April 21st, 2024

Wins and pitfalls abound in crypto currency


By Lethbridge Herald on January 21, 2022.

Herald photo by Al Beeber Bitcoin investor Scott McGregor works from his home office this week. McGregor is a big believer in bitcoin but suggests people do their own research before investing themselves.

Al Beeber

LETHBRIDGE HERALD

abeeber@lethbridgeherald.com

Scott McGregor hates the term ‘crypto currency.’ McGregor, who spent about 16 years in the radio industry, now does investing from his southside home.

After being introduced to bitcoin by a brother-in-law, he began studying what he prefers to call a “monetary network.”

While bitcoin is the most well-known type of crypto, there are others such as ethereum and not all are trying to be alternative versions of cash, he said.

McGregor says outright he won’t recommend anyone to invest in digital currency.

Instead, he says people need to do their own research and a great avenue is on YouTube where he learned an enormous amount about crypto himself.

McGregor sees crypto as an evolution of the concept of currency. He says only 21 million bitcoin will ever exist which is why its value is so high – about $42,000 U.S. right now for one bitcoin.

But investors can put their money into shares of bitcoin.

The more money put into a bitcoin network, the more value the network has, he says.

For McGregor, bitcoin is “digital gold” and a way to increase investments while money loses its value “at a rate never seen before in human history.”

“I want my money to be worth more down the road, not less,” he said, emphasizing that people need to make their own financial decisions based upon priorities and what they can afford to do with their investment dollars.

And he warns that there are many scammers in the world of bitcoin, just like everywhere else, waiting to take advantage of people.

For that reason, he suggests potential investors never respond to traders who reach out to them. Instead, he says people need to study bitcoin and reach out themselves when they find an investor who they feel can be trusted.

“It’s a multi-faced kind of technology and it’s one that a lot of people don’t understand. I think one of the biggest problems as you’ve seen locally, there are a lot of scams. People can get hosed. The fact of the matter is, yes there are people who scam other people using crypto… any exchange of money or value, there is a scam – someone will find the loophole.”

“I often say as someone who helps people deal with risk on a daily basis, if the money is too important to you don’t re-morgage your house to put money into any sort of investment regardless of what I say or anyone on the Internet says,” said McGregor.

“Because we don’t know. A lot of what we do as active investors is speculating. But I’m someone who believes in crypto, believes in the technology.

“The way that I look at it and some people I follow, as well, we think of it as digital gold, a better form of gold,” McGregor said of bitcoin which was created in 2008.

“This is something that people need to know because our money is losing value at a rate never seen before in human history.”

He said if people aren’t getting an annual raise that matches the inflation level “you are poorer now than you were last year.”

“I look at it as a digital gold, digital savings account where I want the value of my money to be worth more down the road, not less down the road. And with the way that banks and interest rates are” people aren’t getting much return on their savings accounts, he said.

He was first skeptical about bitcoin because he didn’t know what it was until his brother in law talked to him about it.

“If you look at the trend of bitcoin, bitcoin goes up 100 per cent each year and it has for the last 10 years on average,” he added. Last year, it earned about 60 per cent, McGregor said.

This has huge potential benefits not only for individuals but governments as well, he said. McGregor talked to former mayor Chris Spearman about bitcoin and the potential if some of the City’s reserves were invested in it.

“If they put one per cent of the City’s reserves on the bitcoin network, it goes up 60 per cent. That’s found money, that’s money they don’t have to tax for anymore. That’s what some businesses are doing with their balance sheet to combat inflation.

“Get off of zero per cent. If you put one per cent of your net worth in bitcoin, and it goes up 10X over the next years, you’ve made 100 per cent. And chances are you’ve outperformed the rest of your portfolio. So imagine if the City did that.”

He said active investors are trying to outperform inflation and the S & P 500, and they are doing it through digitized currency.

“You think about everything in our lives that have been digitized – our music is digitized, our movies are digitized. Everything is on the phone – what isn’t is our money.”

The original idea of bitcoin is “money for the Internet, peer-to-peer cash, peer-to-peer value over the Internet.”

The way people look at bitcoin is as a “store of value or a way to send money effortlessly without a third party. So if you had a bitcoin wallet, I could send you $100 right now and no bank would be involved.” And that means lower transfer fees via the bitcoin lightning network than a person would pay through “a traditional payment rail,” he said.

But if McGregor typed in the wrong email address that money would be lost, so a huge personal responsibility comes into play.

Follow @albeebHerald on Twitter

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GHG

So much for your “store of value”. Bitcoin has dropped precipitously since this story came out.

Last edited 2 years ago by GHG