🎤 Interviews Masha Beetroot

Ripple’s David Schwartz: What Bitcoin and Ethereum Should Do to Catch Up With Ripple

🎤 Interviews
What is the next step for Ripple after having Revolut coin added?
Ripple’s David Schwartz: What Bitcoin and Ethereum Should Do to Catch Up With Ripple

Ripple’s Chief Cryptographer David Schwartz aka “JoelKatz” is one of the original architects of the Ripple consensus network. In an exclusive interview to CryptoComes, he talks about the Ripple’s next steps and the evolution of crypto exchanges.

Masha Beetroot: According to EToro study, Ripple’s XRP turned out to be the most traded coin by users of all age groups. What should Bitcoin and Ethereum do to catch up?

David Schwartz: I think the key they need to have is adoption for real use cases. Just a clear vision on what they are for, why would people use them, to do what.

I think Ethereum kind of built market share by this sort of broad idea that you can use it for anything with the smart contracts.

Now I think it’s time to answer the question like here are some very specific things. You have to have some example you can’t just say use it for anything.

Bitcoin I think has kind of painted itself into a corner a little bit as a store of value that you can’t easily transfer competing stores of value you can easily transfer. It just comes back again to use cases; people need a clear idea of what they are going to use it for.

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MB: What is the next step for Ripple after having Revolut coin added?

DS: I think the next step for XRP, the token, is going to be broader adoption for people who see advantages to the high-speed low cost and decentralized exchange. I think the next step for Ripple as a company is going to be proving that we can actually use XRP to settle institutional payments.

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MB: In what direction will the evolution of crypto exchanges go? Maybe it’s about consolidation or what do you think?

DS: I think interoperability is going to be the big focus. We have something like 1,500 cryptocurrencies right now that are aiming at different use cases. Whether one of them will be for trade finance or settling equities transactions or smart contracts.

If we have all these different tokens that are aimed at different use cases, then it becomes a pain point because if my money is on this one token and I need to pay you some other token, we need to solve the interoperability problem.

It’s very ironic a lot of people got into this business because they saw like liquidity or Silo, like some like dollars or they are on PayPal or they are on these different payment systems. So we said build these systems that will solve this problem.

And what happened is we built Bitcoin which is a Silo, we built Ethereum which is a Silo, we have XRP which is a Silo. We actually replicated a newer sexier version of the problem we were trying to solve.

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Let’s Talk Stablecoins: Interview with the Co-Founder of Cred and Former GM at PayPal, Dan Schatt

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With many HODLers and crypto enthusiasts looking for investment advice, insights from a top expert in the fintech field, Dan Schatt, are sure to come handy
Let’s Talk Stablecoins: Interview with the Co-Founder of Cred and Former GM at PayPal, Dan Schatt

Dan Schatt is the Co-Founder and President of Cred, former General Manager of Financial Innovations at PayPal, and a bestselling author of Virtual Banking: A Guide to Innovation and Partnering. Earlier this week, we sat down with Dan to talk about the crypto market in general and stablecoins in particular.

From Mainstream to Crypto

U.Today: Hi Dan. You had a solid career in mainstream finance, including a leading position within PayPal. Why did you decide to go crypto?

Dan: I became interested in the Blockchain technology and crypto space in 2012, back when I was working at PayPal. While PayPal hoped to become the Internet of Money, my “Aha” moment was that crypto would become the Internet of Value, eclipsing PayPal in every way, i.e. Blockchain would prove more secure, transparent, and allow for the tokenization of all asset classes. It is unbelievable to me how quickly we’ve moved to a legally permissible, tokenized version of the US Dollar!

I believed crypto would also attract a larger developer community than PayPal could ever hope for. You just can’t compete with a world computer or a non-inflationary world currency that can be used by anyone with Internet access.

I later published a book in 2014 called Virtual Banking, with a chapter on Bitcoin and crypto. I’ll never forget my interviews with Wences Casares, who really opened my eyes to the power of Bitcoin.

U.Today: Please tell us a bit about your present company that you, as we understand, also co-founded. What does Cred do exactly?

Dan: What is the best possible loan you can get, other than a free friends and family loan? Probably a home equity line of credit. The problem is most people can’t get a home… Replace the home with crypto and that is essentially what Cred has created: the world’s first Crypto Line of Credit (C-LOC™). We allow people the ability to use their BTC, ETH and XRP as collateral and get cash. Cred has amassed over $300 million in lending capital to provide liquidity against crypto assets. We are set to revolutionize the lending industry by merging an established global lending network, a diverse fintech team, machine learning, and the power of the Blockchain technology.

U.Today: It seems that education, among other fields, is moving onto the Blockchain. The UC at Berkeley now has its own Blockchain, and your company is somehow connected to it through a third entity, is that right?

Dan: Yes! Cred and Blockchain at Berkeley, are two of the founding members of the Universal Protocol Alliance. Howard Wu is Cred’s Chief Scientist and a Founder of Blockchain at Berkeley, the largest US University Blockchain associated in the United States. They have an incredible amount of talent coming through their program and we are lucky enough to benefit from their thought leadership when we created the Alliance, which is dedicated to bringing important pieces of infrastructure to the crypto community and act as a bridge for the next 100 million users of crypto.

Stablecoins and the Current Market

U.Today: What are your thoughts on Bitcoin’s collapse last month? Did it come as a surprise to you? Where does this situation leave us now?

Dan: I guess it all depends on your time horizon. I’m a big believer that crypto assets will become the preferred store of value and means of exchange in the future. As a store of value, just look at BTC and gold in 2011. Gold is down roughly 30% since 2011 while BTC is up ~118,000% but is still just 1% of gold’s market cap. And how many times has BTC “collapsed”?  

Price volatility is massive at this time because wealth is highly concentrated and institutional involvement is still limited. This will evolve as the Internet did. Development of infrastructure and practical applications takes time… You can’t rush a pregnancy to 1 month by adding 9 doctors. It will still take 9 months.

U.Today: Let’s move on to stablecoins. Certain critics claim that some of them, e.g. Tether (USDT), are a disguised form of centralized fiat currency since they are pegged against the USD. How would you rate this assessment?

Dan: For the last few hundred years, governments have legitimized fiat currency by backing it with gold. Eventually, as trust grew in government currencies, there was no longer a need to connect it with gold. The same is now happening with crypto stablecoins. Will it matter at some point if they are “backed” by fiat? Probably not. At some point, the trust will be in the finite supply, greater transparency, stronger security, increased utility and ability for it to travel as far and wide as the Internet. Governments will eventually work to tokenize their own fiat currencies, but there will always be demand for a store of value or means of exchange that cannot be controlled by any government.

U.Today: Do you think businesses should strive to move away from governments? Then isn’t there a dissonance pertaining to how this ideal can be achieved with stablecoins which by default rely on central banks?

Dan: Governments and businesses will increasingly be pulled in a direction by the Blockchain, i.e. a path toward more transparency, inclusion, and the democratization of financial services. It will become increasingly difficult for governments to close their borders, impose capital controls, and attract talent if they do not support crypto. And, crypto communities need to leverage some of the valuable components of the existing financial ecosystem—the role of professional custody and basic investor safeguards—because inheritability and token recoverability are needed if we are to provide crypto services that will appeal to the next 100 million users.

U.Today: For better or worse, do you think the demand for stablecoins is bound to increase since they seem to demonstrate more stability during crashes?

Dan: Absolutely, but not just because they are stable. They will ultimately be used as a better means of exchange, remittance vehicle, and as core component in automated commerce.

But, not all Stablecoins are created equal. They’re more likely to be ‘stable’ if they are pegged 1:1 and verifiable on-chain, and can allow for anyone to review how the value is substantiated, not just a professional auditor.

The Future Talk

U.Today: What are your predictions for 2019? Will we see more widespread adoption of stablecoins? If yes, do you see it as a positive thing?

Dan: We are building to deliver practical use cases. There are many examples of this: an Argentinian who needs to get out of an unstable fiat currency, or a Turkish expat looking to make a remittance more cost effectively. Stablecoins can deliver on these use cases. I may live in a country with an unstable currency, and I’d like to move into something stable as soon as I can. I may not have access to a US bank account, to buy USD, but now I can buy a better version of the US Dollar. There are now lots of opportunities that broaden the use cases and bring more people in… So yes, a very positive thing!

U.Today: Some claim that DLT is the future of commerce: the fintech sector will change the global economy, drastically reshaping how we do business. Your thoughts on this?

Dan:

Commerce needs more than a distributed ledger to function. Cred, for example, is providing low cost credit to be used in commerce. Others are providing core banking services such as payroll for crypto companies. The future of commerce involves a host of next generation financial services. How those ingredients are combined with DLT is the secret sauce.

U.Today: Finally, what advice would you give to those who are thinking about entering the crypto world? How should one behave in order to succeed in this still largely unexplored domain?

Dan: Keep your ear to the ground and listen for real problems that need to be solved. The more specific, the better. Tools and infrastructure are still needed to allow crypto to go mainstream. Think years vs. months. We’re headed in the right direction, so make sure not to get caught up in the hype cycles, whether crypto is on the way down, or on the way up!

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Crypto Trading Legend MasterLuc: “You Can Visit Cemetery of Dead Alts, Won’t Find Bitcoin There”

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The legendary trader MasterLuc is known in crypto community for his precise predictions. Here’s his exclusive interview
Crypto Trading Legend MasterLuc: “You Can Visit Cemetery of Dead Alts, Won’t Find Bitcoin There”

Bitcoin is experiencing tough times as it has suffered a severe correction of over 70 percent from the point of its peak value. Now is the time to worry about its future, so we decided it’s about time to turn to the anonymous trader MasterLuc, whose fantastic prediction skills made him a legend on Bitcointalk.

What made MasterLuc famous was his 2016 prediction of Bitcoin price all-time high at 20k, which was done at a time when no one could even imagine such figures.

MasterLuc shared with us his vision of the future of the crypto market, he explains why Bitcoin is strongly undervalued, and why most altcoins are going to die.

The interview was organized with the help of the blockchain scoring platform Prosphero.io.

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CryptoComes: Right now, we see a profound correction of the Bitcoin price. Are you going to give up on your famous prediction of Bitcoin continuing its significant rise in price?

ML: Are you interested in the technical answer to your question, or the emotional answer? From a technical point, everything is alright up until the 2,990 mark, any lower than that and you can start feeling strained. From an emotional side, the answer is no; bubbles don’t burst like that.

Enough of those bear traps need to pass so that the bulls сan principally lose their fear of a bitcoin dump.  

When the vast majority of bulls stop straining over a dump of Bitcoins, then you can expect trouble. However, at the time being people continue to be tense. This is merely a correction.

On the other hand, I expect a new strong bullish trend in Bitcoin not earlier than 2019.

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CC: How do you comment on the skeptics who are predicting the next death of Bitcoin… will it really survive under the pressure of these newer alts that are equipped with the latest modern technology “on steroids”?

ML: You can visit the cemetery of dead alts here.

But you won’t find Bitcoin there. Instead, there are hundreds of alts, and they will all eventually get there. Partly because no one yet has brought a revolutionary technology that resembles the scale of Bitcoin to the table. If we were to compare Bitcoin to the invention of the internal combustion engine (ICE) and cars, then yes, you could say that alts are attempting to improve something.

Like the car industry, they’re repainting the red to green, removing a piece from the edge, building up the wing of this new car, adding a liter to the tank, cramming in extra bells and whistles. But the ICE remains the only revolutionary invention that gave civilization a breakthrough.

And still, with so many alts, the next revolutionary step is for Bitcoin. I’m talking about Lightning Network. So why do we need these alts? I have many friends in the CryptoParty, and no matter whom I ask “why are you mining alts?”, the answer is always: “To sell them for Bitcoins.”

Alright, we’re pretty clear about altcoins, let’s say that they are an unnecessary part of the evolution of Bitcoin…

ML: … Hold on, I’m not saying that altcoins are unnecessary. It’s just that most alts are created and used for one goal—to get more Bitcoins.

There is also a quite functional form of alts, for example, Litecoin. It appeared at a time when people were tweaking some constant in Bitcoin’s source code to quickly release a new alt. Litecoin did precisely that, but it also changed the basic hashing algorithm from SHA2 to the experimental algorithm Scrypt.

In theory, Litecoin would have died just as the others had. But what makes it special? People are actively testing new features on it and then merging them into Bitcoin. The most significant achievement for Litecoin was its implementation of SegWit. Yes, this was a huge benefit, but again for Bitcoin.

Let’s face the truth, Litecoin is experimental, it’s like someone who voluntarily takes powerful medication for research purposes. After the testing and debugging are conducted on the experimental subject, it is added to Bitcoin. We are indeed in need of those types of altcoins.

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Alright, we’re going down the list– why do you have such revulsion toward Ether?

ML: The founder of Ether did something unacceptable—he has censored the network. He also does not hide his central role in the project, calling himself the “kind dictator.”

Understand that the revolution of Bitcoin consists of Blockchain technology, which helped eliminate the need for an intermediary institution, such as a bank, between Alice and Bob during exchanges of money. Blockchain is needed to exclude a central “dictator” who maintains the exclusive right to inspect coins, and who merely is granted this right because he is in the middle of every exchange.

The founder of Ether became that central entity. Ethereum is centralized, and it has one point of failure—the founder, who forks its chain left and right. Why? He just does what he wants, let’s not even discuss the motives of this nonsense. I don’t know why he uses Blockchain technology in this case since the technology was created to counter entities like himself.

Ether is centralized just like EOS. Both compete against other digital currencies like PayPal. However, the latter does not hide behind the mask of Blockchain. All of them love to block other accounts (even with the price of a hardfork), but this isn’t about Blockchain at all.

Again, the idea of Blockchain is simple: Blockchain is essential in places where no center or regulation is needed. If there is a center of any kind- like some office, leader, or something else that you can just close or fire- then there is no need for Blockchain. Ether and EOS (and some others) have a center, Blockchain, and even a project CEO. All of this put together is a project of insanity.

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You also don’t take ICO seriously, could you explain why?

ML: Oh, this is just a dot-com. This is how Wall Street entertained themselves in 1999. They would create imitations of online stores, issue shares of stock, sell out for millions, then repeat the cycle. Only a few companies survived during the dot-com hysteria, and they have since become the current giants such as Google, eBay, Amazon, etc. The remaining 95 percent of projects were washed away by the wave following the collapse of this pyramid. History is repeating itself with ICO.

Alright, let’s return to Bitcoin proper. Many believe that it is an outdated technology, at least regarding its ability to scale.

ML: Those people are merely undervaluing what will someday become of Bitcoin. They don’t understand its essence. Concerning its ability to scale, there is a short answer—Lightning Network. Just find out how much this solution outweighs all of those pathetic attempts to only-increase-the-block.

Let’s take a closer look at the problem of scaling and the importance of Lightning since it is the real future of Bitcoin.

ML: There are two different points of view on the solution of the potential problem of scaling the network.

  1. Quantitative. You need to slowly increase the maximum size of the block, or make it adaptively float. But for this, you need a hardfork—a strict division of the network.
  2. Qualitative. You can go to a new level of developing the network where there will be no room for this problem. Similarly, there will be no place for several other issues.

The second option is Lightning Network. This is the next level of development akin to the OSI model. Here’s an analogy that is understandable to sysadmins: Bitcoin is the first physical layer (a cable), and Lightning is the data link layer (ethernet protocol). There are higher levels—network, transport, and application. They have not yet been developed, but that is the logic of the development.

Just so you know, in that same Ethernet, there are outrageous limitations on the size of the datagram– 1,500 bytes (with much difficulty, you can achieve 9,000).

In other words, within all our networks today, on any path from any website to you– there is a 1,500-byte limitation on the size of the transmission through the data link layer of OSI. Don’t believe it? Google the size of MTU. It’s true. How is it then possible that you can watch multi-megabyte videos on servers like YouTube?

It’s very simple. The limitation exists on the second layer of OSI, but when you like a video, that exists on the seventh layer. On the third layer, the limitation has already been handled quite elegantly. On the fourth layer, nobody even knows that it is there anymore.

On to the point of this… those who offer to change the size of the block are offering a quantitative solution, which could potentially lead to another similar obstruction in the future, and then someone will want another block that is even bigger in size. In option one we are merely pushing the problem into the future, not fundamentally solving it in any way. For example, this is the approach of BCash. They offer growth in one dimension, but they reject a complex multidimensional development of the network, as seen in the OSI model.

Therefore, while lamenting about “problems of scaling Bitcoin”, think about the MTU data link layer of 1,500 bytes. It exists in any network. It is terribly little for our times. This limitation was put in place 40 years ago, and to this day nobody wants to hardfork the Internet to change the limit. Everything works excellent because a complex adaptive network model was created. Lightning Network is exactly the next big step in the right direction.

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Finally, I would like to discuss your critique of PoS, the consensus algorithm that many believe is the future of crypt, outweighing PoW. What’s wrong with PoS?

ML: First, let’s answer the initial question of why PoW was invented (HashCash originally). And why has Satoshi implemented this into Bitcoin?

HashCash was invented for the fight against spam. When sending a message, the sender would have to include his hash in the header. In no way did this complicate the lives of regular users because they needed to calculate only one hash. It did, however, seriously complicate the lives of spammers, who needed a new unique hash for each message, and they sent millions of those messages.

In other words, this technology, which opposes the centralization and virtualization of resources, opposes one person doing the work that should be performed by many people under normal circumstances. For example, sending messages, or verifying transactions and so on. This technology, unfortunately, does not entirely prevent the adverse effects, but it does impede the occurrence of these problems rather well.

Now about PoS. Even a cursory glance at this technology reveals its significant drawbacks in the fight against centralization. The higher your initial balance, the higher your chances are at sealing a block and getting more money in return.

To understand the absurdity of this idea, imagine an analogous situation where a PoW-miner has extra video cards and ASICs materialize on their own out of thin air while working on a network. They configure themselves on the fly, connect to the server, and begin working. That is precisely what happens to those with quite a wealthy wallet under the PoS framework.

Besides that, I believe PoS is wild centralization and deflation in one bottle. If the concentration of a fixed amount of money generates new money on its own, then PoS-systems, if they ever become popular, will spawn an especially exaggerated breed of hodlers. PoS will maintain a strong deflationary motive by just sitting on bags of money. But how will a real economy work in such a system? After all, it is paralyzed by the lack of moving money. PoS is a system that generates a passive revenue from fixed money, in other words, money that is taken out of circulation.

Finally, separate from the centralization and virtualization of resources is PoW.

It is real work that creates a decent load on the system. You will not be able to properly mine Bitcoin and Litecoin from one computer, this idea is initially meaningless (it is intended to be that way).

On the other hand, with PoS you can unleash an entire zoo of different PoS-systems, making a profit from all of them immediately and simultaneously. Drawing a parallel, you can participate in 10 or 100 networks at the same time. Now return to the initial example about spam and the story of why PoW came to be for Bitcoin to understand why the situation of PoS is absurd.

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NEM, Dash and Petro in Venezuela: Head of NEM Latam Explains

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“We can confirm that the Venezuelan government is intending to use the NEM Blockchain”:Pedro Gutierrez
NEM, Dash and Petro in Venezuela: Head of NEM Latam Explains

Is the Venezuelan government using the NEM platform for its oil-pegged Petro cryptocurrency? Head of NEM Latin America Pedro Gutierrez answers the question in a first-hand exclusive interview.

It’s been reported that the controversial Venezuelan cryptocurrency Petro was officially released as an asset on NEM’s Blockchain rather than on Ethereum’s Blockchain, with the total supply capped at 100 mln Petro.

Pedro Gutierrez answers and explains why the NEM platform, its competition with Ethereum and specifics of doing business in one of the most promising regions on Earth.

We asked Pedro Gutierrez about NEM’s involvement with the Venezuelan government and the platform’s perspectives in Latin America and globally. As the Latam leader of NEM.IO foundation, Gutierrez sees his major task in s publicizing Blockchain technology and NEM in industry, commerce, education institutions and government in Latin America and Spain.

Cyril Gilson: Is the NEM platform used for the oil-pegged Petro cryptocurrency?

Pedro Gutierrez: We can confirm that the Venezuelan government is intending to use the NEM Blockchain. We can’t comment on how it works as it’s not a project we’re actively involved with. The NEM technology is freely open to any individual or organization that wants to use it. The NEM Foundation abstains from political endorsements.

CG: Have the NEM developers been involved in developing the Petro?

PG: No, our developers are not involved with this project. NEM’s technology is easy to use and to build applications upon while having a near perfect record for being secure. A person reasonably skilled can work on the NEM platform within a day.

It does not take much to learn how to use NEM’s technology. So it is therefore easy to imagine why the Venezuelan government wants to implement using NEM technology.

NEM in Venezuela

CG:  How big is the NEM community in Venezuela?

PG: The NEM community in Venezuela is growing steadily. We have raised significant interest in the academic and business sector. NEM is the best technology to make this happen because our platform is plug n play for business- making it the easiest and safest Blockchain network for enterprises and developers.

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CG:  When the story of NEM started in Venezuela and what are the major achievements?

PG:  NEM started in 2014 and its tech is widely adopted by hundreds of companies all over the world because the platform is so easy to use. A huge portion of global industries such as the financial sector, insurance, healthcare, pharmaceuticals, supply chain management and the entertainment industry sectors need a cost-efficient way to manage and authenticate data in an immutable and secure way. There’s no question that these companies will play a vital role in incorporating Blockchain technology in the next few years.

Venezuela is an attractive region for NEM to expand into. NEM has hubs in Malaysia, Australia, Japan and New Zealand. All of the NEM hubs are key to expanding visibility and opportunities where the NEM team can engage with the public, do training on our platform, and support startups who are interested in Blockchain.

In May, we opened an embassy in Venezuela and this is critical to providing Venezuelans with quality resources and training for developers getting into blockchain. We are hopeful that adding Blockchain services to the list of Venezuela industries can help the economy and people. In addition to this, we hold meetups to help educate the Blockchain community on the benefits of building on NEM’s ecosystem.

CG:  Are other Latam governments considering something similar?

PG: NEM is an open-source platform so any government, individual or company can build on NEM. At this time, I’m not aware of other LATAM governments building on the NEM Blockchain.

CG: What advantages and disadvantages of the Petro do you see?

PG: I don’t have a comment on this. I’m working on other projects, though, that I’m happy to talk about. We have some projects that at the moment we can not announce since we have signed NDAs, but I can tell you that they are in the financial sector, in Mexico and Colombia. We are also working on projects of agricultural traceability, electricity for rural areas among others that we will announce very soon.

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Dash and NEM

CG: Is there a competition between Dash and NEM in Venezuela?

PG: Dash is one of the most innovative and interesting Bitcoin forks, but NEM does not compete with Dash since Dash is a transactional platform and NEM is a platform of Blockchain Services. So we are not in competition with Dash because the two platforms are designed for different purposes. We have a good relationship with the DASH team and are supporters of their community, in several countries of LATAM, we have participated in events together.

What’s next

CG:  What's next for NEM in LATAM?

PG:  Education and training are critical to helping ensure the future of Venezuela to remain competitive and thrive. NEM is supporting LATAM by building Blockchain hubs, offering training to developers at all levels, partnering with companies in all industries, and building a strong community to help keep the NEM ecosystem healthy.

One way that we do this is through the $70 mln NEM Community Fund. The NEM Community Fund promotes the development of the NEM ecosystem by having the NEM community vote on funding NEM startup companies.

It’s an alternative to doing an ICO and something that could be beneficial to many people in LATAM.

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Generational Crypto-Investment Gap: Why Warren Buffett Just Doesn’t Get It

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When it comes to crypto, old-school investors like Warren Buffett may not be the best guides
Generational Crypto-Investment Gap: Why Warren Buffett Just Doesn’t Get It

Investment in cryptocurrency is becoming more accessible to both experienced and novice investors, but professional guidance for trading the new asset is not readily available. The abundance of contradictory information in the media leads to further confusion, especially when well-known and respected investors like Warren Buffett voice vehement objections.

In truth, cryptocurrency is an exciting investment opportunity that shouldn’t be missed– nor should it be undertaken in ignorance. To understand how cryptocurrency investment can be approached for a safe and profitable outcome, CryptoComes spoke to Bob Loukas of Bitcoin.live, a cryptocurrency trading platform that provides expert advisement and training to its community, launching today.

Katya Michaels: How did you become interested in cryptocurrency trading and educating investors about this market?

Bob Loukas: I'm a trader going back 25 years– trading futures, forex, gold, stocks. More recently a new booming asset class has emerged where a lot of people are making a lot of money, and losing money as well, though that's probably a story that's not told too often. There is a lot of excitement, and as a trader, you want to be a part of the new asset class, the new opportunity.

From Bitcoin.live’s perspective, it’s about helping people who don't have the experience that the analysts on our platform have. They understand that trading this asset class is in many ways no different to trading other asset classes that exist today because there are the same underlying principles.

It’s such a new industry and I'm seeing a lot of younger people, a lot of millennials, getting involved, drawn in by the potential and the excitement, but they aren’t all necessarily profiting like the media may lead you to believe. With Bitcoin.live we want to bring more of a balanced, experienced voice to the cryptocurrency space, and provide the tools and help that they need to succeed.

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A steady voice for guidance

KM: What kind of media coverage and advice do you think is missing from this space?

BL: I think what's missing is a steady and experienced voice.

You've got a new breed of investors coming in and with that, some social media influencers– people in the trading space who are hiding behind the immunity that social media provides. They are coming across as professionals when they're really not.

They were able to provide trading advice in a bull market when it wasn't so much their expertise, but the fact that all ships were rising and all prices were going up.

Now it’s been exactly five months since December when the market peaked. A lot of people are losing money and those social media personalities either disappeared or they just don't have a clue on how to provide guidance to people.

Our analysts have been through the dot-com boom and the gold boom and the stock boom of 2008 and in some cases, like Peter Brandt, well before that. We want to provide the professional guidance that is lacking today.

Trading crypto vs. investing in the space

KM: Do you think for this particular asset class it is more important to understand the technology behind it or to understand the mechanisms of market trading?

BL: That's a good question because often traders who are looking at price movements over a few days or weeks fall into the trap of trying to understand and align technology, making an argument for buying something on a long-term fundamentals perspective. But really, they are going to be in and out within a week or two. Those two just don’t gel.

You need to understand if you’re a trader and you're trading price movements or if you're an investor who is looking at a coin and trying to understand whether this is a technology that's going to survive the next crash or regulatory overhead.

As an investor, you need to figure out whether it's going to be the one that gets adoption, which eventually results in utility, which eventually obviously means more of a long-term profit. So, for trading? No, it's not important to understand technology. It's about how the price is moving. If you're an investor, you really should know what you're investing in.

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Horses for courses: old and new investment strategies

KM: What do you think prevents investors like Warren Buffett from being Bitcoin enthusiasts despite their extensive experience? How can they be wrong?

BL: They’re not wrong. I think it's just a matter of someone's comfort zone and what's worked for them. Why get into another realm where they don't have the expertise? It's just too far removed from what they’ve known and what they’re best at doing.

Back in the nineties during the dot-com boom, Berkshire Hathaway stock was grossly underperforming the market because Buffett also didn't understand that technology and he basically said, I can’t invest in something I don't understand. It's a similar thing, it’s a similar dynamic. Even his investments in Apple and IBM only came very recently because they now fit his fundamental, Graham philosophy on stock investing– with cash flows, profits and a better understanding of valuation.

It's just a matter of horses for courses. People need to feel comfortable with where their money's going, and they should. If they don't understand crypto, I actually recommend that they don't make that leap of faith.

It's better to be in a world where you understand what you're investing in and why, as opposed to being completely lost.

KM: What about Bill Gates? He understands technology and was a big part of the Internet innovation period. Why is he so vehemently against crypto?

BL: I feel as if this is more of a one-off case– Microsoft was often behind the curve on technology adoption. They were very good at acquiring companies when they were falling behind and staying relevant in that sense, but they weren’t necessarily known as a forward innovator.

I think Gates doesn't really represent that group of past-generation innovators and early adopters. There are a lot of old-school tech gentlemen and founders who really embrace Bitcoin today.

I feel that Gates really adopted the Buffett mindset, and describes him as a mentor, as well.

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Investment for novices: setting specific goals

KM: With that in mind, what are the most important things that potential investors need to know and understand about cryptocurrency to help them make informed decisions?

BL:

It comes down to the question I always ask: what is your goal? Are you a trader? Are you active? Or do you just want to get some overall exposure to a new industry and not be left behind from a portfolio standpoint?

Let's take the investment side. You may just want to have about five percent of the portfolio as an investor in Blockchain. You want to be with the blue chips of crypto– obviously, Bitcoin is number one by far. Then, you also want understanding what Bitcoin is, get an overview of the technology, read the white paper. There are plenty of resources out there to understand what Bitcoin and the Blockchain technology is all about.

If you’re trading, it's about understanding risk management, trade management, the psychology of trading. There are fundamental trading skills that I feel everybody should learn if they are going to buy and sell any security or any asset class.

There are a lot of free resources out there for learning the basics. Bitcoin.live is different in that we are more analyst driven and much more tailored to crypto. We are talking about what Bitcoin is doing this week, and why, and how you could have traded the move, and what you should look out for from a risk standpoint.

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Regulatory stability will help mitigate risks

KM: How will clarity in regulation change the conditions for investment in the space? Will it legitimize crypto in the eyes of institutional investors and maybe even old school investors like Buffett?

BL: It’s two parts, in my mind. First of all, I’m more of a libertarian when it comes to regulation. I'm a capitalist, so my philosophy is very few regulations, but the ones that are implemented should make sense and should be enforced.

Second, I think we do need clarity across the board with all the agencies on what regulations are going to be put in place, and we need to get to that resolution quicker. Then, the capital markets can feel a little more confident that there's some stability in regulatory space where they can risk that capital. Right now they're concerned about making significant investments in this space because they don't know if their investment is going to get shut down by the SEC or some other regulatory body. And that's not good for the industry as a whole.

Without the lack of regulation today, there is rampant ICO scamming taking advantage of people’s gullibility. It happens in every big bull market – they're getting in as fast as they can, throwing up white papers over a weekend and raising in some cases millions of dollars.

Scams aside, some ICOs are legitimate, but they just really don't have any chance of coming to fruition over time. The intention is potentially good, but it's just not going to happen for 99.5 percent of those companies.

The more ICO failures we get, the more the Buffetts of the traditional investing world will look down on the space as being too immature for them to be seriously engaged and involved. That's just not good for the long-term viability of the industry.

Clearly defined Bitcoin cycles

KM: What are the Bitcoin’s trading cycles telling us about the asset?

BL: I've been mapping out Bitcoin cycles over the last couple of years.

I'm actually not surprised, but what we are seeing in the Bitcoin space is a very clearly defined 60-day cycle.

Of course, there are going to be shorter cycles and certainly, there will be long cycles over time, but I think we're still a little early in this technology for those to really shine and be very evident.

Right now we're near a 60-day cycle low, during which you normally get this really big “this is the end of Bitcoin as we know it” sell off. That happens every cycle low, and then you get this big reversal and swing in sentiment. Unfortunately, the cycles are telling me that we're still in a downtrend.

Even though after the cycle low we can get a really sizable rally over a month where the price can go up by $2,000 or $3,000, until I see real evidence that we’re broken out of a downtrend, I have to assume that the bear market is still in control.

That's where I see us right now– on the verge of another cycle rally, then probably another turn over the summer and into a cycle low, with maybe the end of the bear market coming in August.

But I don't know. I trade what the market is telling me as opposed to hoping and guessing where it could be.

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Bridging the crypto-generational gap

KM: A lot of people are shocked by the volatility of the crypto market as compared to the traditional stock markets. Has there been anything similar in terms of volatility, or is this the most volatile asset ever?

BL: Yes, I think it might be the most volatile, but volatility is actually decreasing pretty sharply from 2012-2014. As you get a wider adoption and you get more experienced participants from traditional markets, then you expect volatility to come down.

You also have to realize when you look at something like Bitcoin, it's not traditional in every way. Coins came on the market suddenly in 2009-10 and were traded for pennies. Nobody knew what these things were.

Gold doesn't have intrinsic value, we know that, but at least it has a couple of thousand years of relevance. This technology is just so different and new it just makes absolute sense that it’s got this type of volatility.

KM: When do you think crypto trading will become the new normal? When will we hit do you the tipping point when most people will be owning and trading cryptocurrency?

BL: There is a big divide out there. If you ask a room full of 20 and 30-year old traders, you're going to find that a big portion of them are trading cryptos only, have never traded a single stock in their life and have no interest in trading those stocks.

Then you've got the more traditional Schwab and TD Ameritrade accounts who go “Bitcoin? Crypto? What is that? Let me go onto Coinbase and try this out with my credit card.” I don't know if that divide will necessarily get bridged.

Certainly, once we get more clarity from the SEC and get more ETF product out there that can be bought and sold through a traditional broker– then I think you'll get wider adoption and more mainstream traders buying and selling crypto.

KM: It's interesting that this kind of contentious, volatile asset may actually serve as an entry point into the traditional markets for the younger traders.

BL: Exactly. The traditional brokers know that if they can offer a platform to trade crypto, they will have a customer base for decades after. And if they don’t get into this space, they're going to age with the boomers and generation X’s. So they need to get in and I think they will also put pressure on the regulatory bodies to allow them to start trading these cyber securities because they'll lose out if they don't.

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Daniel Hyman of SingularDTV: Blockchain Will Revolutionize $2.3 tln Entertainment Industry

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A new kind of funding relationship between the artist and fan is imminent.
Daniel Hyman of SingularDTV: Blockchain Will Revolutionize $2.3 tln Entertainment Industry

Blockchain technology is revolutionizing a $2.3 tln global media and entertainment industry, making artists into economies and putting artists, producers, and the audiences on a level playing field for the first time.

After international DJ and artist Gramatik raised $2.25 mln in 24 hours using a Blockchain-based platform called Tokit developed by SingularDTV last November,  the world took notice.

The Tokit platform enables artists to embed their intellectual property rights, revenue, and royalties into digital tokens that run on a decentralized Ethereum Blockchain.  

Gramatik became one of the first artists to "tokenize" , or launch a digital token which could be purchased by investors and fans who shared a common goal of supporting and funding his projects.   In return, those who bought his token could now have equity in the artist himself and profit from the revenue generated directly from his work.

In an exclusive interview with CryptoComes, Daniel Hyman, ‎vice-president of Entertainment Finance & Development of ‎SingularDTV, says:

“After the convergence of streaming and blockchain, it was imminent that a new kind of funding relationship between the artist and fan was going to emerge.”

Hyman says that Gramatik’s success will translate into a higher token price for his fans and investors because for the first time the industry and audiences have a transparent and trackable means of measuring value through Blockchain.

To understand how we got to this point, Hyman says it's important to take a step back.

SingularDTV started as an initial token launch of the Ethereum-based Blockchain test projects including a decentralized television show and documentary, and evolved into a new frontier of digital distribution.

Today the US- and Swiss-based company offers the entire infrastructure for artists to tokenize their intellectual property and an in-house studio, enabling entertainment industry professionals to finance, develop, produce and distribute content worldwide.

The Digital Revolution  

As the world’s mass adoption of mobile devices, tablets, and computers dramatically increased, digital streaming emerged as a new method of transmitting or receiving data, especially video and audio.

Digital streaming led a cataclysmic change in the way people consumed media.

The success of YouTube, Amazon, Netflix, and Spotify allowed artists to connect with millions of people across the globe; however, a means of monetizing that momentum was missing. The emergence of Blockchain and digital tokens solved that problem, says Hyman.

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The Artist

A digital technology like Tokit gives artists a direct portal to their viewers and people who want to consume their content, allowing them to circumvent traditional gatekeepers and maintain their authenticity.

“In the past, artists have relied on traditional gatekeepers to launch themselves, which often came with the huge cost of sacrificing their vision. Artists can come to our platform and say I want to fund a music video, a short film, and offer equity participation to their audiences which empowers them to continue to produce the kind of content they and their audience desires.”

Introducing equity participation can serve as a regulator of piracy, a big issue for the entertainment industry.  If fans and audiences are invested in the success of an artist through equity investment, they are far less likely to commit piracy and may also sheriff others.

The Audience

Streaming allowed audiences to select when, where and what to watch and listen to. Audiences today are far more discerning about the artists they support and are getting smarter in the way they spend their money.

“The aim for us is to be a platform that really connects the audience to their artists.  I would be thrilled to know that money I am spending will directly go to the artist and towards creating more content that I want.”

The best way to understand what the audience wants is to establish an instantaneous and direct relationship, which is exactly what Blockchain has enabled. Today’s audiences want to participate in the process, and it’s reflected in the kind of content that is emerging.

“There are less happy endings and more open endings, and subjects are left to the audiences interpretation. Less of the canned act 1,2,3, start to finish content. There are forums, discussion platforms.”

Card

The  Industry

Perhaps the most significant impact of Blockchain-based technologies like Tokit is that they bring a level of transparency and efficiency to the industry which just did not exist before.

Transparency

Investors can now track and assess everything at the transactional level which provides a considerable advantage compared with the past. Blockchain technology puts all moving parts into one place and simultaneously shares the information throughout the production process.

“This kind of transparency wasn’t accessible in the past. Today, investors can know exactly where the money is being spent, how it's being used and can track areas of impact in real-time.”

Instantaneous Feedback

Blockchain enables investors to track investments and returns instantaneously and use the information to capitalize on opportunities in real-time.

“In a world where an artist’s content can be streamed in seconds, it takes six months to get a report about how much they have earned.  It takes a year to get a report on how your film is doing. We want to compress the timeline and make it immediate.”

Paving the  Road to Middle Markets

Investing in the entertainment industry has always been regarded as high-risk. For this reason, the majority of the investment is channeled either into ultra-low budget productions, or people put money behind safe big mainstream projects. Transparency reduces the risk for investors and can invigorate middle market film and music projects that are often overlooked, says Hyman.

No One Is Being Left Out

As artists and audiences connect more directly using Tokit like platforms, Hyman says that there will be even greater need for people to facilitate scaling and distribution and in the end, no one will really be left out.

“No one will be left out.  All we want to do is help everyone share information and streamline the process. If you don’t innovate technologically, you will lose, that’s why film investment has fallen."

Hyman says the response from the community has been tremendous, after SingularDTV featured its platform at the Tribeca and several other film festivals.

“Everyone is really excited. We have seen interest from talent, producers and tech folk who all want to work together to solve industry problems.”

As far as upcoming projects, Hyman says that SDTV plans to dive deeper into the Sci-Fi space and is rallying a few unnamed disruptors, which it intends to disclose soon.

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