Investing in the Modern World
Blockchains will change the world and make you money
In previous blogs I have stated that I like investing in new technologies so long as it is clear they have found a way to make life better, and people will flock to the new paradigm.
There are several such new technologies, one of which is AI, which I have discussed in an earlier series, but which rather alarms me, and has a major stumbling block which is going to take some serious negotiation, so I am leaving that aside for the moment.
The next relatively new technology is blockchain, which has been made famous by the rise of bitcoin.
Blockchain is going to be used as the underlying technology of so many of the new methods for doing things more simply and more cheaply. As such, it will be successful. When governments eventually wake up and get with it they will find that blockchains will run every government department with just a handful of people, instead of the tens of thousands employed at every level, doing things which humans dont need to be doing. Those things can be automated.
Just one example from dozens. I use a Spanish insurance company which operates through blockchain technology, using intelligent contracts which are completely automated. If my flight fails, I dont even bother to make a claim. The insurance company doesn’t bother to check the details, that is done by the relevant oracles. They dont collate and investigate the situation, the intelligent contract has already sorted that. Within seconds of a failure on one side of the system the insurance claim is paid out to the other side.
Think about it. Your flight is delayed or cancelled and you miss something important. Within minutes your claim is paid into your account allowing you to make alternative arrangements right there and then.
That is revolutionising the insurance industry. Invest in it.
That means it is also sidelining the banking system. Who needs banks? Sell bank shares.
I live in Portugal. Their banking system is positively medieval. A few weeks ago I visited a bank, (first time in years). I needed to pay someone. First I had to drive into town. Then I had to find a parking space and walk back to the bank. I queued for about five minutes, and then tried to pay the sum to the right bank account. I had all the details. The bank clerk buggered about on a computer screen, asked for my details. Quite why, I dont know. Who cares who is paying the money? The important issue is ‘where is it going’.
After ten minutes I was asked to wait. Ten minutes after that I was told there was a problem. They didn’t seem to know what the problem was. I asked for the return of my money, left the building, and arranged to meet the person and hand over the money personally. Who needs that sort of banking system?
Using a blockchain based payment system earlier today I paid a colleague of mine based in the Philippines. It took me less than 15 seconds. I didn’t need to move from my seat. Who needs banks? It also cost me $0.0003 in fees. What are you paying Visa?
This is going to take over the world, and is going to sideline government issued digital currencies.
How long before Meta (Facebook) has another go at issuing their own currency?
How long before rather a lot of companies follow suite?
Things are changing. That’s when you invest, when new technologies are just getting started. Select the ones that serve a need, and invest before they lose that asymmetric bias in your favour.
As I say in the title of my book on making money (Being Rich is Easy): You have to look around and go after the deals. As I also say on the cover of my book, which shows a picture of my swimming pool: “Dont forget, you cant swim if you dont take your feet off the bottom.” I hope you understand what that means.
OK, maybe we move on to something different next week, unless you suggest a topic for me to delve into.
Here’s the link to my book Being Rich is Easy:
Being Rich is Easy: Amazon link: https://www.amazon.com/dp/B0CLS37VX1