CRYPTO MOVERS AND PRICES
CRYPTO STORY OF THE DAY
On Tuesday, Following The Consensus: Invest 2019 Conference, Bloomberg Wrote An Article That Highlighted General Disappointment In The Non-Crypto Blockchain Use Case From Attendees - We Provide Context And Insights To The Write-Up
The article was titled, 'Blockchain Is Dead? Crypto Geeks Debate Merit Of Once Dear Tech.' The name of the piece was derived from actual comments from CoinShares CEO Meltem Demirors, CIO at CoinShares Group. In her address, Demirors stated, 'Blockchain is dead. After two, three years of spending a lot of money on this[...] What is the scalable revenue model and is there equity value that's created in these businesses? And arguably the answer is: not yet.' Mike Alfred, CEO of Digital Asset Data had a more upbeat take, referring to enterprise blockchain as, 'on the ropes' and noting that Bitcoin is a perfect example of a highly successful blockchain. Hassan Bassiri, a portfolio manager at LA-based Arca, commented that the market has begun to realize that public ledgers are not efficient and there are much fewer use cases than previously believed which make sense. The article quotes a CB Insights stat that highlights blockchain companies on pace to raise USD 1.6B this year, down from 4.1B in 2018.
Crypto Takeaway: Our views are most aligned with those of Hassan Bassiri. The excitement of blockchain as a do-it-all technology was misguided. The majority of databases are over-complicated by using Distributed Ledger Technology. It is both computationally inefficient and philosophically overkill for many of the use cases where it was tried. For example, French Luxury Giant LVMH spoke about creating a blockchain for some of its products so that users could, 'track their authenticity.' We struggle to see the benefits of such a project over items simply being labeled with a QR-code that hits an LVMH centralized database and verifies its legitimacy. A decentralized global currency, with the goal to cede control from any individual or group which is constantly under threat of attack, on the other hand, is a perfect use case for the computationally intensive yet secure decentralized tech. While alternative use cases for the technology may emerge, they must be looked at with a more critical eye. Everything does not need to be, 'on the blockchain.'