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The “Gold Rush” needs “level heads”

When gold was discovered in California in 1848 more than 300,000 people rushed west to stake their claim. This quickly became a totally lawless venture with, however, only a minority of miners making much money from the gold itself. It was much more common for people to become wealthy by providing the miners with over-priced food, supplies and services.

I couldn’t help noticing two things; first, that there was a total lack of regulation of claims and the related ephemera and, two, that there was money to be made in the infrastructure surrounding the “product” itself.

This reminds me greatly of the current blockchain and cryptocurrency revolution that is creating such an upheaval in finance and trading.

When I first started trading FX in the early nineties, the market was to all intents and purposes self-regulating. It was peopled by honourable people whose trade association motto was “my word is my bond”. It is probably too much to hope that such sentiments could permeate the burgeoning crypto revolution, but equally, it mustn’t be left to “caveat emptor” (buyer beware) since there will always (in today’s environment) be unscrupulous (and worse) operators looking to take advantage of the blind panic of those concerned about missing the boat.

It will pay to be selective.

Not every token issue will be a raging success that is obvious, but it is the motives of the issuer that will need to be investigated thoroughly in order that another bubble doesn’t burst. One thing that should be remembered is that although the dot com bubble did burst it still survived with the strongest, most clearly thought through business surviving, then thriving.

In the nineties when the dot com bubble was at its peak, the whole raison d’etre of a start-up became blurred. It was like starting a courier company in the Antarctic simply because you own a snowmobile! A business needs a USP and a hook to be successful not simply jumping on the bandwagon of “look at us, we have a website” or in today’s parlance “look at us we are issuing a token to fund or business. We have no idea what that business will do, what its target market will be, but at least we are “hip and happening””.

Bitcoin has become the Kleenex or Hoover or Band Aid of cryptocurrencies. When the uninitiated talk of this new market they use Bitcoin as the new catchall. I have read as many reports that bitcoin will be up at around $50k this year as I have that it will be below $2k.  I have to say that there is absolutely no basis for these views. How can there be? There is nothing to base any judgement on as far as valuation of ANY token or currency is concerned there that in the case of the underlying business that the token was issued to fund.

If it’s not Brexit, it must be Donald!

It is almost impossible not to become hysterical about the performance of the 45th President of the United States.

He is single handedly dismantling the entire fabric of a nation.

Spoiler Alert!

In Sam Bourne’s thinly disguised novel “To Kill the President” in which the name of the President in the title is never revealed, two of his senior aides try to intervene with his doctors to have him declared unfit for office.

Unfortunately, that is not going to be an option, since he has already been passed fit at his annual medical which took place this week. In the book, another aide who is totally committed to the President’s views arranges an assassination attempt to boost his popularity.

Donald Trump has this week managed to alienate almost 50% of the world’s population by describing most of Central America and the whole of Africa as “Shitholes”. It is impossible to emphasise in strong enough terms what that does to the entire premise on which the Constitution of the United States is built. The inscription on the Statue of Liberty reads “Your huddled masses, yearning to breathe free, the wretched refuse of your teeming shore, send these, the homeless, tempest tost to me, I lift my lamp beside the golden door.”

Enough said!

The “Gold Rush” needs “level heads”

When gold was discovered in California in 1848 more than 300,000 people rushed west to stake their claim. This quickly became a totally lawless venture with, however, only a minority of miners making much money from the gold itself. It was much more common for people to become wealthy by providing the miners with over-priced food, supplies and services.

I couldn’t help noticing two things; first, that there was a total lack of regulation of claims and the related ephemera and, two, that there was money to be made in the infrastructure surrounding the “product” itself.

This reminds me greatly of the current blockchain and cryptocurrency revolution that is creating such an upheaval in finance and trading.

When I first started trading FX in the early nineties, the market was to all intents and purposes self-regulating. It was peopled by honourable people whose trade association motto was “my word is my bond”. It is probably too much to hope that such sentiments could permeate the burgeoning crypto revolution, but equally, it mustn’t be left to “caveat emptor” (buyer beware) since there will always (in today’s environment) be unscrupulous (and worse) operators looking to take advantage of the blind panic of those concerned about missing the boat.

It will pay to be selective.

Not every token issue will be a raging success that is obvious, but it is the motives of the issuer that will need to be investigated thoroughly in order that another bubble doesn’t burst. One thing that should be remembered is that although the dot com bubble did burst it still survived with the strongest, most clearly thought through business surviving, then thriving.

In the nineties when the dot com bubble was at its peak, the whole raison d’etre of a start-up became blurred. It was like starting a courier company in the Antarctic simply because you own a snowmobile! A business needs a USP and a hook to be successful not simply jumping on the bandwagon of “look at us, we have a website” or in today’s parlance “look at us we are issuing a token to fund or business. We have no idea what that business will do, what its target market will be, but at least we are “hip and happening””.

Bitcoin has become the Kleenex or Hoover or Band Aid of cryptocurrencies. When the uninitiated talk of this new market they use Bitcoin as the new catchall. I have read as many reports that bitcoin will be up at around $50k this year as I have that it will be below $2k.  I have to say that there is absolutely no basis for these views. How can there be? There is nothing to base any judgement on as far as valuation of ANY token or currency is concerned there that in the case of the underlying business that the token was issued to fund.

If it’s not Brexit, it must be Donald!

It is almost impossible not to become hysterical about the performance of the 45th President of the United States.

He is single handedly dismantling the entire fabric of a nation.

Spoiler Alert!

In Sam Bourne’s thinly disguised novel “To Kill the President” in which the name of the President in the title is never revealed, two of his senior aides try to intervene with his doctors to have him declared unfit for office.

Unfortunately, that is not going to be an option, since he has already been passed fit at his annual medical which took place this week. In the book, another aide who is totally committed to the President’s views arranges an assassination attempt to boost his popularity.

Donald Trump has this week managed to alienate almost 50% of the world’s population by describing most of Central America and the whole of Africa as “Shitholes”. It is impossible to emphasise in strong enough terms what that does to the entire premise on which the Constitution of the United States is built. The inscription on the Statue of Liberty reads “Your huddled masses, yearning to breathe free, the wretched refuse of your teeming shore, send these, the homeless, tempest tost to me, I lift my lamp beside the golden door.”

Enough said!

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