I’ve had it. I’m tired of the nonsense we keep hearing that crypto has “no intrinsic value” because it’s created “out of thin air” or is “not backed by anything.”
It wouldn’t irk me so much if it came from folks with no experience or knowledge. But when these words pour forth from thought leaders we admire — like Bill Gates or the dynamic duo over at Berkshire Hathaway — it just goes to prove how truly advanced distributed ledger technology (DLT) really is.
So advanced, in fact, that it leaves the world’s most widely known financial experts in the dust.
One reason they’re clueless about the more advanced DLT is because all they know is Bitcoin. We agree Bitcoin has challenges. But when they say “Bitcoin,” they use it as cudgel to smack all cryptos.
They’re wrong. And every day, more major companies are jumping into DLT, confirming they’re wrong. Regardless of what they say, their actions speak louder. Even Facebook is now confirmed to be exploring different ways of incorporating blockchains and DLT into their platform.
Here’s What The “Experts” Are Missing …
First and foremost, most developers and sponsors in the open blockchain space have moved far beyond payment networks.
Second, they are doing more to unlock value in previously marginalized corners of the world than any government or charitable foundation ever could.
Third, the cryptocurrency space has spurred explosive growth in Initial Coin Offerings (ICOs).
Yes, they are unregulated and speculative. Yes, there’s much room for order and standards. But even in this early stage, thousands of ICOs are giving virtually anyone, anywhere in the world the ability to raise the money they need to fund their projects, big or small.
Did you know that, just in in the first year of ICOs (2017), their fundraising outpaced venture capital (VC) by at least 3.5-to-one?
Risky for investors? Perhaps. But the risk is offset by this critical fact: These projects rarely raise big chunks of money from large investors. Rather, they raise micro-amounts from tens of thousands of contributors. So each contributor has relatively minor exposure.
The startup gets all the financing they could possibly dream of.
The contributors (token holders) get a stake for a pittance.
And the projects get funded. Some are worthy. Some are not. But in the final analysis, it’s capitalism and entrepreneurship at its best.
In contrast, the VC model is antiquated and old. The VC firms end up doing a ton of research only to throw breadcrumbs to the startups. And still, you might argue that investors have a better chance of succeeding if they can diversify their investment across many more projects via ICOs.
Here’s where improvements are needed: Right now, there’s still no way of making the projects answer to the token holders when it comes to delivering on their promises.
But that doesn’t mean we have to go back to the old centralized model of Venture Capital. The easier — and more rational — route is to do three things:
1) Lock the funds down with a smart contract.
2) Let the community of token holders vote. And
3) Then decide whether or not to allow the startup to start using their funds.
If you think this is far-fetched, think again.
It’s already coming. And it already has a name: Distributed Autonomous Initial Coin Offering(DAICO).
And all this is just ONE aspect of the value that open blockchains are creating for the world.
Billionaires like Bill Gates and Warren Buffett need to learn how important this is.
Especially in places where access to capital markets is barely a dream.
I know. I come from a third-world country. And prior to the creation of open blockchains, I didn’t stand a snowball’s chance in hell of raising funds for a startup.
I was geographically challenged, locked out of most investment opportunities. In a country VC brokers rarely think about and never want to deal with.
And guess what …
People like me are the majority of the world’s population.
Now, this majority is gaining access. In fact, open blockchains are already doing more to connect the world to the global financial system than any other technology. Ever. Period.
But you don’t have to invest in the ICOs to profit from this. That market is indeed still risky for a larger, traditional investment portfolio.
Instead, you can invest in the crypto platforms that enable all of this. I’m talking about the platforms that allow for ICOs and fundraising to go truly global and permissionless.
Do Gates and Buffett honestly believe that these super platforms have no intrinsic value?
That there’s no intrinsic value in a global, permissionless, decentralized network that allows anyone, anywhere to connect to millions of people worldwide in order to fund a project that gives each of those participants a stake?
Ethereum was the first. But it was just the beginning.
Take NEO, for instance …
Did you know that every time someone uses the NEO blockchain and pays a fee, all NEO token holders get a share of that fee?
Can you imagine a stock that entitled you to an automatic, immediate dividend every single time the company makes a sale? Every second that goes by, your dividend account grows.
Oh, and by the way, you also can bypass custodians or brokers who hold your investments in “street name” and collect those dividends on your behalf. That’s right — the dividends are dripped into your account directly. No intermediaries.
Such is the power of smart contracts.
Or consider the EOS network …
Every EOS token represents ownership of a distributed global computer that can run thousands of applications simultaneously.
The social media sites and exchanges of the futures will be built on platforms like EOS. And as a token holder, you get to decide who runs the network. You get to decide how the profits are distributed among the community.
Directly.
Do Microsoft and Berkshire Hathaway give you those kinds of voting rights? Despite your shareholder rights, do you honestly think you have a real say in what they do with their enormous piles of cash?
Don’t kid yourself. The boards of directors are in control. They pay themselves the ridiculous salaries. You get breadcrumbs. Plus maybe a pat in the back. Very little say. Very poor representation. Virtually no chance to make a mark — even if you do attend the annual shareholder meeting.
I know, the public company used to be the best structure we had. But now times are changing. The entire “social contract” is about to evolve.
Open blockchains like EOS, NEO or Ethereum are drastically transforming the way ownership works in society.
The way wealth is distributed.
The way investors make money.
Best,
Juan
