It is wrong to think of the cryptospace uniformly, and I personally think the language is terrible - as very few are "currencies." Allow me to explain. One must think in terms of utility functions. I will start with the most basic.

1) Currency - there has always been a need for a stateless,reserve and neutral currency. Think gold, dollars, and Swiss franc until the gnomes recently lost their minds because of the Euro craziness.

Neutral State/Stateless/Reserve Currency Functions- Historically, the role has gone to the reserve currency and/or gold. You take dollars and if you don't want dollars you take gold - if you didn't want those you went to Switzerland and the private banks - until you couldn't. Just check the math of the compounded growth rate of gold over the last 119 years (3.6% per year). A inflation protection function but only over a generation. The issue now, however, is the relative size of China/US and the amount of free exchange of the currencies. There is once again a need for a neutral benchmark and gold is not really practical. The gold market today is roughly $7.5 trillion dollars. Crypto is $119 Billion. Even if it takes a generation, I don't think my kids will buy gold but they trade "VC" all day inside the video games and on the phone. Upload your neutral currency to the cloud then pick the country where you need to travel. Much better than diamonds or gold. It may take 30 years, but if it does nothing more than cannibalizes gold the crypto space would appreciate 14.6% per year at today's prices for the next 30 years. Amazon has compounded at 23% since its inception. Amazon is now 25 years old.

2) Software development supply chains - software code will do a certain amount of work (regardless of who programs it). The problem with state currencies is this - say I have sourced programmers in India and the Rupie value changes, I may shift the work to Latvia or Vietnam for no fault of the programmers. A stateless currency allows for a uniform means of payment for a uniform measure of work. It is much more democratic and free market.

3) Utility Coins - Smart contracting - if you have settled an estate lately, or own copywriters, IP, etc. I will let you figure out how to manage your digital property and deal with all your digital accounts - but a smart contract will be an executable. Practical law moved online. Title searches - $500 on a closing statement (a fraction of that a blockchain). These will trade more like commodities (up and down with supply and demand). Other way to think of these coins (software blocks that you pay to use) like a toll road, etc.

4) ICO crew - let's face it - this was securities fraud because the socialist have largely shut the public markets - in overprotecting investors capital markets are going dark to individuals (look at the number of public companies v. private equity back firms). Mr. Bogle passed today - active investors removed securities in part do to the free riding problem and over regulation. These will come back but as traditional equity positions.

5) Inflation Hedge - M1 = $4 trillion (2% inflation wipes out $100 billion a year in purchasing power). M2 = 14.5 Trillion (2%). In short, if crypto becomes the prefer inflation hedge (which once it is more mainstream accessible - watch out during the next inflation scare = I think people may be surprised at what happens.

6) Korea - crypto ran in part because S. Korea uploaded its money to the cloud - once the bombs stop - well the money came down - but you see the function and QE. The Fed got you back to neutral with the rate increases, but they won't only go up forever and they can go up when people loose confidence. Lots of foreign USD floating around out there. I foresee "official domestic currencies" and international currencies. Brexit night - British pound fell. This hurts import/export business depending on where one sits. Lots of volatility because of politicians - stateless currency pricing might become a preferred standard - like the old gold clauses.

7) Remember the forks - Google was not the first search engine. Bitcoin has forked - forks are code copies that then get developed differently - corporate spin-offs. Just something to remember.

8) Special word on Bitcoin - the price very much followed the Qualcomm pattern circa 1999. The reason I bring this up is that Qualcomm was a core technology set that the early internet, but other companies have subsequently written that infrastructure to greatness. Bitcoin might prove foundational, but others may one day surpass.

Final thought - if the top 1% hold roughly 38-40% of the wealth in the US and Crypto is $120 billion global market - you can be ultimately be in the top 1% of holders if it follows other asset patterns for roughly $1,500. You can be in the .1% for roughly 42x that or $63,000.

If the world decides dollars are not the standard - seems like a reasonably priced hedge.





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