ahhrunforthehills wrote: ↑
Sat Mar 20, 2021 3:24 pm
Well, if we want to review it as a venture capital investment, we will want to know what its distinct competitive advantage is. One of the most important questions a venture capitalist will ask is "Can the technology easily be replicated by a competitor?"
This is where everything really turns into a dog turd. There will ALWAYS be a better technology that comes along and replaces your invention. In a pre-industrial revolution world, a watch took a lot of cheddar to have made. Things have clearly changed, but the transformation played out over centuries. In the world of crypto these changes happen over months, not centuries.
If I am looking for something that will "preserve wealth", the thing that is "preserving my wealth" would first either need a stable price (or at least stable in relation to inflation) or a stable correlation with another opposing asset to be a viable choice.
Etherium looks great. The problem is that there are 100 different drugs that look great for curing cancer too. You can also pick the number 4 on the roulette wheel to really goose your winnings. Where do you draw your line for what is just straight-up gambling? I saw a guy in NYC just sold a blockchain-based NFT sound recording of his fart for $85.
Humans don't like to concentrate on risk when they are in greedy-mode. There are no shortage of studies involving brainscans about this kind of thing. When you think about making money, your brain is flooded with so much dopamine that your frontal cortex basically checks out. What we think is logical thought about "investing" are just dopamine-induced drunkin' daydreams of grandeur.
My next sentence is going to sound condescending to some people here... but I am going to say it anyways because I think it might help some people here. For years I have been really perplexed by crypto (especially bitcoin). I heard so many crypto people say "they just don't get it". I have listened to countless podcasts, read articles, research, etc.
I kept saying to myself "what am I not getting about this", "am I being biased", "am I just acting like an old man afraid to embrace the future"? Sound familiar?
It finally hit me when I read that Peter Schiff's 17 year old went all in on bitcoin and said that his dad "just doesn't get it". This 17 year old lives in an Xbox world where you trade real money for virtual clothes for your avatar. His brain spent the majority of his developmental years in an environment created by Microsoft that has been designed to maximize his dopamine levels and to cause addiction to Microsoft's virtual purchases (i.e. to associate real-world value to virtual non-real-world goods). But you can't eat virtual groceries or stay warm in a virtual house. Crypo will basically be the same as fiat for any real world purchases.
I looked around at all the people I knew that were really cheerleadering crypto (excluding wall street propaganda). I realized that NONE of these people had even remotely the background or experience I had in taxation, investing, etc. They are like doomsday preppers who build their underground bunker but never even gave any thought about what they were going to do with all of their garbage (or a thousand other questions). Similarly, crypto people seem locked in their own little XBox world that doesn't factor in real world cause-and-effect. Nobody supporting Bitcoin ever walks through the entire process with how Bitcoin will play out in the REAL WORLD as a direct attack on world governments.
World governments are not some stupid schmucks sitting on a park bench. World governments are supported by THEIR PEOPLE and are provided infinite resources to exert the will of their people. Look at the app "Signal". Anonymous, right? Nope, NSA got in. Pedophiles looking at porn anonymously? The government can put a tracking cookie on your computer once you visit their site. At the end of the day, if you use technology... and if they want to target you bad enough, they can figure it out. They can get at your ISP, they can take control of your "safe" VPN, they can take control of your modem, your phone, your computer, etc. Go to a library? Even if a library still existed... they have cameras (and so do the neighboring buildings that recorded your license plate).
If the government doesn't care enough to pursue you over it, then it simply is not a threat to centralized government or fiat. If that is the case, what makes it so great outside of any other speculative bet like Tesla or #4 on the roulette wheel?
We already live in an electronic currency world. Very few people deal in cash. They are just 1's and 0's. Visa, MasterCard, PayPal, etc. all facilitate in the payment of contracts. Moving to another medium is not going to greatly benefit my business (or anybody else's business that I personally know). So why would my business even begin to focus on it? The moment it grows enough to matter (big "if"), the government will be all over it. The IRS will change its reporting requirements for my business to include [whatever flavor-of-the-month crypto]. If I do not comply, my completely innocent company will be breaking the law and will face penalties. Why would I not comply? It isn't like someone handing you CASH that can't be traced electronically as is accepted GLOBALLY. Once businesses are forced to report it, crypto will then be essentially pegged to fiat again.
Seems simple to me, but again, my brain wasn't created in an environment that conditioned me to inflate the value of non-tangible virtual goods/services. When I was a kid, you held those chucky-cheese tokens in your hand for to play the video game (aka non-tangible virtual service). When you were done, you felt ripped-off if you didn't receive some PHYSICAL TICKETS in return. You then took your PHYSICAL TICKETS to purchase PHYSICAL GOODS behind the stand.
Now before someone says, "aha, you see, you just aren't embracing the times old man. Paper is out, digital is in."...
I have actually made way more money than I will ever spend selling electronic non-tangible virtual services over my career. So, I definitely think I "get it". But I also think that I understand government even better.