Hi,
one of the guys that I follow, especially of his easy, direct and constructive way of communication is Ray Dalio. I wrote a posts a few weeks ago where he went into the math of 1+1=3 and why communities are better than going solo.
He came yesterday with a statement on LinkedIn, where he expressed his view on Bitcoin, not the one covered by the media. The article can be read in here.
He is even stating at the beginning of the article that this is his view, not the one covered by the media.
The only thing I ask of you is that you read what I wrote here rather than pay attention to the sound bites in the media.
Also he is stating that he is not an expert in the field and that his lack of knowledge can lead to biased views, which for me is fair enough. He compares it to his market knowledge where he did have an impressive track record with Bridgewater Associates, that took him in the double digit asset value.
I believe Bitcoin is one hell of an invention. To have invented a new type of money via a system that is programmed into a computer and that has worked for around 10 years and is rapidly gaining popularity as both a type of money and a storehold of wealth is an amazing accomplishment.
The simple way of saying it, makes people that never used it understand it. I think this is gold and speaking of gold he describes very well the disruption it brings and the way it is becoming a store of value like a gold:
That, like creating the existing credit-based monetary system, is of course a type of alchemy—i.e., making money out of little or nothing. It, like the making of credit that made bankers rich starting with the Medicis around 1350, is making its inventors and those who got in on it early very rich and has the potential to make many more people very rich and to disrupt the existing monetary system. Those who have built it and supported the dream of making this new kind of money a reality have done a fabulous job of sustaining that dream and moving Bitcoin (by which I mean it and its analogous competitors) into being an alternative gold-like asset.
This is amazing for him that there are not so many store of value assets in the world that can be held like gold.
He mentions also the supply issue that was attributed to him in the media:
I should clarify what I said about its supply. Although Bitcoin is limited in supply, digital currencies are not limited in supply because new ones have come along and will continue to come along to compete so the supply of Bitcoin-like assets should, and competition will, play a role in determining Bitcoin and other cryptocurrency prices. In fact I assume that better ones will come along and displace this one because that is the way the evolution of everything works—i.e., new ways of doing things and new things always have and always will replace old ways of doing things and old things.
He definitely speaks about the whole cryptospace with it's unlimited possibilities and that there will cryptos that will be better than BTC and replace it. Maybe this one we all are using?
His has two major concerns, one is security and the other is the state.
On the first, we know that there is a need of a lot of computer power and time to be able to even hack an account, so this shall be out of the issue for the next years.
But on the second his statement is fair, as the more successful it becomes the more dangerous it is for BTC due to the governments and regulations:
Starting with the formation of the first central bank (the Bank of England in 1694), for good logical reasons governments wanted control over money and they protected their abilities to have the only monies and credit within their borders. When I a) put myself in the shoes of government officials, b) see their actions, and c) hear what they say, it is hard for me to imagine that they would allow Bitcoin (or gold) to be an obviously better choice than the money and credit that they are producing. I suspect that Bitcoin’s biggest risk is being successful, because if it’s successful, the government will try to kill it and they have a lot of power to succeed.
This is the biggest danger, BTC needs to grow faster and maybe in silence till it is unstoppable by any government.
In the end he is still conservative on it, but let's a big open door open:
Bitcoin looks like a long-duration option on a highly unknown future that I could put an amount of money in that I wouldn’t mind losing about 80% of.
What do you think of this article? How do you see his views?