23 Jul Thoughts Edition 2
This is the second edition of the “thoughts” series. A space where I express my feelings about projects, development and anything surrounding Blockchain and the Ardor world. The first edition was posted on ardor.rocks, but starting from now this series will continue only on the nxter magazine.
In this second edition, my first thoughts go to MPG and figuring out how the project could take advantage of its unique position in the blockchain space.
Real estate has historically been a safe investment besides some fluctuations caused by major systemic crisis.
And Max Property Group offers an easy solution to invest into real-estate without massive funds: the Max Crowdfund platform.
By simply registering on their website, it’s possible to invest as little as 1000 euros into their catalogue of real-estate assets. And returns are considerably higher than other form of conventional investment. Yearly returns are around 10%.
And on top of this, Max Property Groups is using Blockchain technology to store and manage its assets. This is an extraordinary use case. One of those use cases that should make it clear to everybody that blockchain technology is here to stay and for a very long time!
Instead of having track of investors and investments in some centralized database, the data is stored on the Ardor blockchain, making it transparent, audit-able and secure. Moreover, blockchain is already considered legally binding in some Countries like Italy, therefore fitting very well to the real-estate use case. On top of that, Ardor allows to add intelligence to everything being done on the blockchain, from exchanging assets on the decentralized exchange, to creating approval models that allow certain actions only when selected users approve those actions. And much much more. Have a look here where I wrote an example of how a real-estate property sale could happen on the blockchain.
For the investors in the MPG token I wish there was some real incentive to buy the token. At the moment, the only reason to buy is speculation, but in the case of MPG there’s no trading volume so that’s not going to work. Other reason to invest in the MPG token is the buy-back and burn MaxPropertyGroup promised at the time of the token sale.
But imagine if holding MPG would give you a better return on the real-estate investment. Imagine if holding 50’000 or 100’000 MPG would give you a benefit in the real-estate crowdfunding investment. As an example, holding MPG tokens from 100’000 to 1’000’000 would give you an extra return on the real-estate investment between 0.1% and 1%. This or anything in this direction could help both the MPG market and the real-estate crowdfunding, and would let non-crypto investors explore the world of crypto which, in my opinion, is a great opportunity.
Besides the MPG great use-case, my thoughts fly to the crypto scene, more in general.
The value of Bitcoin, for example, and its dominance in the crypto overall market cap.
Why is more money going into Bitcoin instead of its competitors? I really cannot get that. It’s either me being super naive or there’s something wrong in the perception of value of who believes in this technology.
When I first discovered Bitcoin, in 2013, it was mind blowing! This unstoppable form of money was amazing. And let’s be fully honest here… amazing was also how much value Bitcoin was gaining in terms of $ and the fact that a piece of hardware (miner) could create money in your basement.
But after my basement started to get warmer and warmer, and before it would go on fire, I started to look for alternatives:
– Dogecoin / Litecoin / etc: clones… boring
– Peercoin: ah, interesting… clone, but a step towards making this technology a bit more clean! This is the way forward in a melting planet
– NXT: final stop. This is it. This is clean, it can do what Bitcoin and clones can do and much much more. A new mind blowing world opened in front of me
There was no doubt, not one, that this would not be the new leading crypto, but no… it’s not about technology, it’s not so simple… it’s all about “bag holders” (a definition I love) and envy.
All the NXT coins were pre-mined and distributed to the very few investors that believed in this project, and when it started to gain traction here came “Envy” and with it, all the blaming of bad distribution, being a scam, etc.
With time the crypto troops started to position themselves on certain projects and therefore were reinforcing their “bag holders” positions. And the “bag holder” doesn’t care about anything related to development, partnerships, long-term roadmaps, business sustainability that will lead eventually to the use of these tokens and therefore creating demand for these tokens and consequently giving them a “real” market value. No, the “bag holder” cares about $, and only about $ and the “bag holder” is very impatient. $ have to multiply quickly otherwise patience runs out and at the first signs of bear market, the “bag” moves to the next promising $-multiplier project. Unfortunately in the last year $-multiplying projects (2012-2014 was the year of the clones, 2016-2017 was the year of the ICOs) have reduced dramatically and therefore at the first signs of bear market, apparently the money flows in Bitcoin.
To give the full picture of the “bag holder” world, there is also another category of “bag holder”, the one that was not quick enough to move away from unsuccessful positions. These are split in 2 sub-categories:
– Those that aggressively ask others to do something to make the price go up so the “bag” can eventually be sold without a loss;
– And those that become lifelong faithful “bag holders” of the projects they are stuck with. They live in the hope that the $ eventually will multiply one day.
Common driver? This one: $ and quick
Some may debate saying that the same is valid for traditional stock markets. That’s true. Final goal is of course $, but in that case you can do a couple of calculations based on earnings, expected dividends, etc. It’s not about pretty websites and pretty boys. And this technology is so immature that there is no real widely spread application out there, so there is not much to measure at the moment. This is why, the old crypto-say “don’t invest in crypto more than you can lose” is still valid.
The other interesting thing in this investment space are the motivations.
Bitcoin is leading the market right now with around 66% market cap share of all money in crypto. And respectable advocates of Bitcoin continue to deliver the same and repetitive story: “the value of Bitcoin is coming from its scarcity“, “Bitcoin is the digital gold“, “A store of value“.
Funny thing is that the same respectable advocates were saying some years ago that Bitcoin was the new cash and that it would replace the fiat currencies because of the super low transaction fees and that it was bringing banking to the unbanked. And this shift in their belief is totally acceptable. You have a big “bag”, you adapt your belief to the circumstances.
The fact is that Bitcoin was a fantastic idea, but unfortunately it unfolded in the wrong way: mining pools have centralized the network, energy waste has exploded, etc. But how to blame it. It was the first of its kind and didn’t have a chance to change because it was forced to remain in the original form because some of the powerful lobbies involved would have been affected by the change, eg. the mining pools, mining hardware producers. etc.
And yet, here we are… 11 years after Bitcoin was created and still using the first primitive form of this technology.
Besides NXT, think about Ethereum, for example. This was a real step forward in the evolution of this technology and it was acknowledged by most of the people in the space, and yet it’s sliding down in the market cap race.
So what does this tell me? That there is no rationale in this market. It’s a bitcoin OG “bag holders” magic making market. They spread the mantra “digital gold“, “scarcity” and investors remain captured like Frodo when spotted by the eye of Sauron in the Lord of the Rings. Rational investors keep their sight away from the eye of Sauron and prefer to use common sense. To be clear, the “scarcity” argument is a valid one, but that’s valid for most of the cryptocurrencies out there, not only Bitcoin.
Let’s for a moment forget about the history of this technology, Satoshi Nakamoto, the value in terms of $, Pomp, Faketoshi, etc. Let’s close our eyes and imagine what we can actually do with this technology. And that’s a lot!
– Money of course. But does it need to be Bitcoin? No, because Bitcoin is extremely volatile and is very inefficient. But blockchain technology is excellent for this. Solution: use a stablecoin like AEUR until cryptocurrencies become more stable in terms of $ or until cryptocurrencies replace fiat currencies and therefore our life is priced in the cryptocurrency we choose. In that case $ fluctuations will not be a problem. AEUR can be used all over the world, you can bank the unbanked and you don’t risk to unbank completely the unbanked by causing their little savings to vanish in 10 minutes of crazy volatility.
– Decentralized applications. I’ve built smartvoting.net because Ardor has that wonderful feature inbuilt and I had to do something about it. And many more trust-sensitive related applications can be built using this technology. Does it have to be Bitcoin? No, Bitcoin cannot do any of that. The OGs will surely disagree, but “bags” are stronger than reason and facts.
– Micro economies. You can create tokens as loyalty points that can then be used for services, etc. See https://triffic.world/en or ardor.rocks where $ROCKS are distributed to users and these can be used to buy Ads. Do I need Bitcoin? No. Can I do this on Bitcoin? No.
– and much much more
Let’s be honest, the “digital gold” was an extraordinary starting point but not the end point. It was just the beginning of this amazing technology, and so shall be its value on the market. There are platforms out there that have huge potential and that would actually have an investment reason. Ardor, for example, doesn’t waste energy, solves blockchain bloat, can do what Bitcoin does and a million things more, can be used to do real things in the real world. And this means that there are transaction fees paid for real things and to pay those transactions one has to buy Ardor. When serious companies will understand the beauty of Ardor and will have a child chain on it or an asset on Ardor, they will use the platform to do real things and will have to pay fees in Ardor which means that there will be a real demand for Ardor tokens. If you ask me, that’s another league of investment opportunity compared to a token that is bought because of its scarcity and mainly for speculation making the lucky ones make more $ and the fools lose all their $.
Full disclosure: I am a “bag-holder” of MPG and Ardor and zero Bitcoin.