I’ve called out blockchain blockheads before. This evening I want to highlight a trifecta of crypto news stories. These stories all illustrate the ripple effect the current gasbag of blockchain hype is having in the real world.
Although not always negative, these effects show how even a virtual market can start to effect and distort other markets.
As I trawl through the cyber mines looking for news, connections and hot tips etc. sometimes a pattern starts to emerge. The pattern in these crypto related stories tell me this tech is breaking big. The market is like the wild west, and the public is piling in, even though blockchain technology might as well be goat entrails and black magic.
As a result, the bottom feeders, scammers and quick-in-out group are out in force. Which bring us to crypto news story #1.
Like, do you even Facebook anymore?
Today, Facebook (NASDAQ:FB) announced it’s banning all advertising promoting cryptocurrency. Doesn’t matter if you are a fly-by-night cayman island exchange running out of your uncle’s closet, or a well capitalized firm with all the best brains and money behind you. You’re shit outta luck.
FB does leave the door open to loosening up in the future. Again, primarily to wait until the scammers and the hypemongers move on. Once the market has stabilized and real criteria are settled on you can be sure crypto will be back on the ad menu.
I think this is a very good thing they have done. Facebook has some of the lowest barriers of entry for advertising, with the best and scariest targeting algorithms. It’s absolutely one of the fastest and easiest ways to find low-hanging fruit quickly.
It’s why so many ‘I-HAVE-A-FERRARI-AND-YOU-CAN-HAVE-ONE-TOO’ ads and seminars focus on it. Easy to learn, hard to master. Mastery isn’t what these folks want. they want to hoover up as much of grandma’s cash into Bytecoin (not a thing) and head for the hills.
I just wish FB would use the same abundance of caution with crazy propaganda.
Insert Coin to Play, lots of Coins. No.. more, more… more.
The next crypto news story is something I’ve been watching for a while because I am looking to build a new PC. I’m stuck because consumer graphics cards are in extremely short supply. The ones that are available have a nice hefty premium attached.
Consumer GPUs or Graphics Processing Units are still the cheapest off-the-shelf option to get a blockchain mining rig up and running. In early days, anyone with a half-decent PC could mine away.
Today the principle is the same, but scaled wayyy up. For newer Blockchains you can still get a really good bang for your buck with an armful of NVIDIA or AMD graphics cards and a good HVAC system. (those things can get hot).
With ridiculousness like Dogecoin hitting multi-thousand valuations, everyone who missed out on bitcoin in 2014 is rushing to buy graphics cards to mine [INSERT FLAVOUR OF THE MONTH].
The manufacturers are a little worried – sure it’s nice to sell out, but the long term business they are in will suffer if their brand gets diluted. Market share in the PC GFX realm is a scorched earth battlefield for micro percents. Resellers don’t care, but the manufacturers know once purpose-built rigs start coming down in price (any second now, thanks Moore’s law) they will need to service their customers.
This is another example of real world ripples from a virtual market. I will be doing some deep research to see if any of the GFX players are sniffing around mining rigs— that will be worth jumping on.
Ma, Paw, I can Trades me some Bitcoin!
The final crypto news story is that Robinhood will be offering zero-fee cryptocurrency trade and tracking is a pretty big ripple.
Robinhood admits they’ll lose money on this business but figure the interest level is so high in crypto, they’ll make it back in exposure and retention. I agree, Very smart.
Even more exciting is an easy way for the great unwashed to get into crypto. No more buy btc->ExampleCoin->Trade->OtherCoin->BTC->USD. Now if Robinhood can deliver, you’ve got a user-friendly low-cost way to massively increase the pool of crypto investors.
If this thing takes off, and it just might, hang on to your hats, a tidal wave of cash is about to prop up the hype.
Isn’t all that stuff good?
I still call this piece ‘This is why we can’t have nice things’ because the other thread through all of these stories is the very real dangerous mix of uneducated, enthused investors, rapacious scam-artists, and no rules and regulations.
Like rail in 1880, or radio in 1920 or fighting communism in asia in 1960, there is great opportunity. There is also very real peril. Do your research, keep your wits about you, and you could end up endowing libraries, not getting airlifted from the roof of an embassy. (so to speak).
As always, Keep Calm and Crypto On.
FULL DISCLOSURE: I totally don’t own any stock in any of these companies and they aren’t clients either. So there.Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.