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Cryptic Currencies

May 2018

WARNING: this article could be out-of-date within a year, a month or even a week.


It might even be out-of-date by the time you read this.  That’s how fast the world of cryptocurrencies and blockchain technology seems to move.

Received wisdom (in my circles) is: “Bitcoin is a bubble, but the real transformation will be from blockchain technology.”  I am starting to wonder if that is the wrong way around.

Could it be that Bitcoin as a store of wealth and means of exchange is the most significant innovation to emerge from the blockchain revolution?


Could it be that everything else is (mostly) laudable attempts to co-opt Bitcoin’s technical genius to solve other problems for which we (mostly) already have efficient and robust solutions?

To be clear: the tsunami of ingenuity, energy and money swelling behind the development of blockchain-based systems will undoubtedly result in improvements to the way we do a lot of things.

But I am not sure any will have the impact of the earthquake which triggered the wave.


To arrive at this view, I have been doing what we often do when exploring new and emerging ideas: dive in at the deep end, be completely immersed and emerge dripping wet some time later having hopefully learned something useful.


Today is probably the first time I have been comfortable forming an opinion on crypto – and I am painfully aware how much more I have to learn.  Hence the health (and wealth) warning at the start.




Our research has taken us to back room private ICO showcases, obscure conferences and hundreds of meetings and conversations.


Asking dumb questions of people who seem more knowledgeable than us has been helpful.  It is impossible for me not to see signs of the late-1990s internet boom (and bust) in so much of the crypto craze: a time when, pitched on a sheet of A4, would get funded at a wild valuation. (Today it would, no doubt, be a white paper available to download at




ICOs / Token Sales are never about ‘money’.  They are only ever about changing the world.  Yet few of them have struck me as world-changing (disrupting the legalised marijuana supply chain?  Commercialising in-video product placement?).


Drawing parallels with the impact of the internet, perhaps the point is not the scale of changes to any one industry but the number of industries that will be impacted in time.


Make no mistake, there are some brilliant endeavours in particular sub-sectors.  Blockchain will lead to incremental and sometimes revolutionary improvements in some areas.  But surely not every one of them warrants the evangelistic fervour of its founders and promoters?




We have seen many such pitches.  Most offer “pre-ICO” fund raising terms at a discount to the main ICO valuation – a variation on the age-old “get in on the ground floor!” exhortation of salesmen since the dawn of commerce.


A lot is made of how this process of token sales cuts out those awful, voracious Venture Capital firms to “democratise” venture funding.  Presenters at some events were swarmed by attendees when they finished talking, no matter how mundane (to me) their project seemed.

Here’s the thing, though: I often came away feeling that actually, I quite like the depth of expertise and due diligence that the likes of Draper Esprit or Parkwalk carry out with my venture investments.  And I am happy to pay them for it, rather than engage in what seems like feverish, wild-eyed speculation.



We will continue to explore and learn.  For all my scepticism, the innovation and ingenuity in this space is breathtaking.


However, to go back to the start: Bitcoin itself seems like it belongs in a different category to the rest of the projects inspired by it.  Bitcoin is the creation of an unhackable, immutable and uncontrollable digital currency.

It looks like it is here to stay – for those that wish to use it.  It has the potential to become a widely-held, commonly accepted means of exchange and store of value.

If that happens, then 3rd January 2009, the day the first block on the Bitcoin chain was mined, will turn out to be seismic; and so much else that has sprung up around it will seem like playing in the sand.

Your comments and thoughts are welcome: @MonmouthCapital on Twitter or LinkedIn, or email me


Further reading

There is a vast amount being posted every day on cryptocurrencies and block chain technology.  Much of it sits near two extremes: on the one side shameless pumping of Bitcoin or any other coin that the writer / tweeter happens to own; on the other massively technical arguments about block sizes, nodes, sharding etc.  Not much in between!


Some notable exceptions that I have found useful include:


Article in Invesco’s “Risk and Reward” magazine, Issue #01 2018, entitled, “The latest frenzy: rise of the token”.  Download link here:  An excellent primer on the fundamental technology published by Invesco.


Dominic Frisby’s brilliant introduction to and short history of Bitcoin, entitled “Bitcoin: The Future of Money?”  Available at various book stores or as an e-book here:


There are many explanations of ICOs; this one is quite colourful: from Wired magazine.

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