The Blockchain Apocalypse?
Is it the end or just the beginning of a new financial revolution?
|Dec 28, 2018|
56 minutes ago from writing this, NYC exploded and the sky turned blue. Many people were afraid that aliens were coming to NYC and it is the end of the world as we know it. The airport also was completely black in LGA from power loss and we contacted the mayor directly for advise to assist in what was going on.
Although this ended up being a false alarm, it is a great symbolism of how the crypto and public markets have been this year. People have all been concerned that the price going down is truly marking the point where cryto as a whole will be decimated. Can you blame them? The market cap has been down over $100B in the past year. And many people are trying to make sense of it. Some people are blaming the fork on bitcoin cash, and others are blaming the $25,000 futures expiring on Deribit. News also broke out that one of Goldman’s most prolific bankers in the asian markets was sentenced to 10 years in prison on the charges of money laundering and taking bribes.
It also didn’t help with all the fraud and nefarious behavior that occurred in 2017 and 2018. Is it time for a refresh? And if so, how do we do it? First, let’s talk about some of the troubles we had recently to wrap up 2018.
Ex-Goldman Sachs’ banker Tim Leissner banned for life by Monetary Authority of Singapore over role in 1MDB scandal read more here, and read this amazing book that talks about how all the whales including Tim took on the biggest heist in history with the use of shell companies
Hundreds of Crypto Projects Show Signs of Plagiarism, Fraud and Improbable Returns. Read more here
Bitcoin Miner Raked in $14.5 Million in Crypto Using $3 Million in Stolen Electricity read more here
Bitman and Huobi layoff 50-80% more here
THE BEGINNING (2019)
History Rhymes and might not repeat exactly as the internet
As Peter Thiel eloquently put it, being “contrarian and right” has been the foundation for generating wealth. As all of us are investors with a different thesis, we all see our view of the world differently than others do. This helps us to make the right judgement, decisions, reduce risk, and execute. Sometimes we are right, which can return 10-20x returns or greater. The ICO market advertised 100x returns that were too good to be true and they were. With the crypto craze, the herd has said to stay away from crypto when the markets are down. However, there are still many that believe in the promise of the technology. As many of your can remember during the internet age, it wasn’t too long ago where day traders were trying to get 1000x returns similarly in the dot com bubble.
Ray Tomlinson was the one who sent the first email in 1971, and it was only in 1996 when 50% of America was using it. That means it took almost 26 years for it to be widely adopted. It will take the same or longer for blockchain tech.
Price Waterhouse Coopers believes that more institutions will be adopting the technology and investing in it in a recent article.
They also mention “A lot of elements are changing at the global level. If you look at 2018, a number of jurisdictions provided more regulatory clarity than have before. Countries from Hong Kong to Switzerland, Gibraltar to Malta…I expect many of those to take place as well in 2019.”
As noted in my last post, there are great things ahead to support the progress of blockchain technology which is inevitable and transformative to the future of finance such as the token taxonomy act and Bakkt supporting bitcoin futures. As the internet changed the information age, blockchain technology will provide the power to tokenize assets, transform financial markets, and the redefine the concept of currency as we know it.
Job Creation & Adoption
According to Forbes “A recent study from LinkedIn puts blockchain skills at the top of their list of the fastest-growing jobs over the last five years. During this time, there has been 33x growth in blockchain-related positions, exceeding artificial intelligence or machine learning. According Coingape, “According to the data provided by the research of the job site Glassdoor, a year-over-year increase of 300% in the number of jobs related to Bitcoin, cryptos, and blockchain has been seen. The growing demand for talent in the US saw a record 1,775 opened positions as of of August, 2018 in comparison to 693 at the beginning of the year and 446 similar job listings last year.“
In addition, The Islamic Corporation for the Development of the Private Sector (ICD) is developing a product that is compliant with sharia law. This will support better transparency, record keeping, cut cost/transaction times, and manage liquidity better which will also stimulate the economy and jobs.
Many of you might be familiar with the acronym HODL (hold on for dear life) which is a misspelling popular term, as 2019 is the year of building, you will hear #BUIDL more which practically means to keep building useful things.
Focused Financial Services
As we are focusing on the infrastructure in these days of building, there are critical areas that the incumbent banks can simply just break down into meaningful components without intermediaries. Banking as a whole should be modular and not an institutional entity that requires services combined; especially if they don’t add value. A modular approach of services reduces the friction that the traditional banking system poses. In 2019, we will start to see further progress of tokenized assets, streamlined loans that use bitcoin or other stable currencies as collateral. We will also start seeing more derivative products backed by crypto currencies similar as we see options in the offerings that LedgerX does. Facebook’s stablecoin will allow payments to be immediately sent peer to peer without the legacy payment processing & clearing and can be decentralized in their large network that overtakes a massive dent in the world’s population of Watsapp users. Similarly, we will see a common pattern of early technologies in fintech that simply just launch too early in a nascent space. As you can imagine, Netflix’s concept would not have worked in in the early 90s. The same is the consideration with blockchain and how it will completely transform financial services. It will be often a case where the last person who builds the tech after several failures ends up to be the winner!
We are super excited about the future.
Finally, a word about Genesis Block Holdings:
Genesis Block Holdings is a blockchain venture capital firm, crypto quant hedge fund, and mining company focused on investing in blockchain projects within the ecosystem. We are laser focused on bringing the power of capital, network, and expertise to frontier technology teams to solve the world’s biggest problems
Under no circumstances should any material on this web site be considered as an offer to sell or a solicitation of any offer to buy an interest, token or coin in any individual company or investment fund. Any such offer or solicitation will be separately made only by means of the Confidential Private Offering Memorandum relating to the particular fund or persons who, among other requirements, meet certain qualifications under U.S. federal or other international securities laws and generally are sophisticated in financial matters, such that they are capable of evaluating the merits and risks of prospective investments.