Here are some key quotes from my latest podcast with John D’Agostino, leading expert on cryptocurrency, discussing the ABCs of digital assets:

“If you ask 100 people about crypto, you’ll probably get 100 different definitions.”

“These tokens are attempts to create a store of value in some form. What they all have in common is that the way you transact, that value does not rely (and have to rely) on a centralized counterpart.”

“I’ve always been really interested in idiosyncratic asset classes and I teach a class at MIT and Columbia on idiosyncratic asset classes and how trustees and pension fund boards of directors should think about them.”

“You can’t look at this as a monolith. There are certain crypto assets like Bitcoin, where the fundamental value proposition and again, people will diverge on this. But I think – middle of the road – of why Bitcoin has value is based on number one, its scarcity.”

“A cynic would argue that you can create a derivative of [Bitcoin] that can have another 20 million or a billion or a trillion or unlimited amount of supply. But the reality is that if what you’re trading is the original Bitcoin, or trading the original version of Bitcoin, that it only has 21 million baked into it.”

“Just think about if you IPO a company, how do I know how many shares have been issued by the company in the IPO? I go back to the governing documents. And I see how many shares, number of shares there are.”

“When you create a token, instead of issuing governing documents, you issue code that controls that token.”

“The underlying value is different for different tokens.  There are certain tokens that the underlying value is the belief that the system that that token is used in will become really valuable.”

“So this notion of a scarce store value that’s easily transmittable and easily stored. Again, people who believe in that thesis, believe that the world needs that, that it’s a valuable thing.”

“Just like I would never advise anyone to buy a share of stock without understanding the underlying company, at least to a basic level. I would never recommend anyone purchase a digital asset without having done some research to understand what exactly they’re buying.”

“The reality is that most digital asset transactions occur across established exchanges, which act as you know, centralized counterparties.  Many of them allow the ability to provide a secure storage of these assets.”

“If it’s Bitcoin, or Etherium, or any of the top, let’s say five or 10 tokens, [starting to invest or trade] is about as difficult as opening up a new PB account at any of the prime brokerages.  You’ll just have to call up a Coinbase or a similar exchange.”

“The good news is that you get up to speed very quickly. There’s amazing resources online now about the nature of this underlying asset class. And then the process of getting yourself set up to trade them, to fund an account and buy the asset and hold it with a centralized custodian. That process is much, much easier than it was a year ago.”

“The notion that my seven-year old daughter, when she’s my age, will not have multiple forms of digital value – natively digital value – and will not transact in some way with some of those forms of digital value is as crazy to me as the opposite conclusion.”