Teeka Tiwari – Bill Bonner’s Diary (United States) –
“Are you cheating on me?”
It’s 1 o’clock in the morning. I’ve been awake for 40 hours.
I just got off the plane from Berlin this afternoon. And I’ve been on nonstop Skype calls since coming home.
I had just wrapped up a video call with one of my Chinese crypto contacts when my wife confronted me with her suspicions.
I can’t blame her for being anxious. She’s barely seen me since early June.
Over the last six weeks, I’ve crossed six time zones. I’ve visited six cities on two continents.
“Honey, I don’t have the energy for another woman,” I joked.
She’s not amused. And she’s not the only one…
In all my years on Wall Street, I never missed my children’s birthdays. This year, I missed two of them.
Long story short, I am not a popular guy in the Tiwari household.
Why would I be willing to risk the ire of not one but three women? (Two of my daughters still live at home.)
That’s because it’s been 22 years since I’ve seen a bull market like the one we’re in now with cryptocurrencies.
I have to go all the way back to 1995 to find a market where it was so easy to make money.
For example, my recommendations and alerts have brought gains of 1,984%, 4,344%, and 5,487%.
One thing I’ve learned over the years is that markets like this don’t come around often. You have to make hay while the sun shines. And right now, the sun is blistering.
That’s why I’m totally focused on finding ways to double, triple, and quadruple your money.
To do that, I’ve traveled far and wide to find the biggest trends in the cryptocurrency space. Today, I want to share three of the most important ones I learned from my recent travels.
Three Themes = Massive Profits
Over the past month, I’ve been to conferences in Silicon Valley, Copenhagen, New York City, Berlin, and London.
During these conferences, I’ve met with hundreds of people. I’ve talked to crypto project founders, venture capitalists, government regulators, central bankers, Fortune 500 executives, hedge fund managers, and digital currency miners.
These are the three primary themes that are driving their research, development, and investment decisions:
Theme 1: Fat Protocols
I stumbled upon this theme at the Consensus 2017 event in New York City in late May. And I heard about fat protocols in more detail in Berlin.
In the technology world, a protocol is a set of rules. For instance, the internet is governed by two protocols: TCP and IP.
TCP stands for transmission control protocol. This is a set of rules that governs the exchange of data over the internet.
IP stands for internet protocol. IP allows you to address a message and drop it in the system, but there’s no direct link between you and the recipient.
Nobody owns these two protocols. But imagine if someone did. How valuable would the protocols be?
Think about this…
According to a Harvard Business Review article, more than half the world’s most valuable public companies have built business models on TCP/IP.
That’s $5.4 trillion in value traced right back to TCP/IP.
But the biggest names in the internet space – Amazon, Google, Facebook, Priceline, eBay, Netflix, Uber – are applications, not protocols.
Applications (or “apps”) are computer programs that run specific tasks. They include simple desktop apps – like calculators, clocks, and word processors – and mobile apps – like media players, games, instant messengers, and maps.
Google’s YouTube, Facebook’s Messenger, and Microsoft Word are examples of popular web applications. Companies own their applications.
The difference between the crypto bull market and the dot-com bull market is that for the first time, you and I can own a piece of a protocol.
That’s never happened before. The big money going forward is in owning the protocol, not the app.
Theme 2: Interoperability
Hundreds of new blockchains (decentralized ledgers) are emerging each year. On top of that, there are hundreds of established payment networks (centralized ledgers).
These established payment channels are used by banks and payment providers. We’re talking about giants like JPMorgan, PayPal, Visa, and Mastercard.
As the world migrates from centralized to decentralized ledgers, how do you get these different networks to communicate with one another?
This is a huge problem. That’s why we think the next boom will be in companies that allow different ledgers to “talk” to each other.
Imagine there’s an English speaker, German speaker, and French speaker in the same room. Neither can understand the other. This is the problem right now with payment networks.
They all “speak” different languages.
But what if somebody could create a technology that would allow these different languages to understand one another?
In the tech world, this is called “interoperability.”
The projects that are building easy-to-use interoperability will be the ones that become highly valuable.
Theme 3: Scaling
While in Berlin, I met a group of executives from drug giant Merck.
These folks are in charge of Merck’s European innovation group. They’re tasked with identifying innovative technology.
One problem these execs have with current blockchain technology is it can’t easily scale. In other words, they just can’t operate at the speed Merck requires.
This is a common complaint. I’ve heard it from executives in London, Boston, Silicon Valley, New York City, and now Berlin.
The most popular blockchain, Bitcoin, can only handle seven transactions per second. Like the old 56K telephone modems of the 1990s, that’s awful. But it would be a mistake to think that it will stay that way forever.
Just as those modems eventually transformed into the high-speed internet we enjoy today, it’s only a matter of time before bitcoin cracks the scaling problem.
Solving scaling will be the one event that will transform cryptocurrencies from a relative small-scale market to a global multitrillion-dollar market.
A New Playbook
The way you make money in cryptos is different from the way you make money in tech stocks.
Many traditional investors will lose their shirts in cryptos because they are looking for the next “killer app.”
As I’ve shown you, the money isn’t in owning the applications… but owning protocols with interoperability and the ability to scale.
What I’ve shared with you today is how crypto insiders are selecting their ideas. These are the guys who are turning thousands into millions.
And by following their game plan, we could join their ranks.
Editor, Palm Beach Confidential