04/04/2022: Weekly Briefing
It “seemed less an industry than a lottery: Nobody knew if [it] would prove a lasting benefit to mankind or an evanescent wonder. If [it] created many millionaires, [it] left many more paupers.”
It feels like “it” here is crypto, right? Surprisingly (or maybe not that surprisingly), it’s actually about the beginnings of the oil industry. I’ve been reading Titan by Ron Chernow, his biography of John D. Rockefeller, and when reading this passage I couldn’t help but think about how relevant this is to the crypto industry.
If I were to try to pick the right coins or NFTs out of the thousands of possibilities that are going to make the most money, it honestly would feel like playing the lottery. It’s not even about being smart enough to pick the right ones; it feels like at this point the most important factor is timing–buying low and selling high. For those of us that have a day job, this isn’t really feasible. Nor is it something I would want to spend my time doing even if I had the time. I’m more of a buy and hold long-term person.
But I do believe in the long term potential of this technology. (Hopefully I’ll be right…?). So I’m trying to find ways that feel less like a lottery and more like how Rockefeller felt about refining oil–”Searching for oil was wildly unpredictable, whereas refining seemed safe and methodical by comparison.”
What will be crypto’s version of refining? Fiat to crypto on ramps, trading data, KYC, or something else? I don’t think we know quite yet. But it’s fascinating how ‘history rhymes’.
And it feels like we are back at the infancy of a new oil industry, where the focus isn’t on black gold this time but on digital gold. And where self-made men and women are the “new demigods, and a copious self-help literature sermonized that young men who worked hard and saved could enter the millionaire’s pantheon.” This second insightful Ron Chernow quote illuminates how we are inundated by stories of riches and success in crypto. But in the end, there was only one Rockefeller and a lot who lost money in the process.”
Money & Crypto
🎧 I spoke with my Brazilian friend Andre about how crypto is being used around the world, why its useful when there’s devaluation, and what are the pros and cons of a central bank digital currency (CBDC).
Sam Bankman-Fried, the 30-year old billionaire founder of FTX, who plans on donating all his money (Bloomberg)
What are crypto bridges? (I’m embarassed to say that this is the first time I had heard of them.) (Bloomberg) and how hackers stole $540m off of the Ronin bridge (Wired)
In addition to the 30% capital gains tax on crypto transactions, India enacts an additional 1% tax on digital asset transfers above a certain threshold (Bloomberg)
Indonesia levies 0.1% tax on crypto transactions (The Block Crypto)
Digital Markets Act passed in EU (The Economist)
Etc.
Time’s 100 most influentional companies include Athletic Brewing, Skims, Supergoop, GoodRX among others
Ned Johnson, founder of Fidelity, passed away
Podcast Pick of the Week
🎧I’m shamelessly self promoting this week. I restarted the pod after a hiatus and spoke to my friend Andre about how crypto is used around the world.
P.S. Message me with recommendations of someone you’d like to hear interviewed
Disclaimer: All opinions are my own. The content on this site and on the podcast does not constitute financial, legal, accounting, tax, or investment advice.
