved on the cryptocurrency system. There's no way to resolve that. That credit just stays on the system. And because no one else has the private number, no one can have access to it.
 
[00:23:40.930] 
So does it eventually get dispersed in any way? It just sits there.
 
[00:23:47.050] - Matt Ferrin, Guest
It stays there for as long as the system runs.
 
[00:23:50.770] - Candi Broeffle, Host
Wow.
 
[00:23:51.970] - Matt Ferrin, Guest
There's a great story. I mean, you look at the news. There's lots of great stories. There was an early adopter of Bitcoin, and he had his private number and he was worried about it. And so he wrote it down on a piece of paper and put it in a safe place. Well, two days later, he was cleaning up his house, swept up the piece of paper, and it ended up in the garbage.
 
[00:24:14.710] - Candi Broeffle, Host
Oh, no.
 
[00:24:15.430] - Matt Ferrin, Guest
Which got taken to the street and got put in the landfill. And he cannot remember the number. And it's been years. His bill is now worth hundreds of millions of dollars. And he is suing the city to try and get access to the landfill, to go search for his number.
 
[00:24:39.190] - Candi Broeffle, Host
Oh, my goodness.
 
[00:24:40.870] - Matt Ferrin, Guest
Because there's no way around it. Right. If you don't have your number, that's it. And the credit, the Bitcoin stays on the system forever.
 
[00:24:50.170] - Candi Broeffle, Host
So we're kind of already talking about a lot of the different terminology cryptocurrency is associated with the overall currency?
 
[00:25:00.430] - Matt Ferrin, Guest
Cryptocurrency refers to the credit for the record-keeping system. Okay. So there's lots of different cryptocurrencies. Right. The one that started first and is most famous is Bitcoin. There's a lot of other cryptocurrencies, like one of the popular ones is Ethereum. A few years after Bitcoin, there was an inventor who started a new cryptocurrency called Dogecoin. As a joke. It's doggy coin. And he's like, this is nonsense. And I'm going to prove it. And I'm going to create my own cryptocurrency. Well, as a joke, it's now been adopted by a lot of people, and it's growing in value.
 
[00:25:46.510] - Candi Broeffle, Host
So anyone can create cryptocurrency.
 
[00:25:51.310] - Matt Ferrin, Guest
Yes. And so we talked about the pizza guy. Well, that's developed. So, for example, right around this time in the Dark Web, there is a website called Silk Road where you could go and buy drugs. That's all well and good. But paying for drugs is difficult. If you're using your bank account.
 
[00:26:14.830] - Candi Broeffle, Host
Somebody might find out.
 
[00:26:16.510] - Matt Ferrin, Guest
Yes. So the people engaging in the illegal activity started using Bitcoin as currency. Right. They say you give me X amount of drugs I'll send you the Bitcoin. And because it's all anonymous that really exploded the user base that only lasted a short while. And then the government shut that down and seized all the Bitcoin. But because people started using it, it started growing. And now what's happened is early this year, Elon Musk with Tesla came out and said they would accept Bitcoin as payment for their cars.
 
[00:26:54.430] 
And even the city of Miami down in Florida this year this summer announced that they're going to start using Bitcoin for some of their transactions. So you can actually use Bitcoin and pay your taxes or pay your utility bill.
 
[00:27:12.430] - Candi Broeffle, Host
So how does that work, though? I mean, if it's worth $60,000 in one credit, how do you use a part of a credit?
 
[00:27:22.570] - Matt Ferrin, Guest
Excellent. That's one of the evolution of cryptocurrency. There's a number of issues. And this is one of those of how do we work this out? Whether we take a Bitcoin and subdivide that into little tiny pieces and then be able to use that. And so that's why you have the development of a lot of different type of cryptocurrencies that have different rules and how the blockchain is created and how the credits are distributed and the value of the credits and things like that. It's hard to buy a candy bar with one Bitcoin.
 
[00:27:58.510] 
It's easy to spend 10,000 bitcoins when it's only worth a fraction of a Penny. You can do that. But going the other way is difficult. So cryptocurrency is really only about 13 years old. And Bitcoin was by itself for a while until other cryptocurrencies started being developed. You hit on one of the issues that need to be ironed out going forward of how do we actually use this as a transactional currency? Most people buy Bitcoin right now and they'll buy a coin or they'll create a credit and they'll just wait until the value goes up and then sell.
 
[00:28:35.650] 
That right. It tends to function more like an investment.
 
[00:28:39.190] - Candi Broeffle, Host
Yes.
 
[00:28:40.390] - Matt Ferrin, Guest
And so unless you know what you're doing, I probably wouldn't recommend doing Bitcoin because it can be very volatile. Right.
 
[00:28:48.190] 
You can use US dollars. Go buy it for 60,000. And if it falls to $30,000, you lost some money there.
 
[00:28:56.290] - Candi Broeffle, Host
I do have a question about that, ma'am. So when you're buying Bitcoin, I guess in my mind I always thought it was kind of like buying stock. Right. So you can say I want $100 worth of stock in this thing and you might get 3.66 shares of stock. You can't do that with Bitcoin.
 
[00:29:18.070] - Matt Ferrin, Guest
Correct. Correct. Now there's other cryptocurrencies where you can do part and they're trying to set that up. So you can. And so people have set up businesses where they say I have one Bitcoin and I'll share parts of that Bitcoin to other people. So I may have one Bitcoin and I'll sell ownership in that to my wife and my kids. So they each own a part of Bitcoin, and then they can trade that part with themselves or other people. It's almost like timesharing a property. But once again, all of that happens outside the Bitcoin system, right.
 
[00:29:58.870] 
You would be working with me directly with that, because it's only one Bitcoin. It's only one credit in the system.
 
[00:30:06.970] - Candi Broeffle, Host
And so for the people who are tracking it with the blockchain, for the people who are keeping the records, as you said, they're actually earning credits toward the Bitcoin, which is why they're doing it.
 
[00:30:20.350] - Matt Ferrin, Guest
Yes. So those are called Bitcoin miners, right. What they're doing is they're maintaining the record and they're communicating with everyone else and for their work, they get credit in the system. They get a Bitcoin. Now, if you don't want to do that, you can go and say, here's a bunch of money. Give me a Bitcoin. I don't want to keep the record, right? You're not a Bitcoin miner, but you own part of the credit. You didn't create the credit. Someone just gave it to you.
 
[00:30:51.970] - Candi Broeffle, Host
Okay.
 
[00:30:53.110] - Matt Ferrin, Guest
Right. So that's, like going into Walmart.
 
[00:30:55.450] 
I return the stuff. I created the credit, but now I'm going to give it to you. That's how this works. So you don't have to be a miner. You don't have to run lots of computers and keep the record. But you can be involved with Bitcoin and not do that.
 
[00:31:11.470] - Candi Broeffle, Host
Okay. So one of my questions had been, I'm thinking old school. Let's look at the ledger and see our paper ledger on how we take in debits and credits and all of that. But how is the record kept for people who are doing that for the blockchain? Like, is it something that they're actively having to do that could be way more than a full time job.
 
[00:31:36.490] - Matt Ferrin, Guest
Yes. It can be a full time job for your computer, not for you. What you do is you just hook up your computer to the network and say, okay, I want my computer to start keeping the record. You never have to look at it. You don't have to do anything, right. Your computer is part of that network and keeps a record and helps maintain that record when new transactions are created.
 
[00:32:05.230] - Candi Broeffle, Host
Okay. There are people who have more than one computer doing this. They're trying to earn credits.
 
[00:32:11.890] - Matt Ferrin, Guest
Yes. They're called mining farms, and they're huge warehouses where people will just put the computer on the shelf and put together 1000 computers or 2000 or 10,000 computers. And each of those computers is maintaining the record. And because they're doing more work, they have a better chance of getting a credit when the system gives the credit.
 
[00:32:38.590] - Candi Broeffle, Host
Okay. Well, that's all very fascinating stuff, but I'm still in way over my head. One of the things that we kind of touched on earlier was the anonymity of it. Let's talk a little bit more about that as far as being able to do transactions anonymously.
 
[00:32:59.590] - Matt Ferrin, Guest
Excellent. As we talked about this, is why criminals started using Blockchain several years ago was because it was anonymous and they could pay for illegal things like that. One of the things that's happened in the last 20 years is there's been more focus on financial transactions with the passing of the Patriot Act, and we don't want to fund terrorism as a country. So looking at transactions and making sure those things don't happen. Well, that's evolved over the last couple of years. And right now today, one of the things we're dealing with is Congress is looking at passing what they call the infrastructure bill.
 
[00:33:41.950] 
Been in the news for months. One part of that infrastructure bill is Congress is trying to raise money to pay for some of the new spending initiatives.
 
[00:33:53.710] - Candi Broeffle, Host
So when we come back, we will continue our conversation with Matt and learn how the infrastructure bill could impact the anonymity of cryptocurrency. To read the online version of Natural Awakenings Magazine, visit NaturalTwinCities.com. You're listening to Green Tea Conversations on AM950 the Progressive Voice of Minnesota. And we will be right back.
 
[00:34:28.610] 
Welcome back to Green Tea Conversations, where we delve into the pages of Natural Awakenings magazine and talk to the professionals who share their expertise on natural health with you. I'm your host, Candi Broeffle.
 
[00:34:39.950] 
And today we're talking with Matt Ferrin, who is the chief financial officer of Northwoods Credit Union with locations throughout northeast Minnesota. So we have been talking about cryptocurrency and the record-keeping of it, which is called blockchain. And just before the break, you are starting to explain to us how the new infrastructure bill could impact the anonymity of cryptocurrency. So let's talk about that a bit more.
 
[00:35:11.210] - Matt Ferrin, Guest
One part of that infrastructure bill is Congress is trying to raise money to pay for some of the new spending initiatives. One of the ways they're doing that is to crack down on tax cheaps. You need to pay your fair share. And if you're not paying all the taxes owed, then the IRS is going to come get you one of the provisions that has been in and out of the bill over the past couple of weeks is the original requirement was any account that has more than $600 of transaction.
 
[00:35:49.430] 
That information needs to be turned over to the IRS. That way, the IRS can look and make sure the inflows and outflows, nobody's hiding any money and everybody is paying their fair share. Well, there's been a lot of pushback from the financial industry about concerns on Privacy, and so they changed that limit to 10,000 and tweaked it back and forth. And it will be interesting to see if that provision actually ends up in the final version of the bill. Let's say, for example, I am a very big tax sheet, and if I'm hiding millions of dollars that I don't want to pay taxes on, I've probably already moved to a cryptocurrency, right?
 
[00:36:36.230] 
I've already moved and I've taken my money put in a cryptocurrency that is anonymous, and no one can identify with me and stored all of my money there. This is one of those things where you can look at it both ways, right. If you have nothing to hide, why not share your information with the world? On the other hand, I really don't want my neighbor knowing what I spend all my money on. And even if the government is responsible with that information today, who's to say what happens?
 
[00:37:11.750] 
Ten or 15 years from now? We've had issues in the recent past. Lois Lerner was the head of the IRS, and there were some problems with the politicization of the IRS several years ago. And even with payments, activists at times have tried to use the payment processing to say, Well, we don't like gun sellers. So we're going to boycott you or we're going to boycott a financial institution that processes your payments until they give up. Well, this is one way to keep the payment process from becoming politicized or weaponized, and to give you an example, a couple of weeks ago, China came out and said, we're banning all cryptocurrencies.
 
[00:38:02.870] - Candi Broeffle, Host
Okay.
 
[00:38:04.130] - Matt Ferrin, Guest
Well, that makes a lot of sense, right? China wants to watch where the money is. And if people are taking money out of Communist China and keeping it somewhere else, they want to track that. And so there are pros and cons to anonymous transactions. This is where I think cryptocurrency is going to have a very interesting future, just specifically because of the anonymous nature of transactions.
 
[00:38:35.690] - Candi Broeffle, Host
I mean, I can see it. It's really interesting because you look at it as it could have some really good points to it. As far as keeping whatever you're doing more anonymous for yourself. But I see it a lot as being really not good. I look at it as it's kind of a little scary if you think about it just because if you wanted to do something completely illegal or you wanted to hurt someone or you wanted to do something and you wanted to pay someone with cryptocurrency, there's basically no way they would ever be able to track that.
 
[00:39:14.150] - Matt Ferrin, Guest
Correct. Right. And so I think we can end with this with a story. Years ago, about ten years ago, I was working at a different credit union. And one day one of our interns came in and asked me, do you know anything about cryptocurrency? And I was like, no, I know that criminals use it. And he said, oh, no, I've been doing cryptocurrency, and I have two Bitcoin. And at the time, they were worth about $200 each. And I'm like, be careful that's currency for criminals and criminals are doing it.
 
[00:39:52.070] 
What are you doing? Normal people don't use cryptocurrency, and he's like, oh, you're old. You don't know. He ended up selling his two Bitcoin and going, I think he bought computer games or something like that. Well, over time, what had a bad reputation is moving more into the mainstream where respectable companies are using it, and governments are starting to use it worldwide. So, for example, Venezuela is starting to roll out their own type of cryptocurrency. Venezuela has had a lot of economic problems in the last few years, have some issues with inflation.
 
[00:40:39.590] 
And so they're rolling out their own version of a cryptocurrency, which I think will be very interesting to see how that works in a government setting, in that type of public domain. And so it's just like US dollars. It can be used for bad. Right? You watch cop shows or Detective shows or mystery shows the bad guys always paying with cash because it's untraceable. We've been living in that world for a long time now. We're just going back to cryptocurrency or digital cash, which is untraceable.
 
[00:41:18.230] 
It's just the next evolution. There will be bad things that happen with the financing of terrorists or drug deals or illegal activity. But there's also a lot of benefit to the record-keeping system, easier transactions, cheaper transactions, and benefit to anonymous transactions.
 
[00:41:40.910] - Candi Broeffle, Host
Well, Matt, I just can't tell you enough how much we appreciate you're coming on to the show today and helping us to get a better understanding of this. And I know that there is still so much more that we need to learn about this that we haven't even really touched on yet. So you have graciously agreed to come back and be on the show again next week and talk about how cryptocurrency is impacting, what the impact it will have on our world as we go forward.
 
[00:42:11.750] 
Sounds good. I appreciate the opportunity to come back. There's a lot to talk about of what's happening in the world and the future of the blockchain, the record-keeping, and the cryptocurrency. So I really appreciate the opportunity to talk with you next week.
 
[00:42:28.790] 
Well, we will see you back in one week, then. So for people who want to learn more about Northwoods Credit Union, visit NorthwoodsCU. Org to read the online edition Natural Awakenings Magazine, or to check out our complete online calendar of events, visit NaturalTwinCities.com. You can find a podcast of this show on a 950 radio or Apple and Google podcast. You've been listening to Green Tea Conversations on Am 950, the Progressive Voice of Minnesota. And I am wishing for you a lovely day.
Read the full July 2022 Magazine