The dream of a golden crypto-currency future copped a serious blow this week.
Around 2004 I was presented with an opportunity.
It was a special ‘insider’ offering into a plucky American start up. They had a radical idea – to create a site where people could upload and share videos with each other, over the internet.
I turned it down.
I don’t really remember why. It all seemed a bit risky. The technology was new. They didn’t have a clear direction for how they were going to monetise the service. So I knocked it back.
Was it a mistake?
Hardly. The company went belly up after about 18 months. I would have lost everything.
This company wasn’t YouTube. It was one of about a hundred companies aspiring to be YouTube at the time.
YouTube just won the race. I don’t even think they were the first to get their product to market. But with three of PayPal’s exec’s at the helm, they were able to scale rapidly, until they became the dominant player in an ecosystem that was only ever going to support one player.
It’s one thing to have a million dollar idea. It’s another to have a million dollar business.
And so when I was presented with that investment opportunity back in 2004 or whatever it was, I had no way of knowing if they had a good business. They had a good idea, sure, but beyond that, I just didn’t have enough info to tell.
And I don’t like to take risks with my money. So I knocked it back.
It’s the same story with all the crypto-currency stuff.
Someone asked me my opinion about it the other day. Sure, I get the power of block-chain. I get the revolution it has the potential capacity to deliver. It could be a whole new ball game.
But what is it going to be? Which “coins” are going to dominate the market? We hear a lot about Bitcoin and Ethereum, but there are hundreds of crypto-currencies out there.
Like, did you know there’s a thing called ‘Potato Coin’? This one aims to become a unit of currency for poor African farmers (a noble aim).
Or what about ‘Wankcoin’? (Seriously, I’m not making this up.) This is designed to help porn-enthusiasts support their industry.
Someone has even launched ‘Ponzicoin’ – and people are actually buying it.
The whole alt-currency world is very weird. And as far as I can tell there isn’t a way to buy an exposure to block-chain currencies at a concept – you have to invest in individual coins.
It’s like in back in 2004 – if I could have invested in the concept of video-sharing over the internet, it would have been a no brainer. The need was obvious, and technology was certainly heading that way.
And you would have made a motza.
But you can’t invest in concepts. You can only invest in companies.
And that introduces a whole lot of complexity and uncertainty.
And they’re concepts I just don’t like to see attached to my investments. I’m a simple guy at heart.
Anyway, there was some other news this week that has made me rethink the whole crypto currency proposition.
Yep, one of the largest investment banks in the world, and depending on what conspiracy theory blog you subscribe to, is responsible for AIDS and faking the moon-landing. They’ve just brought out their own currency.
They’re calling it SETLcoin, and it aims to help parties settle share transactions. There’s a niche here. Currently it can take up to three days to settle a share trade. SETLcoin will make it instantaneous.
I was excited about crypto-currencies when I thought they were being built by 14-year old Japanese boys in their bedroom on retro-fitted Sega-64. But if we’re talking about one of the wealthies banks in the world?!?
That’s an entirely different story.
But I guess when you step back and look at it, it was always going to go this way wasn’t it? Money is power, and the powerful aren’t just about to let money get ‘democratised’ out of their control are they?
To be honest, I’m feeling a little deflated today.
I feel like it’s similar the revolution going on in the media. Traditional newspapers are dying. Their readership is too broad, their business models obsolete.
But rather than getting agenda and vested-interest free micro media – media created by the people for the people – we’re getting fake news. We’re just getting BS.
Apparently a bunch of those fake news sites in the last US election were just built by bored kids in Serbia, just looking to make a buck.
And crypto-currency, rather than democratising money, could just be about to concentrate it in hands even less accountable than our governments (low bar I know).
That’s not going to be an improvement.
And as strange as it is to say, I think I prefer a government controlled money to money controlled by Goldman-Sachs, or whatever global financial powerhouse it ends up being.
Suddenly, I’m pro-government?!?
Oh dear, oh dear.
Turns out that revolution I was waiting for… well, looks like it’s going to be a little further off than I thought.
It’s enough to drive a man to drink.
What does the crypto-currency future look like to you?