About a year ago, I was having dinner with family and friends, explaining the work I am doing in blockchain and cryptocurrency at Brave New Coin. My mother, in her mid 80s, asked if she should be buying Bitcoin as part of her retirement savings – I suggested she talk to her financial adviser first….Then, late last year, the Wall Street Journal made a splash with a front page headline: Bitcoin Mania: Even Grandma Wants In on the Action. This was just after the price of Bitcoin broke through US$10,000 for the first time, as part of its year-end rally after a year-long bull run. Of course, since late November, Bitcoin has gone from $10k to $16k, back down to $13k, back up to nearly $20k, then back to around $10k, before falling further to as low as $6k, while recently “stabilising” between $9k and $11k.
It wasn’t just cryptocurrencies (or even CryptoKitties) that were getting the hype and the headlines. An American soft drink company saw its stock price soar when it changed its name to Long Island Blockchain Company, and announced plans to invest in cryptocurrency mining technology. Amid some backlash (and SEC action against similarly motivated name changes), those plans have since been modified.
Just last week, I received an e-mail from a financial planner in regional Australia:
“I’m a 30-year veteran of the financial industry. I’ve just returned from the Annual Self Managed Superannuation Fund conference where it was evident the industry is treating crypto like a new little toy. Most wish to sound intelligent about what it is, but over 98% have no idea. When asked, the speaker from ASIC fobbed it off as a high risk area, and moved the topic to Investment property….”
He went on to explain how he didn’t just want to help his clients understand how to invest in this new asset class; he also wanted to leverage the underlying blockchain technology to improve his financial services practice, and offer better solutions to his clients.
If blockchain technology is good enough for the ASX, then it should be good enough for the individual investors whose share portfolios are traded, cleared and settled (either through their brokers, or via their superannuation funds) on the ASX itself.
Which was a key point made by Rick Klink, founder of OpenMarkets, during a presentation at a recent Startup Grind event: why shouldn’t his business take advantage of this new technology, and the new assets it is creating, to reduce customer transaction fees, streamline trading processes, and enable portfolio diversification.
Once you cut through the noise, there are examples of companies bringing scalable and real-world blockchain solutions to market that benefit a range of industry sectors, from supply chain logistics to biotech research, from agri-product provenance to IP registration and tracking. 2018 could be the year when the hype becomes reality.
Next week: Startup Vic’s Professional Services Pitch Night
Everywhere I look, I see applications of Blockchain, although I concede up front to my limited understanding.
Seems to me however, that ‘currency’ is just the bubble that needs to burst before the real work can start.
Some of us have memories of the ‘Tech Bubble’ of 1999, all the hype and bullshit around soaring valuations of ‘vapourware’, A lot lost money, a few made squillions, but of the ideas that emerged and flopped, many have come back as solid businesses, albeit in a revised form.
I suspect history is repeating itself.
No doubt some projects will fail (natural selection…), but the overall case for Blockchain and Digital Assets (cryptocurrencies, tokens, etc.) is sound. Hopefully we have learned from history (dot.com as well as GFC….).