Cryptocurrencies like bitcoin and ethereum are revolutionary.
Not necessarily for what you can do with them now. But for what you might be able to do with them in the future.
It’s this vision of the long term that some people investing in crypto struggle to deal with.
When they see huge price swings day to day they just get caught in the hype. All they see are dollar signs. But it’s important to keep eyes on the longer, bigger prize.
‘But what can these crypto do now that will see fast profits?’ is the question that often finds its way to us. Well the truth is this can be a hard question hard to answer in a simple way.
It’s a hard question to answer because we’re really talking about early stage technology.
It’s developmental stage programming. It’s the start of something with potential, which might not even have a fully functioning, working product yet.
It’s the start of a whole new stack of technology and we are only now just starting to build upon.
Asking what a crypto can do now is like asking what a microchip could do back in the 1960’s.
The obvious answer back then would be to say ‘it allows machines to do calculations faster.’
Which is correct.
But doesn’t go anywhere near the revolution that microchips have played in the world. And to extend that analogy further consider this...
The first microchips doubled in power every two years due to the ability to continually make them smaller. The smaller the chips the faster the speed of processing.
Gordon Moore was the scientist that proposed this idea in 1965 and it was appropriately referred to as Moores Law.
He predicted this effect would top out in 1975. He was wrong. It kept on going at about this rate of doubling in speed every two years until 2012!
And the effects of this invention grew exponentially to form the basis of just about every machine you see around you today.
Cryptocurrencies like bitcoin and ethereum are like this. They are what we call protocol layers. These are the first layers that other layers are built upon.
Protocol layers enable new systems and networks to be developed. They are the foundations that faster, better, more powerful tech will be built on.
The problem with protocol layers is that they require some imagination to realise their full possibilities. In other words imagining the unimaginable.
Did you think of the internet?
Imagine it was the 90’s and you just invented the TCP/IP system, the basic protocol that underpins the Internet. You could explain it by saying something like ‘it allows different parties on a network to have a seamless “handshake” as they were following the same language.’
You could explain the problem you were solving and most people would probably understand. Most people would be able to see the point of it. But it would be at its most basic foundation level. You could explain that you were creating a network to share information around the world.
But we doubt you’d then go onto imagine and explain the idea of social media.
Try telling someone in the 70’s that 1.7 billion people would be sharing photos of their breakfast to complete strangers.Or imagine trying to explain ‘the most powerful man on earth’ a sitting president would be able to ‘tweet’ a message that could incite war between nations – but only in 140 characters.
Imagine trying to tell someone about Amazon. Or the ‘internet of things’. You wouldn’t even bother with the concept of ‘poop emoji’.
And to start with you’d have to have thought all these things were possible right back at the very beginning of the internet. No one saw it coming that far away. No one. Blockchain and cryptocurrencies are at a similar stage.
We can see that these projects are building fundamentally important infrastructure for a future world of cryptocurrency.
But even while we have a sharp idea of what the future may look like, to imagine the real future ‘Facebook or Amazon of the crypto world’ is near on impossible.
However, we think that your second red hot crypto pick may be one of those ‘future giants’ of the crypto world.
It’s still a protocol layer technology in terms of its function. But it works with other blockchains to strengthen security. And its first product is solving a real world problem in a future 31 trillion-dollar marketplace you will certainly be familiar with.
The global mortgage market.