Bubble, Rubble, Same old Trouble

It surprises my friends when I tell them that my wife (also co-founder / president) and I do not own any bitcoin. Zero. We did this years ago to ensure that we were objective and committed to running LedgerX, and not like, sitting on an island somewhere and leaving our investors out to dry.

Because of this, I have the objectivity to say what I really think (all opinions are on my own, and not my employer’s).

The market capitalization of cryptocurrencies is just flat out nuts. Bitcoin as an ecosystem has not earned this. There is no killer use case yet. The only real companies around are related to speculation and storage of cryptocurrencies. When has that been the future of anything?

I’m so sick of these cycles, having been involved in this since 2011. Goes up, gets lots of press, lots of interest, goes down, everyone says it’s dead, another 2 years of darkness while others just work in the background to keep improving what is absolutely an important new breakthrough. Right now, the main reason people are interested in bitcoin is that it’s going up.

So, the reason I know this is a bubble is:

1) My high school friends are constantly asking how to purchase XRP
2) My bartender friend is telling me at 3am why Zcash is interesting to him
3) CME Group is getting involved
4) People are actually interested in investing in us after 3 years

That said, LedgerX has been working the last 2 years on what we think is a fundamentally new use case. There is a reason my wife and I spent so much time thinking about microfinance in college — how do we give access to financial services to the poor? Bitcoin offers that promise.

We’ll release a white paper in early 2018. We had to make sure a “physically” settled clearing house was in place first because it’s crucial to this new architecture. It’s ambitious, but we will get it right.

I would urge restraint on cryptocurrency speculation, but I know that it’s a useless exercise. After all, that’s not how bubbles work.

Paul