Will Blockchain Fail? Is this just one big joke of an experiment? Which segment of the ecosystem are you talking?

mrees999
By mrees999 on Sun, Apr 15, 2018 - 1:05pm

Greetings Blockchain students. I'm going to introduce an eight-part series to give you insight into the world of blockchains. Sadly, I still see many people are still suspicious of the new asset class mainly because they have too little understanding.  This emerging asset class is tough to followas we are still in the beginning stages of what some people call the "Cambrian explosion" of new technologies creating entirely new family trees of technology branches. As we cover these new family trees, keep in mind almost all of this was science fiction three years ago. Even when I started this new group on Peak Prosperity - most of what I cover here was created AFTER this blockchain section began.

These ideas and concepts are just some of the things I go over with my students in our special HODLER community.  You might be surprised at how many of our wonderful Peak Prosperity members are also firmly planted in our humble blockchain community as well. The two fit hand-in-hand. Rather than write a book, we keep an active and live community. This space moves so quickly that any book that is written is out of date in six months and is in danger of being completely irrelevant in only a year's time. 

Let's go over some of the different segments in the blockchain eco-space. Yes, there is an entirely new ecosystem emerging.  It's not just an asset class, and we are WAY beyond cryptocurrencies. I've broken down a great infographic - that although incomplete and very high level, is an excellent place to start a discussion. 

The first category is the actual "currency" use case.

There are several currencies and more being built\forked all the time. They come in three distinct use cases. Some digital tokens that you might have thought were currencies like Ether - actually aren't currencies at all. We'll get to that a later date. Bitcoin is the most significant digital cryptocurrency most people have heard. But the emergence of specialty payment protocols is now starting to get traction.These will make it faster, cheaper and easier to do cross-border payments and some can have smart contracts do work that humans do now. It will cut costs and will change banking forever. New technology will be released in the next couple of months that will boost transactions per second into the thousands, later this year more technologies that are on test networks might boost this number into the millions of transactions per second. Orders of magnitude more than all credit card and banking transactions put together. Some of these newer layer tokens have working companies lined up to use them out of the gate.

Then we have privacy coins. These offer the common man a bazooka against government-issued fiat. These have different levels of traceability and are still being developed. They are largely untraceable - for good or bad, depending on where in the world you live, and how much you trust your government with its monetary policy.  Whether governments like it or not, they are here to stay - but they might be driven more underground as governments begin issuing their central bank digital tokens by fiat. It's within the realm of possibility that some totalitarian governments will try to outlaw the tokens - likely on par with the level of corruption. This movement will likely begin in banana republics on tin-pot dictators before working its way up the chain. Always starting at the margins of society as the 1% like the old system the way it is.

It would be a mistake to consider that if these are to be made illegal or outlawed that they will go away. Forbidden fruit taste that much sweeter and the black market thrives under such pressures.  They can't stop these units as each unit contains its own DNA of the entire network - there is no way to take out the DNA of every token in existence on a peer-to-peer world network.

Some people mistakenly argue that they aren't 'real currencies' because they believe one must have to trade them back for dollars or another fiat to do commerce.  That is not true. Many people accept these as payment in full. I've personally purchased good and services, including legal fees, many times using bitcoin and other cryptocurrencies.  These tokens currently don't necessarily act great as a reliable short-term store of value, but history has proven they are the BEST form of money for saving if your timescale is a year or more. Also, if one is making payments in other parts of the world, it can enable transactions that might have taken days in the current system to a few minutes if you are paying somebody that can't \ won't take credit cards.  

Unlike all other fiat currencies, the coins increase in value (when used as a long-term savings instrument), and studies have proven the younger generations trust these FAR more than governments. As our demographics shift from the older generations that are usually technology weary, and suspicious of new ideas \ paradigm shifts, the old ways will give way to the new ways in the next couple of decades as the younger generations take charge.

Coping with this huge paradigm shift will likely be a constant struggle with our older folks and those of us that still put all their hopes and dreams into the precious metals as we've been taught for years.  Although the key insight of money off the grid and not issued by fiat - gives the early leap of understanding the correct framework for these folks helps cross that chasm into the world of crypto. These young kids are getting it quickly after seeing what their parent when through with the last banking crisis. They sense something is going to change. There are hard-numbers for this that I will get into on a later post.

 

There are still seven major categories to go. Many of those are broken down into several sub-categories. Please give comments or suggestions as we go through this. I like having feedback. And hey - free education for you! Just a little plug, you can learn more at blockchainlead.com

That's it for now. - Thanks for reading.

Mark Rees

 

 

12 Comments

New_Life's picture
New_Life
Status: Gold Member (Offline)
Joined: Apr 18 2011
Posts: 259
Balanced Education

Hi Mark,

Appreciate you taking the trouble to do this series, many will be looking forward to a deep dive to get details and hear a balanced view, weighing up all sides and perspectives.

Even more looking forward for any assertions to be evidenced based, let's all pick apart the supporting data to see how robust any viewpoint is.

Hoping Chris and Dave can keep probing and offer their terrific insights.

To start us off here's a couple of points that I'd be grateful for clarification on..

One item I'd pick up on is the concept of Digital Assets being off-grid like PM's..

"Coping with this huge paradigm shift will likely be a constant struggle with our older folks and those of us that still put all their hopes and dreams into the precious metals as we've been taught for years. Although the key insight of money off the grid and not issued by fiat - gives the early leap of understanding the correct framework for these folks helps cross that chasm into the world of crypto."

Maybe I'm misquoting, but the phrase "Off the Grid" struck me as slightly inappropriate, as all of the cryptocurrencies require a good sustainable source of electricity to mine or transact, just like any credit card payment. The difference with PM's you physically hold in your hand is all the energy required to produce and transact has already been used.

Also given that there's been less demand for your blockchain lead courses recently, is that just from "Older folks"?

When you get a full class, what's the demographic split like, & what % of their investable income/savings are the millennials risking on these new unpredictable and extremely volatile assets?

It's hard to say they are a good store of value when it changes so much on a weekly basis.

Just imagine a millennial accepting BTC for selling a car or a house in mid December...

Do you ever see the value stabilising to a steady sustainable increase?

How concerned are you with the level of manipulation, that in itself relates to my earlier off the grid comment, if big institutions are involved in futures and manipulation their value is still very connected to the old system and ripe for fraudulent activities associated with the grid.

What do think the NYC Attorney General will do regarding the crypto exchanges he is now investigating?
http://uk.businessinsider.com/new-york-attorney-general-launches-an-inve...

And again thanks for your open approach in accepting friendly challenges and requests for evidence, we all learn much more operating in this way.

mrees999's picture
mrees999
Status: Gold Member (Offline)
Joined: Aug 16 2013
Posts: 388
Balanced eduction answers

Hi New Life, thanks for the questions. It’s a great opportunity to clarify and strengthen my positions.

 

Being off-grid clarification.  Some people may have deduced that my use of the word off-grid may have been used as is common with other uses as if being ‘off – grid’ for electricity or internet. They way I intended to use it was to be off the banking grid. As crypto are not issued or controlled by bank, the ‘banking grid’ runs outside the world of crypto.

 

The advantage of the Peak Prosperity group is that they generally know how money operates when outside of the banking system as it relates to precious metals. Hopefully you can see that connection and will move it out of your ‘inappropriate’ column.

 

Demographics of students.  As I’m retooling the class to make it two or more days as per some suggestions, we’ve held off on holding classes until we have the new format down – but while we are at it, we have found our audience to skew to the ‘over 40 Crowd” My own ballbark number would have 70% of student over 40 (But we don’t ask ages in our enrollment). I would also surmise that at least 30% are over 60.  Compared to stats reported in other sources, the typical crypto person outside of our educational course skews very tightly younger.

 

Here’s a link to a recent study by “Finder” of the typical USA purchaser of cyrypto published just last month: Although the sample size was very small at only 2,000 residence it potentially could shed some light on who is staying out for now

 

https://cointelegraph.com/news/how-many-americans-really-own-crypto-skewed-results-of-polls-and-surveys

 

Highlights – 92% of the USA has never purchases crypto. Only 8% have current plans to do so in the future.  Sound like a bubble??

 

I’ve averaged the numbers below as they were answered by men and women separately:

 

About 40% of people think it’s too hard to understand or use.

About 35% think it’s too high risk

40% don’t think it’s needed.

20% think it’s a scam.

 

The millennial generation is 8x more likely to purchase then Baby boomers and over twice as likely to buy than millennials. So it seems my niche is the older crowd and we spend more time making it more simple to understand. But as I mentioned, there is more work to do on that front as repeated exposure is necessary and we allow people to take the course again for a significant discount and more than half choose to do that.

 

We don’t ever ask percentages of investable income or their plans. We encourage to start out very small until they get their ‘sea legs”. We also advise repeatedly that they should never invest any more than they would lose sleep over. Out final advice is to take a long term approach. We are looking 5 to 10 years out. We HODL – and do not trade into and out of positions. This strategy HAS proven to be BY FAR the best longer term store of value in modern history. We’ve done…Very, Very, Very well.

 

If people go against our education and attempt to buy and sell for any purchases (include the car in your silly example) they would be going against everything I teach them.

 

Value will somewhat stabilize as more people get into the market. This includes the massive foundations that are now beginning to invest. That doesn’t mean the price will level out anytime soon, I think this wealth transfer will go on for decades. Many industry experts and advisors are making calls (Tim Draper is one) calling for btc at $250,000 by 2022. He’s been accurate on his previous predication and isn’t accidental a billionaire.

 

Fraud and manipulation are expected as this is still the wild west. Hense all my warning and advice to just Hold On For Dear Life. As the most explosive and promising new technologies it has proven time and time again that you have to be committed to the long term and have a strong stomach-  it isn’t for everybody. The latest announcement means nothing to me. I’ve been around long enough to see hundreds of these coming from people all over the world. Yet the price of btc has still gone from 0- to a high of nearly 20k, and it’s bounced all the way in irrational waves based on the trademark panic and euphoria that defines the exciting asset class.

 

For more views on the demographics and shifting attitudes as the new millennials and Gen Y come of age, see Wall Street advisor and blockchain researcher, Tim Lee’s fascinating speech as he has worked the numbers to understand the demographic changes coming up and their title-wave of expected use of these new technologies. Our exclusive HODLER community that has partly been the topic of the last three -part weekly broadcast to know what it means for us and to make plans now to profit from it.

 

 

In short, we aint seen nothing yet.  Thanks for the dialog.

Mohammed Mast's picture
Mohammed Mast
Status: Silver Member (Offline)
Joined: May 17 2017
Posts: 126
BTC

I have been in BTC going on 8 years. What got my attention was not the opportunity to make millions . What got my attention was the chance for humanity to free itself from the bondage of fiat currencies and the central banks. 

BTC was conceived to do just that in the wake of the meltdown of 08 and the subsequent mega theft (bailouts). Unfortunately it has now become nothing more than an investment vehicle for speculators who could care less for its ethos. There are now futures markets, hedge funds, etc.etc.etc. I remember land in Costa Rica being sold for BTC.I remember a guy who sold his Porsche for BTC.It was actually being used as a currency. It was used by anarcho - capitalists. It appears they now comprise a tiny percentage of the ecosystem.

One would have thought that here of all places (where there are daily rants about the central banks) that many would be championing crypto as a path to freedom. Surprising and disappointing that it is reduced to a commodity explained in charts.

New_Life's picture
New_Life
Status: Gold Member (Offline)
Joined: Apr 18 2011
Posts: 259
Crypto not to be used for big transactions?

Hi MM,

Yep I agree with you about it now being mainly a speculation vehicle, However Mark and many others are okay with that though. I doubt that BTC is hardly off grid whilst still massively influenced (manipulated) by the old traditional banking institutions, wash trading and Tether.

I feel BTC has been reduced to charts because of the way the public and institutions have adopted it. It's naive to ignore the basic human desire to build a comfortable secure future. Many folks from PP in Marks group are there for the potential to exchange future crypto profits for a more resilient life for themselves and take care of their families, myself included. This is something I am certainly not ashamed of.

Interesting to see the huge demand for BTC in Venezuela this week. Clearly for those poor souls it offers hope of freedom that you mentioned.

I too would of expected that it would make sense to use a Crypto Currency for transacting major assets and smaller ones for that matter, otherwise why bother with the lightening network?

Mark, thanks for the very detailed reply, I liked the demographic article and Tom Lee's sober & seemingly calm considered opinions.

Grateful if yan you help me out with my "Silly Example", so which Crypto Currency should people use to transact with to buy a car or a house?

ps you may want to refrain from using such dismissive terms, it rarely leads to constructive engagement and it probably does not appeal to your target audience that I assume you hope are reading this and you would like to sign up to take your courses.

You can bet there's a ton of more "Silly Examples" and "Silly Questions" out there for new folks at your blockchain classes,, I suggest it would be wiser to be kinder to them.

I like to remind myself that regardless of experience, none of us are total experts here, we all make mistakes in our judgements and I hope we are all still seeking out new data as this space evolves and keep learning from each other.

Mohammed Mast's picture
Mohammed Mast
Status: Silver Member (Offline)
Joined: May 17 2017
Posts: 126
Precisely

Thanks for making my point. Yes the opportunity to make oodles of money is very seductive. Yes you will be able to finance your resilience. Yes you will still be part of the system that keeps you a serf.

In answer to the original topic "will blockchain fail"?  No it will not fail. As a matter of fact as far as the current system is concerned it is the most revolutionary technology since the internet. It will touch every aspect of everyone's lives. Unfortunately it will be controlled by Wall Street, the too big to fail banks, central banks and governments. 

The blockchain will continue but Satoshi's dream is an epic failure. The cypherpunks  have been pushed out and BTC is now nothing more than another asset class in the machine no differnt than gold , wheat an o0ptions. 

I am reminded of the funeral in San Francisco in I think 67 when the people buried "hippie " and with it the counterculture of the 60"s. The lesson to be learned is th elite don't have to regulate cryptos out of existence they just have to co-opt it. That is apparently a fait accompli. Enjoy  your wealth.

mrees999's picture
mrees999
Status: Gold Member (Offline)
Joined: Aug 16 2013
Posts: 388
Dont give up. The dream of a crypto revolution is not dead.

It is easy to be swayed into thinking that the crypto revolution is dead. A lot of the cult-like anarchist of the cypherpunk generation have gotten wealthy which tends to mellow out their Anti-system nature and perhaps they've now succumbed to the seductive nature of wealth.

Many people climb the ladder of success and then wish to push it over. Many dictatorships begin with honest intentions before going corrupt. But we are perhaps judging the effort through relatively successful western world point of view.

A twitter post a few months ago by Vitalik, lead of the ethereum project is a man of principal when he reminded the crypto world they haven't accomplished what the movement set out to do The crypto world had just first crossed a half trillion market cap when he wondered out loud how many Venezuelan have been rescued from their failed government. The promise of cryptos hadn't yet saved them.

He went on with several more reminders for the community to put their heads down and keep working despite the new wave of millionaires in the crypto circles. We should gravitate to that kind of leadership. Looking at the wall street and traders point of view soon turns shallow. Some might get rich but then what is next? It depends on a person's character. Is that glass half empty or full. The world is mostly corrupt. Blockchains will take decades to sweep up the corruption and it will come in fits and starts. It will begin at edges from those marginalized and work its way in.

It may be tough right now to look at the latest wave of acceptance and barriers broken but this latest round only have greed and dollars in mind. This is necessary in the evolution as it garners attention and puts it on the radar as a tool for those with the correct character to become true leaders. Wielded correctly by these people in eventuality will be powerful enough to dethrone the status quo. Don't be too quick to judge this burgeoning infant of the paradigm change. The world still won't know what hit them when the sea of change happens.

Think decades rather than months and years. This is not a get rich quick scheme to those with higher aspirations.

Time2help's picture
Time2help
Status: Diamond Member (Offline)
Joined: Jun 9 2011
Posts: 2808
Cryptocurrency in a word

Hassle.

skipr's picture
skipr
Status: Silver Member (Offline)
Joined: Jan 9 2016
Posts: 114
is gold dead too?

If BTC is dead due to the futures contracts, so is everything else, especially the decentralized ones like gold etc.  The fat cats will not loose their cash cow without a major fight.  Those poor aristocratic bureaucrats need every gimmick they can get their hands on since they have no real talent and would not survive long in the real word of innovation.  It would be like the Apple execs pushing Steve Jobs out in the early 90s.  They desperately brought him back when they almost flushed the company down the toilet.

Maybe everyone should move their cryptos into altcoins with no futures strung around their necks.  Hopefully their correlation with BTC will break and be like it was before last December.  Is centralized Ripple a wolf in sheeps clothing?

davefairtex's picture
davefairtex
Status: Diamond Member (Offline)
Joined: Sep 3 2008
Posts: 5265
trends

Bitcoin isn't dead, certainly, but (aside from price) it is going through a serious dormant period right now.  Just look at google trends.  Its not pretty.

Interestingly, price has decoupled from trends.

ETH at least appears to have double-bottomed.  The crazy moves on the intraday charts has me more or less giving up on those timeframes and instead I'm pulling back to the daily charts, where sanity still appears to exist.

Something smells bad from a trading perspective.  Price just shouldn't jump around this way.  Maybe its just lots of big sharks having fun with light volumes with no regulators around.  Wild west, indeed.

Just my two cents.

I just looked at a longer term daily chart.  Looks like the recent "$1000-rally for no reason" just rescued bitcoin from a re-test of the recent lows - by breaking price above that downtrend line.

It will be interesting to see how it plays out.  If the move doesn't drag in buyers, but instead just brings out sellers, it will have been a lot of money spent for nothing.

Mohammed Mast's picture
Mohammed Mast
Status: Silver Member (Offline)
Joined: May 17 2017
Posts: 126
Exactly
davefairtex wrote:

Bitcoin isn't dead, certainly, but (aside from price) it is going through a serious dormant period right now.  Just look at google trends.  Its not pretty.

Interestingly, price has decoupled from trends.

ETH at least appears to have double-bottomed.  The crazy moves on the intraday charts has me more or less giving up on those timeframes and instead I'm pulling back to the daily charts, where sanity still appears to exist.

Something smells bad from a trading perspective.  Price just shouldn't jump around this way.  Maybe its just lots of big sharks having fun with light volumes with no regulators around.  Wild west, indeed.

Just my two cents.

I just looked at a longer term daily chart.  Looks like the recent "$1000-rally for no reason" just rescued bitcoin from a re-test of the recent lows - by breaking price above that downtrend line.

It will be interesting to see how it plays out.  If the move doesn't drag in buyers, but instead just brings out sellers, it will have been a lot of money spent for nothing.

It's like equating God with religion. Sigh. 

 

 

mrees999's picture
mrees999
Status: Gold Member (Offline)
Joined: Aug 16 2013
Posts: 388
Noise

One word.  This is what my grandparents said about rock and roll.  "It's just a bunch of NOISE".  Ha ha, miss them.  It wasn't "noise" to us.  They didn't get it and didn't want to. We all come and go, one generations hassle is another generation's wealth. 

 

Perspective.

 

How will they remember you?

Will they?

mrees999's picture
mrees999
Status: Gold Member (Offline)
Joined: Aug 16 2013
Posts: 388
Raw. Energentic ... Capitalism

Money is flowing to the paths of least resistance.  As regulations come in some corners, the energy of capitalism will flow to where there is less regulation. States will pursue statism, and free markets will flow to where the ingenuity (and fraud, hucksters, and the energy of the wild west) goes. 

It will be like trying to squeeze and hand full of sand.  They will keep grasping, and innovation will pop up in places they can't control. Rock meet hard place. Free market - meet capital control attempts. This is a fine Petri dish to watch the power of capitalism versus attempts at socialism by state actors to ring it back in.

Which side are you on?

 

 

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