I was reviewing my Share Portfolio yesterday as part of my regular process of rebalancing of my assets and I came to a realisation. I normally like to have a diversified portfolio to hedge against risk and the possibility that any one single investment could go bad. That is the reason why I haven’t gone ALL-IN on Crypto even though I think it is world changing technology. But I kept coming back to a single question that I was asking myself and I just couldn’t get past it :-
Crypto Technology is a game changer, not just for our Currencies but also for the way we manage and transfer our Assets. For a while now I have believed that Ethereum and its ERC20 Token protocol is being used in a way that very much resembles a Stock Market. People are using ERC20 tokens to raise capital, assign a “share” to investors and track the ownership of those “shares” just like a Stock Exchange does. Some of these Tokens are even paying dividends, just like shares. Crypto Technology is already doing this job of managing a Share Registry in a decentralised manner much cheaper, faster and more efficient than the Traditional Stock Markets do.
There are a lot of industries that are going to face major disruption from Crypto Technology and the Traditional Centralised Stock Exchanges are right in the cross-hairs. Already the Australian Stock Exchange has announced that it intends to adopt Crypto Technology to record shareholdings and manage the clearing and settlement of equity transactions, but in this day and age of Globalised Economies do we really even need National Stock Exchanges anymore? Is Venture Capital really enabled or inhibited by National borders? Should it be?
It seems to me that Ethereum and its ERC20 tokens are already proving it can do the job better and just around the corner we have EOS – potentially the Ethereum killer which is only weeks away from launch. EOS is potentially about to totally go “Next Level” on the underlying technology and give us ultra-high performance Smart Contracts that will compete with Ethereum. There is massive innovation happening in this Crypto space and I genuinely don’t see the old Traditional Institutions keeping pace. They are on a hiding to nothing and the writing is on the wall for them. They are slow, expensive, bureaucratic and they create significant barriers to entry. In my opinion all this makes the Traditional Stock Market totally redundant. There is now a MUCH better way and it’s getting better!
So for me the only thing I really need to do is wait for those companies listed on the ASX to put up an ICO and list themselves with an ERC20 Token, or the EOS equivalent. We are already seeing some of the gigantic Tech companies like Facebook and Amazon starting to look at launching their own coins and these are just the first couple of drops in the ocean. It’s going to become a flood over coming years and yes, it’s going to be chaotic, but those with the foresight and vision to read the writing on the wall….they won’t be left behind.
