Too Lazy; Didn’t Read = Everyone loves to talk about blockchain, but most suffer from FOAMO (Fear Of Already Missing Out). Capitulation is inevitable. Wealth transfer is happening now.

For me, it’s hard to forget when the Dow Jones Industrial average BLASTED through 10,000 in the Spring of 1999. I was the new guy on a trading desk at a hedge fund. To this day, I remember the significance of that. I think that memory is what triggered me when Bitcoin (BTC) was obviously going to break $10k, and I finally fell into the blockchain vortex.

I first ‘checked out’ BTC when it was $700 and decided there was no way to value it and the regulators would have to squash it. That simple. When BTC hit $7k, I got pissed off. FOAMO. During that week I was digging into understand what exactly was going on, BTC went through $10k and the story was all about price speculation. But what about the technology? I couldn’t get it off my mind and went to some respected colleagues in the capital markets for an opinion.

At the top of the market, see the following text I initiated to an old friend and veteran Wall Street Trader:

DO YOU SEE WHAT’S GOING ON HERE?

This is a sentiment that I am hearing from quite a few seasoned professionals from within traditional institutional capital markets.

I have loads of respect for this trader. He did quite a bit better than I did in the industry. If he happens to read this, I hope you know that I appreciate you and I have no judgement.

But your position on blockchain stinks.

You’re right, it’s crazy shit. Totally mental. That is pushing so many people away. Playing with rattle snakes is not for everyone.

This includes many instances of fraud, hackers, phishing, charlatans, pump and dumps, manipulation, insider trading, and even supposed computer bugs. It’s the ‘ol West.

If you are saying it is crazy because of the volatility, that is a variable, not a condition. Risk is adjusted with the level of capital commitment you put into your exposure. Of course, he knows this, but I’m sharing it out loud for anyone that vol was first thing that came to mind. In the cryptosphere, a little investment goes a long way. Be careful.

The blockchain is more than merely interesting. Putting USD on the blockchain is an absolute yawn compared to what we will see unfold in the future. In my response to him, I mentioned fraud (Enron), efficiency (clearing), and transparency (regulation). That is just the beginning.

Technology is being reborn. Blockchain has the potential influence to be an age of it’s own (The Blockchain Age); it may even leave the internet behind alongside the telephone exchange as ‘The Information Age’.

And the mention that governments are going to outlaw this stuff? This is a reasonable concern, especially if you lived through the 2008 financial crisis that resulted in the overreaching Dodd-Frank Act. But consider the technology as a potential tool, or a window that regulators could never have possibly imagined before blockchain.

LACK OF UNDERSTANDING

“I don’t like the cryptocurrencies only because, maybe I don’t understand them,” — Carl Icahn

I continually get negative reactions from everyone I ask about blockchain. I’m amazed at the repeated scoffs. Most people don’t understand the implications of an immaculate ledger or smart contracts and they don’t care to learn. They are not willing to take the time to understand it. This includes billionaire investor Carl Icahn who at least admits that he does not like it because he does not understand it. This is the type of stuff that will drive believers like John McAfee to say things like he will eat his own dick.

FOAMO

“What the fuck is a FOAMO?”

Of course FOMO is a splattered term, but I modified it a bit to explain what I think is really happening here: FOAMO.

No, it is not the new $22 holographic hair foam.

Fear Of Already Missing Out.

Here’s the thing… I had a friend tell me that as an entrepreneur, people actually want to see you fail. The reason is that they don’t want to believe that they missed a potential opportunity for their own success. We live in a relative world and as things shift, there is a reluctance for people to accept that they have missed a step up.

They don’t like it because they missed it, and for most humans, shame can be every bit as powerful as greed.

In the cryptosphere, things have shifted to the tune of $400 billion as of writing. An extraordinary figure to be sure. In fact, on January 8, 2018 when I sent my text above, we were at the top of the market at $785b and as I said I was holding my breath. I think at the time, I did not yet fully appreciate the potential value of the space and it felt too fast. Like lightning fast, and maybe need more discovery before placing bets.

Jan 8, 2018 = $785b aggregate market cap

INEVITABLE CAPITULATION

The value is coming, and the future value in blockchain will dwarf the so called ‘bubble’ we experienced. You will not be able to escape the eventual change that blockchain will bring to this world. I published another article recently on why I thought blockchain was a regulator’s dream, and they NEED to embrace it. Whether you work in government, accounting, finance, sales, manufacturing, advertising, retail, distribution, or many other industries, your world will change and every cross-party transaction will flow through a decentralized blockchain ledger. These decentralized transactions require computing power and the currency for that utility is being printed in limited supply right now as the platforms are being created.

Which platform or coin to invest in is still a gamble (maybe not created yet) and will certainly be a moving target for awhile, but this could potentially be the largest wealth transfer for many generations and it is happening right now.

The people in the world today that have secured their current wealth based on the existing economic system, will defend their wealth. They are not happy with new stores of wealth being created, and they are not happy with the existing stores of wealth being lost; in particular, enterprises that charge transaction fees for the existing friction in the financial markets WILL lose extraordinary value. That friction will be gone. They will defend their position by calling blockchain fraud, and they will defer recognition of this value creation as long as possible until they figure a way to transfer themselves safely from here to there.

There is no utility available in the cryptosphere yet. Everything is speculation. Well, maybe you can gain some companionship from owning a Crypto Kitty, but even those can be considered a medium of speculation. The market is extremely risky with many unknowns. The most obvious risk is which platforms will offer value in the future and whether those platforms even exist yet. One thing that is certain is that the future holds extraordinary value creation as a whole in blockchain.

I believe that in the future, the cryptosphere market cap will not be compared with companies like Apple, but it will be compared with the value creation from the world’s largest economies.

You don’t need to buy the future’s currency now, in fact it might not exist yet. But you will need it in the future and it will be limited supply on the blockchain.