A decentralised business is better for you

The background of a magnificent city

Let’s start by looking at Equifax. This is a U.S. company, and one of only three, that provides credit reporting on American citizens. Last year there was a massive security breach, which meant that the personal information of at least 143 million was in the wrong hands.

The problem here is that your personal data is centralised when these big credit-rating companies have it, and that means it can be manipulated; by them or by other parties through theft.

If Equifax stored consumer data on a blockchain-based system, the information would not only be better protected, the company itself wouldn’t be able to mess around with it in any way.

The blockchain uses cryptographic hash functions that both encrypt your data and track historical changes to it. Therefore, at any point in time, if any piece of your data is tampered with, you personally will be able to immediately see where and when the information was changed.

However, security isn’t the only advantage decentralised storage of data can bring. The communities using decentralised ledgers are incentivised to show more respect and this contributes to more efficient operations.

The incentive of having a stake in the business

Some platforms, especially those decentralised ones that have utility tokens, engender a sense of community, because every person involved has something to gain by making sure the platform runs for the benefit of all. It also means that they literally have a stake in the company just through token ownership. Also, all the community members can see how a platform uses their personal information and the steps taken to protect it.

There will always be bad actors in any company, and sharing economies are no different, although you’d think that in this particular sector, people are less likely to take advantage of other community members, but we’d be naïve to believe everyone really gets the idea of ‘sharing’. However, in decentralised communities, any bad actors are actively disincentivised, because if things go well, the stakeholders all benefit. If a bad actor contributes to making the company less successful, then they are shooting themselves in the foot.

If you take the example of Uber, which is s centralised company; none of the Uber drivers have a stake in it. They have no incentive to act in a way that makes the company more successful, because all the benefits of success go to the founders and shareholders. If Uber was a decentralised business, with drivers having some form of stake in it, it would be a very different story.

We may see an increasing demand for companies to adopt a decentralised approach, because ultimately it benefits the consumer, and they could be the driving force that increases the use of a new decentralised business model.

 

 

 

Fundstrat bullish about Bitcoin for 2019

KryptoMoney.com-Bitcoin-price-64000-Fundstrat-Tom-Lee

Fundstrat Global Advisors, co-founded by Tom Lee, has just published a report claiming that Bitcoin prices will reach $36,000 by the end of 2019. How has it arrived at such a bold prediction? Fundstrat says the answer is mining costs.

Fundstrat’s Quantamental Strategist, Sam Doctor, analysed the relationship between Bitcoin mining costs and price, to come up with the prediction that the price range will fall somewhere between $20,000 and $64,000 next year.

He based his calculations on a Bitcoin Price to Mining Breakeven Cost Metric, known as P/BE, which he claims has “proven a reliable long-term support level.”

A statement from Tom Lee, published on Twitter, said: “We expect the mining economy to grow over the next several years, and project a BTC price of ~$36,000 by year end 2019 based on the historical average 1.8x P/BE multiple.”

The Twitter statement also points out that the rise in electricity costs is slowing and use of power is becoming more efficient as larger rigs with a higher hash power per watt, are now appearing. Plus, mining operations are getting bigger, bringing the benefits of scalability to the scenario.

However, he did point out that there was one risk to the prediction: “a material shift in the trajectory of hash power could change the P/BE support level of BTC price.”

It is interesting that Tom Lee’s personal prediction for BTC was $25,000 by the end of 2018 and both Lee and Fundstrat have been bullish about BTC this year. They also issued a statement in April, saying that 82% of institutional investors believe the price had now bottomed out.

If you own BTC and both Fundstrat and Lee are correct than it will be worth holding on to them for some time to come.

 

 

 

 

 

 

Crypto tribes threaten power of unity

earth-2254769_960_720

The crypto sphere is becoming a little like a football league table. Owners decide to give their allegiance to a particular ‘team’: let’s say Bitcoin is Real Madrid, and that’s your main team, and your friend likes ETH, let’s call it Arsenal. However, is being part of the Bitcoin fan club, and therefore competing with ETH supporters a healthy way to develop the potential of cryptocurrency?

People have a tendency to take a ‘tribal’ approach to pretty much everything, from dietary choices, to coffee brands, to football teams. But, it isn’t very helpful for crypto. Here’s why.

The cypherpunks had a beautiful idea

Privacy, free speech, and the ability to act as an autonomous individual are increasingly under attack, but decentralisation can protect these. Let us not forget that blockchain technology arose out of a community of cypherpunks who wanted more freedoms. Yet, it looks as though the crypto community now is just going to bow its head to the centralised institutions and retreat into the same old narrow-minded worldview.

As Kent Barton describes it in Medium: “The prevailing question has insidiously morphed from “how can we make the world a better place?” to “how can we defeat other blockchain platforms?”

He also argues that tribalism in the crypto sphere, “distracts the community from the crucial work of building scalable technologies that people will want to use.” And he adds, “Personal attacks and outright trolling make the environment uncomfortable or even untenable for newcomers.”

Social media channels have developed an “Us vs Them” discourse and influencers, like rocks stars, with their adoring fans fight it out with other influencers for the Top Dog spot.

Let’s show some respect

Measured and respectful discussion about the merits of various cryptocurrencies have been replaced with increasingly emotions attacks form the ‘opposition.’

Bartons says: “To an outsider, it must seem ludicrous to watch countless smart minds working on blockchain technology — developers, entrepreneurs, and other enthusiasts gifted with an ability to think outside the box and see a vision for a better future — descend into internecine bickering.”

And all the while the team battles are at the forefront of activity, the less time is being devoted to advancing the blockchain, and it is probably fair to say that this boils down to it being all about the money; not about cryptocurrency itself, but making millions and billions of fiat currency out of cryptocurrency. And that takes everyone back to the status quo before the blockchain emerged as tool for a real revolution that could make the world a better place and take power away from those who have had control of it for too long.

Say goodbye to the zero-sum game

Tribalism in crypto, particularly the desire to see one platform emerge as the winner at the expense of another will mean that we continue to be the slaves of power-holders, rather than channelling the power of the blockchain so that the people can reclaim power for themselves – at least some of it.

We will miss this opportunity by only supporting one team – it’s time to be an O.G. crypto fan and support the whole blockchain ecosystem rather than continue this zero-sum game.

 

 

 

Is the crypto market history repeating itself?

1_44y-gHFOTuPUMnqBV84qeg

At the turn of the twentieth century, Jesse Livermore wrote a book titled “Reminiscences of a Stock Operator.” It’s about his life as a trader. One of the things he said back in 1900 was this:

 “When you read contemporary accounts of booms or panics the one thing that strikes you most forcibly is how little either stock speculation or stock speculators to-day differ from yesterday. The game does not change and neither does human nature.”

And he also wrote: “I used to think that people were more gullible in the l860’s and ’70’s than in the 1900’s. But I was sure to read in the newspapers that very day or the next something about the latest Ponzi or the bust-up of some bucketing broker and about the millions of sucker money gone to join the silent majority of vanished savings.”

Doesn’t this sound familiar? It does to me. It’s pretty much what people are writing about the cryptocurrency market. It’s a bubble, it’s a Ponzi scheme, it’s another boom and bust.

But the most important point he makes is this: that the game doesn’t change and neither does human nature.

The derivatives market provides us with a good example of the sameness between what is happening in crypto now and markets of the past. A derivative is “an arrangement or product (such as a future, option, or warrant) whose value derives from and is dependent on the value of an underlying asset, such as a commodity, currency, or security.” Derivatives trading has been around since ancient Mesopotamia. For example, a tablet from 1809 BC documents a Mesopotamian merchant borrowing silver, promising to replay it with sesame seeds “according to the going rate” after six months.

The Briitish South Sea Company of 1711 led to a wave of new joint-stock companies with dubious business plans that created one of the first bubbles, alongside the Dutch tulip fever.

What emerged from this was the realisation that derivatives, and now the crypto market, need governance and regulation. Self-policing must be encouraged, and work in tandem with government-enforced rules. Bad actors must be kicked out of the market, just as they were in early days of the London Stock Exchange.