On Thursday, 20th October we looked at the old and new when it comes to money. There was a lot of interest in Digital or Online Banking:
What is digital /online banking?
Digital banking, also called mobile banking, is a way to control your money, usually through a smartphone app or web app. It allows you to log into your account anywhere with Internet access, giving you constant visibility of your money and helping you understand the best way to manage it.
Digital banks in Spain:
Quite a few members in the audience had digital banks, N26 and Revolut were mentioned as well as the online services of mainstream banks e.g. Openbank from Santander. We looked at some reviews and background information online:
https://www.finder.com/es/en/digital-banks
This is a very informative article which highlights the pluses and minuses of digital banking and the features of various digital banks, how to sign up for an account etc .. sometimes all you need is your driving license! (scroll down through the page to What is Digital Banking)
Here is another good comparison site: Best online banks in Europe. It includes an informative video.
https://www.monito.com/en/wiki/best-online-banks-europe
N26 gets good reviews in both articles – It is not available in the UK, but as a Spanish resident you can get an N26 account. It is secured by the Compensation Scheme of German Banks for up to €100,000. and you get a Spanish IBAN, which could be useful if dealing with taxes and property transactions.
N26 also allows you to trade in Crypto and has a very informative blog about cryptocurrency which Chris should really have read before the presentation! https://n26.com/en-es/blog/category/crypto Unfortunately Katharine wasn’t able to attend the meeting (she had to work ..sigh) so Chris ran through some of Katharine’s slides, describing the origin of Bitcoin, how a blockchain works, Ethereum and other cryptocurrencies. The key points to take away are that these are decentralised currencies controlled by no one (well, sort of), anonymous and secure insofar as transactions can’t be fiddled with.
Halfway through the slideshow, Chris showed this video which one of the slides linked to:
Most people were still confused afterwards!
Chris noted:
- You need to control 51% of the nodes in order to fiddle the thing …though there are big syndicates which if they worked together could control things.
- There’s a limit to the number of available Bitcoins – 21 million
https://www.investopedia.com/tech/what-happens-bitcoin-after-21-million-mined
- The Proof of Work calculation uses an enormous amount of energy. It’s estimated that Bitcoin consumes electricity at an annualized rate of 127 terawatt-hours (TWh). That usage exceeds the entire annual electricity consumption of Norway.
- Ethereum has moved away (… is moving away?) from Proof of Work to Proof of Stake – (Nodes vote on whether to update the blockchain. Every node stakes some ether, if they misbehave they lose it). This results in 99.9% less energy consumption and could save the world the annual power consumption of Chile…however the system is not without security flaws.
More notes on cryptocurrencies:
- Ethereum Request for Comment 20 (ERC-20) is the implemented standard for fungible (interchangeable) tokens created using the Ethereum blockchain. ERC-20 guides the creation of new tokens on the Ethereum blockchain so that they are interchangeable with other tokens used within smart contracts. Jul 6, 2022.. i.e. a standard for cryptocurrency conversion!
- Dogecoin (/ˈdoʊ(d)ʒkɔɪn/ DOHJ-koyn or DOHZH-koyn, Abbreviation: DOGE; sign: Ð) is a cryptocurrency created by software engineers Billy Markus and Jackson Palmer, who decided to create a payment system as a “joke”, making fun of the wild speculation in cryptocurrencies at the time. It is considered both the first “meme coin”, and, more specifically, the first “dog coin”. Despite its satirical nature, some consider it a legitimate investment prospect. Dogecoin features the face of the Shiba Inu dog from the “doge” meme as its logo and namesake. It was introduced on December 6, 2013, and quickly developed its own online community, reaching a market capitalization of over $85 billion on May 5, 2021. (Most importantly) It is the current shirt sponsor of Watford Football Club. (From Wikipedia)
- NFT A non-fungible token is a unique digital identifier that cannot be copied, substituted, or subdivided, that is recorded in a blockchain, and that is used to certify authenticity and ownership.
- A cryptocurrency wallet is a device, physical medium (e.g. a piece of paper!), program or service which stores the public and/or private keys for cryptocurrency transactions. In addition to this basic function of storing the keys, a cryptocurrency wallet more often also offers the functionality of encrypting and/or signing information.
- Peter recommended a YouTube video about how the current money system works: “Money as Debt I – Revised Edition 2009 (Full Movie)” https://www.youtube.com/watch?v=2nBPN-MKefA
Are cryptocurrencies safe?
We didn’t discuss this, but there’s a great analysis on the N26 website (yes, them again)
https://n26.com/en-eu/blog/is-cryptocurrency-safe
Cash: Do we need cash anymore? Who uses cash? Why and what for? Will we be doing away with cash in the near future?
Chris kicked off the discussion with the discovery of 53 Roman gold coins in the sea off Xàbia – a hoard which appears to have belonged to a person fleeing chaotic times at the fall of the Roman Empire. If you were fleeing Ukraine today with your credit card and the bank or internet communications went down …what would you have? Most members used at least a little cash – mostly for paying for coffee. Some restaurants refuse card payments, perhaps to avoid the 3% charge a card payment incurs to the seller. Apparently in Sweden, you can’t use cash to pay to use the ladies’ toilets – it has to be a digital payment. We noted how the significant black economy relies on cash so as to be invisible to the tax authorities, and a member highlighted the considerable cost of printing notes and coins – an incentive to governments to phase out physical money. Time will tell!
Chris Betterton-Jones – Knowledge Junkie