The Wild West of Finance. The Look of Eagles may not necessarily anticipate “being in the money.” Along the Wild West of Cryptocurrency racetrack, which horse is safest to bet on?
“It is the Wild West. It attracts cowboys. So a sheriff is a good thing.” -Cameron Winklevoss
By Prashant Doshi
As an Indian-American, I can straddle the best VALUES that come from both cultures. Indians tend to be conservative investors – investing in things they can touch, hold, see or feel. Americans tend to lead in bold innovation, breaking through into the new ground, which has been the basis of the evolution of the country. Thinking with both hats on can help one navigate the exciting and unchartered territory of “blockchain” and “cryptocurrency.”
Firstly, what is blockchain? It would be best to watch this video by the World Economic Forum if this is the first time you hear this word.
Blockchain is a technology that allows for TRUST to exist via a considerable, decentralized consensus across the globe. As such, there is no need for a third-party intermediary such as a bank or other institution. This technology uses the most robust encryption publicly available based on the NSA’s standards called SHA-256 to secure the data and validate that the transaction occurred. Also, unlike a bank whose transaction history is private, this data is public while keeping the transaction party’s information completely secret.
This technology is in short – going to change everything about the way we interact with one another, the way money will be sent from country to country, and how we transact business, globally. There is no banker today that can be happy about the existence of blockchain, as their business models are all called into question.
What is crypto-currency? It is digital money that is secured by cryptography. As such, it is in inherently tricky to counterfeit, unlike “real money.” Now, this is where one must jump across the chasm of belief. As Indians, we value the confidence in money. It was not too long ago that we stored massive amounts of physical cash in the form of notes underneath our beds, in our cabinets or other vaults at home. Demonetization changed all of that, as we had to turn in all that physical cash into the bank and get new notes. In a way, blockchain and crypto-currency maybe THE thing that advances India out of the dark age of corruption and graft that prevents much of the world from investing in the country.
Physical money is not real; Indians inherently know that probably because of how devalued the rupee has become over time. However, Indians value cash close to God; they even pray to specific Goddesses for it. Most Indians don’t store their wealth in money but in things like gold and property, which is why there is relatively less liquidity available for investments. Blockchain and cryptocurrency will change all of that.
This article begins a series on the topic so don’t try to understand all of it at once. However, if you are a shrewd investor, now is the time to come to terms with this global movement. It will at once disrupt all the centralized and concentrated power in India; it will also lead to the liberation of the power of the masses. You may want to question whether being long on your favourite bank stock is a good idea.
Do NOT be tempted by the highly publicized returns of things like BitCoin to bet the farm on the latest ICO – “initial coin offering.” So, an initial coin offering is a way to use a new type of crypto-currency to raise funding for a company, venture, or project. This offering empowers many entrepreneurs globally to access capital without regulation. The good news is that it is not regulated; the bad news is also that it is not regulated. The Latin phrase “caveat emptor” is useful here – “let the buyer beware.”
From a technology point of view, one has to understand that launching a new company or venture has never been easier. The underlying programming code for blockchain is “open source” – that is, it is available freely and openly to anybody that has an internet connection, globally. Without getting into too many of the technical details (which, if you are interested, you should invest the time to read Satoshi’s original white-paper on BitCoin), the point is that one can launch a new application on top of the underlying technology very quickly and cheaply. There are many services globally now to then issue a new crypto-currency and offer that digital currency to an investor via an ICO. One quite literally creates money out of nothing, a function traditionally reserved for the central banks of the world. Can you imagine the power that an entrepreneur feels in outsmarting the State Bank of India or the US Federal Reserve?
Moreover, in doing so, the money, called tokens, can be purchased by almost anyone, anywhere using their local currency. Thus, the issuance of a new coin TRANSCENDS the exchange problem, which any good Indian is aware is highly controlled and challenging to transfer money overseas in large amounts outside of the banking system. That is merely ONE of the many transformative implications of blockchain and crypto-currency.
Now, before you rush off to issue your new coin, remember what the point of a digital currency would be – to enable cross-border flows of capital and value. If there are thousands of coins on the market (as of this writing, there are at least several thousand), and the number of different coins exceeds the number of currencies available today, it is a natural conclusion that most cannot, by first principles, survive. More than 90 percent of them will fail. In America, there is a saying that goes like this – “there is no such thing as a free lunch.” Let’s remember that saying when you turn in your hard-earned “real currency” for a “crypto-currency.” As of now, your real currency can purchase food, energy, gold, property, and much more. Crypto-currency is only beginning to be used for any of those hard assets. However, it is happening, and fast. In the US, the well-known coffee brand, Starbucks is going to allow for coffees to be purchased via BitCoin. Furniture online can be bought on Overstock.com via BitCoin. Also, there are even investors that are selling all their real property to go in on BitCoin. Something is happening that warrants serious attention.
For now, the most significant thing you can do for your family office or portfolio is to become deeply educated in the “wild, wild west” of the new technology frontier. At some level though, this is going to make the easiest sense in areas where capital access is most limited, as the vast majority of India that is in small villages and more rural areas. They already have such limited access to “real money” that this technology gives a massive opportunity to have intra-community wealth building because every community needs to produce, consume, trade, and share. Enter in blockchain and crypto-currency. The most excellent opportunity for these new technologies lies not in the major urban centers where capital and knowledge flows are already intensive and fast, but in the vast majority of the world that is disconnected from the wealth of a concentrated few. Move over micro-lending, blockchain, and crypto-currency are here, and they don’t require paying interest to benefit from them.
Tagore wrote, “the highest education is that which does not merely give us information but makes our life in harmony with all of existence.” The potential of blockchain enables us as humans to collectively be more in harmony with Natural Law. It would be wise to determine whether that VALUE synchs with your investment and spiritual motives.
Prashant Doshi Chairman, DG Chief Evangelist, Shreem™ LLC (Honolulu, Hawai’i) Founder, The Spiranomics™ Institute (Edinburgh, Scotland) Global mobile: +1.949.547.0223 firstname.lastname@example.org DOSHI is a principal investor in and Chief Investment Officer of the DG Family Office that includes three asset classes – real estate, transformative technology, and alternative financial vehicles (e.g., crypto-currency). The 5-year returns have outperformed both Berkshire Hathaway and BlackRock. DOSHI is the Chief Evangelist for Shreem™ LLC, a new type of enterprise whose mission is to improve the lives of humans using technology, innovation, and insights. DOSHI is also the founder of The Spiranomics™ Institute, an innovation hub dedicated to the transformation of economics, incorporating timeless spiritual principles into the field. He hosts an online radio show, interviewing luminaries that embody such principles. DOSHI was the co-founder & owner of Exemplar Corporation, Exemplar Human Services, Exemplar Analytics, & Exemplar International. He has an extensive background in big data, operations, and system design. He previously grew and led Exemplar’s activities, especially in California, as well as with several of the largest global providers. Exemplar companies were profitable within three months of inception. DOSHI consulted to Mayor Guiliani’s Administration in NYC, having designed the Harvard-recognized, CenterStat program, which combined with JobStat, was mostly responsible for placing 133,000 welfare recipients into jobs in 2000. DOSHI was present during 9/11 and subsequently ran the Disaster Relief Assistance Center in NYC, coordinating with numerous Federal, state, & local agencies as well as many NGOs (e.g., American Red Cross) to serve the thousands of people tragically affected by 9/11. DOSHI has been in 8 different industries, including cyber-security, distance learning, media & telecom. He has worked both domestically and internationally, consulting to government agencies & companies on socio-economic policy, technology & entrepreneurship. He has worked on big data and analytics initiatives that include the national telecom systems of three European countries, including the Netherlands, Sweden, Switzerland. He resided in The Hague, Netherlands. DOSHI graduated from M.I.T., having studied both chemical engineering & economics. He received awards of IFC Man of the Year, Northeast IFC Man of the Year, and the Distinguished Karl Taylor Compton Prize, MIT’s highest prize for sustained contribution over four years to the MIT community. DOSHI is trained in Harvard’s Principle-Centered Negotiations and is a certified mediator in the U.S. Besides, DOSHI has achieved the highest levels of Neuro-Linguistic Programming certification, with focus on motivation & inspiration. He is an inspirational public speaker, including venues such as the UN General Assembly in NYC and multiple universities across the U.S. DOSHI travels the globe with his fantastic wife & daughter, educating her in the U.S., Europe, & Asia. DOSHI considers himself a global citizen & timeless student, honouring people from all faiths, cultures, and perspectives across the world.