With Bitcoin and cryptocurrency generally in the news a lot, I appreciated a note from BizNews tribesman and fintech investor Paul Scott, founder and CEO of defi company Trona.io. Am sure those in our community who enjoy my growing fascination with the subject will enjoy reading his insights and guidance.
Paul writes: “It is critical to separate Bitcoin from crypto, as you call it. Bitcoin is pristine, 100% decentralized and finite in supply. 99.9% of all cryptocurrencies are centralised and controlled by a limited few, rife with scams, rug-pulls and general investor-unfriendly behaviour. In addition, they can often be minted at will through clever smart contract coding – meaning uncertain supply, just like fiat money printing.
I know this from experience – for two years I co-ran a project development studio building on Ethereum and other Ethereum Virtual Machine blockchains (EVM’s – you may have heard of Polygon, Avalanche, Binance Chain etc.). We never took a single dollar from investors – ours was a 100% fair-launch methodology – however we know all the ways that malicious developers can code smart contracts to the detriment of their “beloved” communities.
___STEADY_PAYWALL___Bitcoin has at least 3 globally relevant game-changing use cases:
1. The pre-eminent digital store of value. The historical global favourite hard money/property has been gold, but it is an analogue technology (ground mining and very expensive to recover, store, transport, transfer etc.). In all cases, a digital disruptor does at least 10X its analogue predecessor. For guidance, Bitcoin is c.7% of gold’s current market cap.
2. The ultimate payment rail disruptor: an instantaneous, global payment rail that can be used to send any currency anywhere in the world at near-zero cost and with minimal capital infrastructure required – essentially a combination of the card processors AND remittance companies in one. This exists today – see https://strike.me/ who do remittances to both El Salvador & Argentina.
3. The capture and instantaneous distribution of waste/stranded energy: perhaps the most interesting and little understood use case. Here’s a practical scenario – some Texan energy producers have a waste issue, called gas flares. Instead of releasing these flares into the environment, causing further damage, Bitcoin miners have connected this supply to the Bitcoin network. The result is the monetisation of this waste energy. Stranded energy works the same – if a producer cannot connect to the grid for geographic reasons, they can install Bitcoin miners to capture this stranded energy. An example, even though China has currently banned bitcoin mining, is the amount of excess hydroelectric power in China, estimated at estimated to be around 30 TWh in 2020 (source: National Energy Administration of China). This could easily be monetised.
More for you to read today:
- Russia Claims Control of Luhansk as Ukrainian Forces Retreat From Lysychansk. Moscow blames Ukraine for morning attacks, including a deadly cross-border strike in Belgorod
- Investment Banks Prepare for Lean Times as Deal Spree Sputters. Weak markets and uncertain economic outlook slow M&A and curtail IPOs
- Banks Get Burned by Risky Debt, Imperiling Buyout Activity. Bank of America, Credit Suisse and Goldman Sachs are among banks that could collectively lose billions on buyout loans they agreed to provide when demand was high
- He’s the Best Cyclist in the World. He’s Only Getting Better. Tadej Pogačar of Slovenia is 23 and already has won the Tour de France twice. With a three-peat on the line, the all-time legend talk is building.
AND FOR YOUR LISTENING PLEASURE – TODAY’S EPISODE OF THE BIZNEWS BREAKFAST BRIEFING: Naspers aside, week of hefty losses for JSE heavweights; DA plays ANC criminal card; Trollip on NMB water, Action SA.
PS Don’t forget to join me at 7pm tonight for the webinar I’m hosting with our partners at Orbvest announcing the drop in investment entry level from $5 000 to $1 000. You do need to register beforehand. Click here.
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