The only way is up

What a difference a day makes!

Our Twitter feeds exploded back into life this week.

Every crypto shill, guru, armchair altcoin aficionado, and bitcoin maximalist shot back out of the woodwork.

And here’s why…



Source: Money Week
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As you probably know, the bitcoin price surged on Friday.

It went from US$6,800 to US$8,000 in a couple of hours. On impressive volume too.

Someone was buying in big time.

Was it George Soros moving into crypto perhaps?

That’s one theory.

In the cryptic world of crypto there’s a few others of course…

Some say it was the end of tax selling season. This theory was that people were previously selling down some of their holdings as they needed money to pay taxes on humungous profits for the year.

But as this had stopped now, the prices could move back up.

Others say it was someone with deep pockets squeezing out the shorts (those betting on the bitcoin price falling even further).

Before the surge, short positions were at record highs as the bitcoin bears proclaimed the end was nigh.

It turns out yet again they were wrong.

Whatever the reason, it’s certainly given people pause for thought.

And as usual, the high-strung emotions of day traders oscillated back to the opposite extreme.

Not to mention the mainstream press…

Instead of Nouriel Roubini’s warning of bitcoin going to zero, we now had headlines screaming out Tim Drapers bitcoin at $250,000 by 2022 prediction.

Ah the fickle media.

Here’s our advice…

Ignore it all. Every single bit.

The shills, the crypto pump groups, the grey-haired economists, and the hyperventilating talking heads.

Price is probably the least interesting and relevant part of the crypto revolution. And every schmuck can have an opinion on it. Because nobody knows for sure.

But it doesn’t really matter what anyone thinks will happen because it will quite literally take care of itself.

In our opinion, when you compare it to the markets it has the potential to infiltrate, the fiat denominated price rises from here could be immense.

But when — and only when — the technology is ready.

And day by day, week by week, we progress.

Blockchain technology, driven by crypto-economic systems, will accelerate the pace of technological change across every industry.

It literally will turbo charge every single industry in the graph below through efficient data sharing processes.



Source: Scoopnest.com
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So, if you want to pay attention to anything, look at the technological breakthroughs, not the price.

One of your core holdings, ethereum [ETH] is at the forefront of all this.

It has an army of developers working on improving it every day.

And in late 2017 a key moment happened.

Not that you’d have read much about it…

Why non-fungible tokens are a big deal

Today we want to share with you a recent development that’s gone mostly unnoticed. Especially in the mainstream.

But it has profound implications.

In late 2017 ethereum developer, Dieter Shirley released an improvement proposal — ERC-721 — that would allow non-fungible token smart contracts.

It built on the more familiar ERC-20 proposal which almost every ICO in 2017 launched on.

In fact, the ERC-721 proposal was the basis for the release of the uber popular CryptoKitties craze.

As you probably heard about earlier this year, CryptoKitties is a game in which players can buy, sell, trade, and breed digital cats.

They can be thought of as ‘baseball cards’ in that each cat is unique in some way.

This uniqueness factor makes the CryptoKitties extremely collectible.

That’s the essence of non-fungibility.

As opposed to fungibility.

A fungible asset is an asset swappable with a similar asset with no difference. The obvious example is a dollar. One dollar is as good as any other dollar.

But there are many other fungible commodities as well, like flour, oil or gold.

The ability to create non-fungible tokens goes way beyond CryptoKitties.

Indeed, those that scoffed at the craze, as per usual failed to see the big picture that was ERC-721.

Think about this…

Non-fungible tokens create digital scarcity without the need for a centralising organisation to confirm authenticity.

This opened up whole new avenues of value creation and transfer.

This first use is digital collectables, like CryptoKitties. Or any other form of collectable asset.

But there are a lot more.

Consider plane tickets.

A plane ticket is a non-fungible asset. It is for a specific person, but also, for a given seat, on a given flight, on a given day.

Or concert tickets. Blockchain could provide a unique way to end the scourge of scalping in the music industry.

Property titles are also a fairly obvious use case for which a lot of people can see the blockchain replacing outdated systems.

They can apply to land ownership, but also to art.

Gaming is probably going to be a massive user of non-fungible tokens. The ability to verify the scarcity of a ‘weapon’ or secret ‘thing’ in a game provides tremendous kudos value in the gaming world.

Making digital copies of some digital creation is trivial, but faking ownership once that ownership has been put on the blockchain becomes impossible.

Right now, a lot of cryptocurrency and financial assets are fungible. One bitcoin equals one bitcoin, one dollar, a dollar.

But this new possibility could create some interesting tokens in the future. Would a dollar that had been digitally ‘signed’ by Brad Pitt be worth more than a normal dollar?

It’s an interesting world we’re creating that’s for sure…

Still just a kitten

Such was the popularity of CryptoKitties at the time that it significantly clogged up the ethereum network.

Fees went up, confirmation times slowed down.

It really highlighted the scaling problem in ethereum.

Quite simply, it’s not fit for purpose yet.

After all, if your network can’t handle a popular collectables game, how’s it going to be the engine of world commerce?

This and similar critiques were rightly made.

But that’s the beauty of the crypto world.

It might be a case of two steps forward and one step back. But it’s progress nonetheless.

CryptoKitties are forcing the ethereum team to address scalability issues, in a way all the initial coin offerings built on ethereum have not.

We’re still in the infancy of cryptocurrencies.

The price swings reflect both the immaturity of the participants and the immaturity of the technology.

But although the prices move up and down, the technological progress is only moving one way.

Quite simply, the only way is up.