BBC Learnings · Section 10

Would you invest in cryptocurrencies

Now, Sam, what can you tell us about cryptocurrencies? The word is a combination of crypto from cryptography,

Level: B1 · 112 sentences

Transcript

  1. Now, Sam, what can you tell us about cryptocurrencies?
  2. The word is a combination of crypto from cryptography,
  3. which is to do with using clever software codes
  4. to protect computer information and systems,
  5. and currency, which is the money of a particular country.
  6. So cryptocurrency very simply means code money.
  7. We usually think of money as notes and coins,
  8. which come from a country's bank.
  9. But a cryptocurrency doesn't have physical money.
  10. It's purely digital and is not controlled by banks or governments,
  11. but by the people who have it and very complex computer codes.
  12. Perhaps the most well-known is Bitcoin.
  13. Well, you seem to know a fair bit about cryptocurrency actually.
  14. Anyway, now a new player is joining
  15. the digital money system as Facebook have announced
  16. they are launching their own digital currency.
  17. They're calling it Libra and we'll be finding a little
  18. bit more about this topic in the programme.
  19. But first a question.
  20. Now, Sam, you mentioned Bitcoin as a well-known cryptocurrency.
  21. It was in fact the first cryptocurrency.
  22. But when was Bitcoin created?
  23. Was it A 2008, B 2009 or C 2010?
  24. I'm going to say 2010.
  25. OK. Well, I'll reveal the answer later in the programme.
  26. Now, Jemima Kelly is a financial journalist
  27. and she was talking on BBC radio programme
  28. Moneybox Live about the plans for Libra.
  29. She says it's not really a cryptocurrency
  30. because it's actually backed up by a number of real currencies.
  31. So, which currencies does she mention?
  32. A cryptocurrency is normally subject to the whims
  33. of crypto markets which are notoriously volatile,
  34. whereas Libra is kept stable by being backed
  35. up by a basket of currencies,
  36. in this case the dollar, the pound,
  37. the euro and the Swiss franc.
  38. So which currencies did she say were backing up Libra, Sam?
  39. She said that the dollar, the pound,
  40. the euro and Swiss franc were the currencies
  41. that would be backing up Libra.
  42. And this is different from regular cryptocurrencies, isn't it?
  43. Yes, cryptocurrencies are completely independent of financial institutions and other currencies.
  44. And this can make them risky, can't it?
  45. Yes. She says that cryptocurrency markets are notoriously volatile.
  46. Something that is volatile can change very quickly.
  47. When it comes to currency,
  48. it means that its value can go up
  49. or down by a large amount
  50. over a very short period of time.
  51. And it's described as notoriously volatile
  52. because this has actually happened a few times in the past.
  53. Something that's notorious is well known
  54. or famous but for a negative reason.
  55. So the value of a currency going up
  56. and down in a volatile way, that's not positive.
  57. If you want to take the risk,
  58. you could make a lot of money
  59. but you could also lose a lot
  60. of money, more than you invested.
  61. So why are cryptocurrencies so volatile?
  62. Most currencies are reasonably stable.
  63. This is the opposite of volatile.
  64. They don't change a lot over a short period of time.
  65. There can be big changes, but usually governments
  66. and banks control currencies to prevent it.
  67. Cryptocurrencies don't have those controls.
  68. What Jemima Kelly said
  69. was that they're subject to the whims of the crypto markets.
  70. A whim is an unpredictable or irrational decision or trend.
  71. And if you are subject to the whims
  72. of something or someone, it means that metaphorically,
  73. you're a passenger in a self-driving car,
  74. which may decide just to drive off the edge of a cliff.
  75. So it might be an exciting ride,
  76. but it could end in disaster.
  77. Right, it's time now to get
  78. the answer to the question I asked
  79. at the beginning of the programme.
  80. Bitcoin was the first cryptocurrency, but when was it created?
  81. Was it A. 2008, B. 2009, C. 2010?
  82. I said 2010, but I'm not really sure.
  83. And you're absolutely wrong.
  84. The correct answer is 2009, so no luck for you this time.
  85. But congratulations to everyone who did get that right.
  86. Well anyway, let's round off today
  87. with a review of today's vocabulary.
  88. First off, there is cryptography, which is the use
  89. of special codes to keep computer systems and content safe.
  90. A currency is the money of a particular country.
  91. For example, in the UK we have the pound,
  92. in the US there's the dollar
  93. and in many countries in Europe the currency is the euro.
  94. Cryptocurrency is a combination of cryptography and currency
  95. and it's used for a finance
  96. system that is based on secure digital coins
  97. that are not connected to banks or governments.
  98. We then had the expression subject to the whims of.
  99. Whims are unpredictable decisions.
  100. And if you're subject to them,
  101. it means you can't control them.
  102. You have no choice but to go
  103. in the direction those whims lead.
  104. This means that the value of cryptocurrencies are notoriously volatile.
  105. They have a history of going up or down
  106. in value by large amounts and very quickly.
  107. And that's not good.
  108. Well, it might be good if it goes up.
  109. True. But if you want less risk,
  110. if you want your currency to be the opposite of volatile,
  111. If you want it, in other words,
  112. to be stable, then maybe cryptocurrencies are not for you.