What the Hell are Cryptocurrencies?

Let me tell you where I am from for those who don't know. Ballina. 30 minutes south of Byron Bay and 2 hours south of Brisbane on a good drive. Traditionally, a sleepy fishing village with the main claim to fame being our much loved Big Prawn and the home of the mighty  Ballina Rugby Club Seahorses.

You wouldn't call it the economic hub of the Far North Coast but it's a great place to live as long as you stay out of the way of the sharks.

So, understanding this, I am a bit concerned that in the last 2 weeks I have been asked on half a dozen occasions what my view is on Cryptocurrencies and Bitcoin. 

What the hell would I know!

I may not be Warren Buffett but as the Sage of Tamar St, I still have little idea of what these anonymous currency types can do.

I am sure that if I started recommending cryptocurrency strategies for those entering the retirement phase of their financial lives, ASIC would be all over me like a cheap suit. This is possibly a new style of currency that MIGHT be legitimate one day. Japan has accepted it as legal tender but the rest of the world has not yet.

One client had been approached by a friend and a $10,000.00 package was suggested.  $5000.00 would be traded. (What happens to the other $5000.00?) I explained my knowledge was limited but I would suggest that he steers clear. You see, this is an unregulated market. Prices differ and anybody can get you started. Compare this to the Financial Planning regime where we have one of the most regulated industries in the world.

The  simplest, best explanation of what cryptocurrency is from TheSkimm where Hank Azaria  from The Simpsons fame covers this topic in much the same way Margot Robbie explained collateralized debt obligations in the movie - The Big Short.

Click here to understand better what cryptocurrencies are.