Tokenization and Bitcoin, the new catalysts

Will tokenization be more disruptive than bitcoin? Let’s do it in parts so you can draw your own conclusions based on the inputs and data I am going to share with you. Be as neutral as you can when reading it, question every word and I encourage you to keep researching, that’s the only way that really matters, being right or wrong is more a matter of egos than intention.

Bitcoin:

Two absolute truths around it, the first being able to assure you that the mistake of many against bitcoin was not analyzing it and investigating it, with the importance it deserves and pursuing its price continuously. The second is that few people understand that there is no cheap or expensive here, that we are not talking about a company but a new form of money that is valid thanks to circulate on a different digital plane but native to the Internet. It was Satoshi Nakamoto who said “Bitcoin will be used by everyone or no one”, and we are getting closer and closer to fulfill his first statement.

We are in the middle of the perfect storm. I say this because bitcoin is being politicized in such a way that many countries already see it as the perfect counterpart to the dominance and subjugation in terms of blockades or sanctions imposed on them with the US dollar. If they show rebellion or disobedience with the current status, another reason that leads to think about its politicization is to see how Nayib Bukele, the famous president of the republic of El Salvador is requested by other presidents to advise them in the race towards the legation of bitcoin as legal tender for their countries (imagine, for example, that the pension funds of several countries enter in bitcoin), all this seems to be leading us back to the gates of what looks like a new great upward movement of bitcoin. Nobody knows when it will happen, nobody knows how far it can go, but what is clear is that the smartest thing to do now is to think less and act more.

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I spend most of my time as an analyst and manager of crypto assets within BELOBABA to understand and then simplify. This has helped me a lot to know certain rules of the game and set simple tasks for myself to optimize the time invested in understanding. What I first understood is that if you invest in bitcoin it is not to get extra money every month, but to seek a much higher prize, since it has unlimited potential. The second thing I understood was to know how and with what to speculate (different from investing) with everything that orbits around it, the so-called Altcoins where I have really spent a large part of my time in the last 6 years. In order to arrive at a certain level of understanding, it has required my best version as a person and as a professional, sacrifice and use all 6 senses (assessing technology is a wonderful art that is difficult to forget).

Thanks to traveling and sitting down with the projects, to be able to listen to them and understand their culture and motivation, before even valuing their idea, or attending many hackathons where code is hacked and the real industry emanates, I was able to develop an investment thesis called “Selective Speculation” and that basically boils down to investing only in talent, the rest is straw and distraction. Look at it from this perspective, no one who invests in bitcoin does it in the “little coin”, they do so in its network even if they don’t know it, which is what it has and gives its value along with many other qualities. This point is interesting because unlike other blockchains, here the price is directly reflected in the token or cryptocurrency.

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Where can be the error for many to say and insist that bitcoin is worth 0? In confusing service with decentralization and this is easy to understand when we see announcements of multinationals or banks using blockchain to develop their new value propositions (like Bayer’s announcement, where it was indicated that it joins VECHAIN using its blockchain to guarantee the traceability of its medicines), it must be very clear that Bayer has invested money in the technology or the VECHAIN foundation, in exchange for receiving advice and service from VECHAIN, but “Bayer has not bought a single VET, that is the big difference” . VET is a UTILITY and it only has value if it has utility. If Bayer wants to invest real money either to hedge against inflation or to design a plan B in its treasury, it will do it in a decentralized network, it will do it in bitcoin as MicroStrategy has done for example.

To end this part, I ask you to invest your time in understanding its fundamentals, the network effect, its values, its monetary policy, its decentralization, the sum of technologies that gave rise to blockchain or the enormous multi-million dollar mining industry behind it. Only then will you begin to see it differently and make decisions in line with your own criteria.

Blockchain:

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Blockchain allows to register information, for this reason the “Token” has all the meaning and use case in blockchain, regardless of its nature and the value it registers. Although somehow it seeks to fit the legal nature of a token, it is clear that it has a number of advantages that make it very interesting to implement, both for the energy sector, such as cultural, banking, in education, services, transportation, shares or health and is that all this can be represented by a digital file capable of being easily fractionable, going from illiquid to liquid those fractions so it changes many concepts, and the first is that whoever does not adapt will not be opened to new emerging economies.

Careful, I do not mean that many businesses will disappear, but we must understand that little by little many of our activities will not be done in person, giving an APP or a DApp the same validity as if we would do it in person. The technology in this case will serve as a means of proof, since it will allow validating that any movement with a token has been made on X day and in X way. The “Oracles” will perform excellently the function of registration, giving or not legitimacy to a transaction, no doubt at tax level will gain in transparency and collection, since there will be many transactions and each transaction will have its tax included. In terms of large transactions, global and efficient markets will undoubtedly be opened, interconnecting funds listed in Spain with foreign funds.

By tokenizing, even Facebook “Likes” can be tokenized, but to tokenize requires a blockchain that not only serves for payments (Bitcoin) but can also transmit terms and conditions (Ethereum). What makes the token really interesting is the Smart Contract that interacts with it, that way we will never confuse the value of the token with the value of the blockchain where it circulates.

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Investors are changing their tastes and predilections when it comes to investing, gradually moving their money from traditional startups to tokenized startups, that is, they have gone from investing in viable ideas to investing in time and liquidity. This is easy to understand as startups segmented into small chunks, which can be liquid and easy to trade, are becoming more and more desirable, not to mention the root-based competitive advantage that token-funded companies have as they rise. to a global and hyperconnected market where money can come from Singapore as well as from Mali or Kazakhstan. Going back to the investment side, I think it’s time to start shedding biases and old beliefs to become a bit more sophisticated and adapted to a new medium and asset. An investor who analyzes and bets on a tokenized company from the beginning knows that he can manage its liquidity, eliminating the vital time factor to generate that liquidity, before running the risk of losing his investment.

The previous failure experienced in this sector was clearly delayed with the ICOs of 2017 and 2018, where we abandoned common sense and logic, to move to a model where we gave value to a token that initially had no proposal, no service , I don’t even know what it worked for in many cases. If you do not get that digital asset with an underlying value, we are not going to get much out of that investment.

Fortunately, today we have managed to turn this problem around, and we already have clear models of projects where the token is the central axis. At this point, the token is no longer a mere financing tool, but a tool that generates incentives and the need for acquisition. With the network itself setting the price of the token and not a crazy market driven by the promise of easy money.

Conclusion

It is clear to me that there is only one promise around Bitcoin, Blockchain and Cryptocurrencies: if you learn the basic skills for its handling and management, and educate yourself a little in this technology, all of this will be very useful to apply in different areas of your life, both personal and professional. Controlling, managing, saving or transferring your own money are unique, tremendously satisfying and enriching capabilities that give you as an individual “FREEDOM”. A value forgotten by our comfortable life, but that allows you to make your own decisions without the influence of anything or anyone.

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