Cryptocurrency Basics

Intro to Cryptocurrency 1.0

Editor’s Note
The following transcript was taken from one of Kelly’s live classes for tax professionals.

Hi! Are you ready to learn about cryptocurrency?

Let me ask you a question. How many of you right now have played with Bitcoin, have a friend who’s played with Bitcoin, or a client who’s played with Bitcoin? At least 75% of you. It’s starting to become more household. I think that’s only gonna grow as we’ll see in some of my slides.

I just want to give you a very, very brief background on me. I didn’t even know what the word cryptocurrency was at first. I started noticing Bitcoin roughly about 2012 on the television. I was watching CNBC a lot. I used to love to watch Kramer because I love to trade in the stock market. And when the markets starting crashing in 08, they didn’t really crash around here until about 2010 in the real estate market. And then, the stock market crashed as well. Apple was the stock I was watching and it went from whatever it was down to next to nothing.

So I started paying closer attention to CNBC. Sure enough, they were talking about Bitcoin. I was like, this is really interesting. I’m curious. I didn’t even know where to start to think about it more in depth. So I didn’t pay much attention to it. I was busy trading Apple in the stock market. And then about a year later, the price shot up from whatever it was to over a thousand dollars. And on the news, CNBC and other places, there was a couple of twins. They’re called the Winklevoss twins. They became millionaires when the price shot up to a thousand dollars and it was all over the news and I was scratching my head going, how did they do that?

I didn’t even know at the time that Bitcoin was traded very similar to how stocks were traded. I had no clue how they were making money with this thing called Bitcoin. And when it went up to $1,000-$1,200, I was kicking myself all over the room, thinking, darn I missed it! I missed the opportunity again. So I didn’t pay any attention to it for a couple of years. And for some reason, one summer in 2015, I decided to look it up. The price had fallen all the way down to 250 bucks. And in that two year period, I started doing a tiny bit more research on it. And I understood it to be a payment system. A payment system that was designed to up end the banks in a nutshell. And I’m like, that anarchist in me is all for that. I know how much I pay for merchant services every time somebody pays me with a credit card or a debit card. So I started paying more attention and I was so excited. I thought at 250 bucks I didn’t miss the boat. I can afford to buy one of those.

So I bought two and then I went around Eugene, Oregon, looking for a place to spend some because after all it was meant to replace my debit card, right? I went looking for a place to buy a cup of coffee or a pizza or a sub sandwich, because that’s what they told me on CNBC I could do. You could, probably in New York. I couldn’t find any place; except for one. I found one guy who was a computer geek. He would restore old laptops and desktops and sell them. I don’t remember how I found him. We got connected and I agreed to buy a used laptop from him for one Bitcoin.

Does anybody know why that was probably not the smartest thing to do? About a $20,000 reason why that was not a good thing to do. What really upset me after I finished the deal, I was excited beyond belief. I was so excited. I bought something with Bitcoin! I had a laptop that lasted about a year. Ugh!

And then once the price started going up, this guy went on with his life. Shortly after I bought those two, I decided to go ahead and buy one more. I don’t remember why. So I ended up with a total of three, but I’ve spent one. So now I was down to two and then the price went up to about $1,200 bucks is what I’m remembering $1,250 maybe. And I was again so excited! I finally made a good decision on one of my investments. So I sold it. If I remember correctly, it was right around October/November, 2017. What happened shortly after that? The price shot up to 20 grand! Now I got mad!

Many of you may know, some of you don’t, I’m a former firefighter. I was a wildland firefighter and Forester. My first real job. But I don’t have a degree in forestry. But I am kind of a go getter. If I want to do it, I go do it. My degree is in mathematics and computer science. I hate to tell you, I don’t have a degree in accounting either. I hated accounting in college, but I taught myself, as many of you might have. So, I try not to swear, but there’s that firefighter in me that really likes to. So I got really upset because what I realized had happened is this guy took advantage of me.

He wanted to acquire as many Bitcoin as he could acquire without spending any money. And he found a patsy. He didn’t care about educating me. I’m a natural born educator. I realized I’ve been doing it now for many years. I’ve taught people about forestry. I’ve taught people about computers. I’ve taught people about accounting. I’ve taught kids. I realized that this is sort of a natural part of my being. And when I realized that, I was so freaking mad, I said, fine, I’m going to learn everything there is to know (about Bitcoin), and that isn’t going to happen to me again. And then I wanted to share it. Really. I started looking for a MeetUp to go to so I could learn more. I couldn’t find a MeetUp in Eugene. I’m an early adopter, but I did not feel like an early adopter because I thought I was two years late.

I ended up having to start my own MeetUp in Eugene and I still have it. I have over 130 members. About the highest number that ever came to a MeetUp was about 24 – 25 people. When the price was at $20,000. Now my average attendance is around 8 – 10. So if you’re ever in the Eugene area, I do have MeetUps. They’re roughly once a month. And they’re called Life with Crypto. There’s a banner over here on the stand. So that is my educational site, It is free to join. I’m trying to get all of these trainings videotaped, and I’ll make them available for free if you attended the live class.