Jim Duffy comment: Blockchain resembles the old utility sell-offs

Many of you will recall the early eighties and nineties when the Tories sold off BT, British Gas, the electricity companies and the water providers. We were all given the opportunity to buy shares in these new private entities. With discounts on initial offerings, there was a bonanza waiting for us all.

Jim Duffy MBE, Create Special. Picture: Ian Howarth
Jim Duffy MBE, Create Special. Picture: Ian Howarth

While the utilities companies were the poor relations on the Monopoly Board, they would now be worth hundreds of millions in the real world and we, the commoners, would all get a fair go at securing our own little portfolios. Nearly three decades later, Blockchain is offering its own “bonanza” with a host of new participants ready to make their play for stardom in the crypto currency markets. But, this time the assets you may decide to buy are digital.

Crypto currency is being traded on exchanges throughout the world. The current market capitalisation when writing this piece is $382 billion. Many market analysts are forecasting a $1 trillion market cap by the end of this year.

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According to Jesse Powell, the CEO of Kraken, a global Bitcoin exchange, 2018 will see accelerated growth for crypto currency. She puts this down to the fact that so many businesses are now built on and use blockchain technologies, while there are more investors who are curious about what returns they may get. But, while there is speculation on what may happen, many of the actual tech companies who are creating the buzz, are in indeed creating potential value for those who would invest.

Companies such as EOS, Zilliqa, Cardano, VeChain and Tron are revolutionary in what they are building. These five projects all have several things in common. They have faithful communities who adore them, albeit sometimes blindly. And they have a TestNet version currently released with a MainNet version of their own respective blockchains in the pipeline. Having one’s own MainNet in the blockchain world means standing on one’s own two feet. Many crypto currency projects are built using the Ethereum Blockchain.

In essence, these digital start-ups piggyback Ethereum to code their own products. So while they are producing a product that works, they are using someone else’s building to build it and store it. So, moving away from Ethereum and creating their own MainNets will give these projects a huge boost. With this push also comes the potential upside for investors.

Owning your own blockchain sets one apart from the rest. It means you can attract others to build on it. This makes it valuable. The idea is that by owning the blockchain [building] these projects can then rent out floorspace for others to build their own companies. This generates cash and scalability and this is where the big bucks are in the crypto world.

The Zilliqa project for example has a TestNet version currently available. This project has excited many crypto enthusiasts with the “sharding” concept of mining and the use of a new revolutionary language for programming known as Scilla that will be secure and more importantly – developer readily. With its MainNet going live in the third quarter of this year, this has great potential with many choosing to invest early.

But, Tron and the others are also releasing MainNets and are currently courting global digital exchanges and institutional investors. Their goals are a top five placing in terms of coin market cap, lots of paying customers who will build their games, utilities and companies on their blockchain and ultimately sustainable growing entities.

Like all investments, one must do the due diligence. Many of us bought into British Gas or an English water company as part of the shares bonanza. So too the Blockchain Bonanza offers investment opportunities. But, this time you will not be buying a water treatment plant or telephone exchange. No, the 21st century offering looks a lot different, with far more inherent risk and unknowns in a very unproven world.

- Jim Duffy MBE, Create Special