Thinking North’s Cryptonight that took place on Thursday February 8th was quite a success. A packed gathering of close to 150 fund managers, brokers and high net worth investors attended, who were eager to learn more about the exciting crypto and blockchain space and about some of the companies that specialize in it. I had the honour of being the key note speaker at this event for the fourth consecutive time. I spoke both about the state of the economy and blockchain/cryptocurriences. Subsequently, 5 companies presented: Mint Corporation, ePIC Blockchain Technologies, Bullet ID, Neptune Dash Technologies and Canada One Mining.
ThinkingNorth is the brainchild of Toronto investor Steve Singh.
One of the purposes of Thinking North is to bridge the highway between the financial district in Toronto to tech savvy Silicon Valley North – my hometown of Kitchener-Waterloo. Thinking North is looking to bring Canadian tech companies into and updated market awareness arena. For more information about the Thinking North team, please click here
|As a precursor to the launch of www.Techmoney360.com (expected launch in April), I am including excerpts from my keynote speech below. I will also be speaking at the prestigious PDAC conference on the hot topic of Gold versus Crypto. click here
President Obama aptly put it, “holding Bitcoin is like holding a Swiss account in your pocket”.
If you were lucky to have invested a mere $1000 in bitcoin in February of 2010 how much do you think you would have today?
Bitcoin traded in early February 2010 at an average of $.06. Your $1000 investment would have purchased around 16500 bitcoins. At today’s price of around $10000 per bitcoin your $1000 investment would be approximately worth $165,000,000 (165 million US dollars).
Imagine if you invested in bitcoin in 2010. If you think you have missed the opportunity, the best may still be yet to come by investing in crypto related stocks.
Blockchain. What is it? What is it’s impact?
The best way that I know of to consider the impact of Blockchain is to go back to the nineties where getting your Sony Walkman was the best day of your life.
This was the time when the internet was freshly minted by Tim Berners-Lee the inventor of the world wide web. The nineties were the internet’s “toddler years”.
Of course, now, nearly 30 years later – it’s easy to see the impact of the internet and how it has changed the world as we knew it.
Comparatively, we are currently in the “toddler years” for Blockchain. This is a technology that has the same “change the world” potential as the internet did – but it’s early.
We’re still learning how to walk and talk. Cryptocurrency is its first steps.
Blockchain generally speaking, it is a decentralized database system which supplies a service that no single entity owns and has no single point of failure.
In A Letter to Jamie Dimon https://blog.chain.com/a-letter-to-jamie-dimon-de89d417cb80 it is stated: “An example of a decentralized application is Filecoin. It’s non-blockhain counterpart would be Dropbox. Filecoin enables users to store files on a peer-to-peer network of computers instead of in centralized file storage services like Dropbox or Amazon S3.”
Let’s step back for a second though. This sounds a bit too perfect. Let me assure you that you cannot argue that Bitcoin is better than PayPal. Or Filecoin which is based on blockchain is better than Dropbox or iCloud.
In fact, on almost every dimension, decentralized services are worse than their centralized counterparts:
So what is the major advantage to decentralized applications? Neutrality. They are Censorship and “hacker” resistant.
Censorship resistance means that access to decentralized applications is open and unfettered. Transactions on these services are unstoppable, because no single entity owns them – or controls them.
That’s the most significant impact of blockchain. Neutrality.
So what are cryptocurrencies?
Cryptocurrencies are a form of digital money that is designed to be secure and, in many cases, anonymous. So why is cryptocurrency so revolutionary? Because the encryption and privacy are so strong.
Bill Gates stated: Bitcoin is better than currency in that you don’t have to be physically in the same place and, of course, for large transactions, currency can get pretty inconvenient.
These currencies use powerful cryptography, the process of converting legible information into an almost uncrackable code, to track purchases and transfers. The ledger of all transactions is completely transparent – yet completely anonymous. That’s big. “Internet big”.
Cryptocurrencies have become the rage in internet businesses – especially in the past year. They are like candy to investors.
It’s easy to believe cryptocurrencies have no inherent value or the opposite, that they will disrupt banks, governments, and Silicon Valley giants once and for all.
Let me expand by stating what I believe:
Here’s a definition that seems to be accepted by both parties: cryptocurrencies are a new asset class that enable decentralized applications.
|So where does this leave us?
In the long-run, a crypto asset’s value is driven by use of the decentralized application it enables. While it’s early, the high valuations may be justified because even if the probability of mass adoption is small, the impact would be very large, so might as well go along for the ride and see what happens.
But how do we explain the recent mania?
Bitcoin and Ethereum are up huge percentages in the last 12 months. The total market cap of all cryptocurrencies is approx. $500 Billion, up from about $12 Billion just a year ago. Why? As in every mania in history, it is currently rational to be irrational. And it seems that investors just love something they can’t understand as we have witnessed in previous technology mania’s – something I’m sure we have all been guilty of (remember the “dot.com bubble”?).
I look forward to keeping you updated in this new and exciting tech and investing arena.
Dr. Kal Kotecha
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