We are seeing entrepreneurs issuing their own blockchain-based tokens to raise money for their networks, sidestepping the traditional, exclusive world of venture capital altogether. The importance of this cannot be overstated - in this new world, there are no companies, just protocols.
There will be many types of assets codified into the blockchain, and they are all not just going to be on the bitcoin blockchain - it's going to be a number of different assets here. And the best way to invest in that is a diversified portfolio.
Application-specific tokens, or app-tokens, are built on top of existing general-purpose blockchains like Bitcoin and Ethereum. For the first time, open-source project creators can directly monetize their open-source network.
For the first time, open source, peer-to-peer protocol developers can monetize their project on a protocol level.
Polychain manages a hedge fund that invests exclusively in digital assets. We invest exclusively in protocols, not companies, and we do this by investing in things made scarce through the blockchain.
I think the technology will get bigger and the price of Bitcoin will go up, so I'm speculating to increase my purchasing power. But I don't intend to sell the Bitcoin. I intend to hold it until there's a day where I can just use Bitcoin completely.
If you want to buy $10 of Ethereum and poke around with smart contracts, I encourage that. But use it as a technology, not as an investment, unless you know what you're doing.
In a world with many blockchains and hundreds of tradable tokens built on top of them, entire industries are automated through software, venture capital and stock markets are circumvented, entrepreneurship is streamlined, and networks gain sovereignty through their own digital currency. This is the next phase of the Internet.
Application-specific tokens, or app-tokens, are built on top of existing general-purpose blockchains like Bitcoin and Ethereum. For the first time, open-source project creators can directly monetize their open-source network.
Taxes have been complicated. Every single time I spend a Bitcoin, it's a taxable event. It's like I bought and sold an asset. It counts as an investment, with a short- or long-term capital gain or loss.
I think the technology will get bigger and the price of Bitcoin will go up, so I'm speculating to increase my purchasing power. But I don't intend to sell the Bitcoin. I intend to hold it until there's a day where I can just use Bitcoin completely.
I view Bitcoin as the more democratic version of money and value transfer because no one controls it... I expect the Internet to be around longer than any nation-state, so a nation-state-backed currency is actually less safe than an Internet currency in my mind.
I've been through a lot of moments when other people thought Bitcoin was going to implode, and in those instances, I generally have seen through inaccurate coverage of it.
It doesn't always make sense to have a token on the blockchain that is both useful and represents ownership - it has to be something where there's a network effect. That's why I cite Facebook as an example of what could be disrupted more so than, say, Amazon - which is bit more centralized and is not exactly a network of users in the same way.
If the Numerai fund performs well, that should lead to more assets under management, which should lead to more revenue for Numerai's general partner, which should lead to higher payouts for the data scientists, which implies a higher Numeraire valuation.
We are seeing more managed money and, to an extent, institutional money entering the space. Anecdotally speaking, I know of many people who are working at hedge funds or other investment managers who are trading cryptocurrency personally, the question is, when do people start doing it with their firms and funds?
If the Numerai fund performs well, that should lead to more assets under management, which should lead to more revenue for Numerai's general partner, which should lead to higher payouts for the data scientists, which implies a higher Numeraire valuation.
Polychain manages a hedge fund that invests exclusively in digital assets. We invest exclusively in protocols, not companies, and we do this by investing in things made scarce through the blockchain.