(This blog is an extended version of the article that appeared in The Guardian’s Savings and Investment section on 22 January 2020)
Bitcoin is one of today's most sorely misunderstood investment opportunities. While Bitcoin is commonly touted as a speculative asset, it’s monetary token is perhaps the least exciting aspect of the technology. Far more promising is its potential to serve as infrastructure for the Fourth Industrial Revolution: the Data-driven economy.
Think about the Internet and the Dot-com boom of the '90s for a moment. Investing in online communication and shopping companies was promoted as the opportunity of the century until the bubble burst and initial winners like Pets.com, Webvan, Boo.com, Worldcom, NorthPoint Communications and Global Crossing failed and shut down.
The Dot-com crash brought many an investor to their knees. And yet, the Internet itself shot root throughout our human experiences. Today, most of us rely on Internet communications to operate our businesses. Many of us have founded enterprises on the Internet Protocol and its applications. It wouldn't be too far fetched to say that much of the past three decades' global economic development is thanks to the Internet's existence. And that's to mention its economic impact alone.
Bitcoin and blockchain technology must be understood in a similar light.
"Data is the currency of this planet." Michael Hudson, Bitstocks CEO-Founder
We are facing the advent of the Fourth Industrial Revolution. The first used water and steam to mechanise production. The second utilised electricity to fuel mass production. The third applied electronics and information technology to automate production. When it comes to the next industrial revolution, data-transmission and applications will be at the very heart of it.
Along with this Data-driven economy, a Virtual Reality (VR) universe is knocking at the door. Sooner or later, we will get to the stage where we can interact with computers with access to all of the data that humans have emitted throughout the entire history of humanity. Everything humanity has ever produced will be on the record, available for us to interact with.
While humanity is steadily developing the technology to enable such a reality, the ethical framework to protect the individual's rights - data ownership and data privacy - are sorely neglected.
Right now, the data we emit become the property of dubious organisations (e.g. Cambridge Analytica data leaks and political manipulation scandal). And when we record data intentionally, there's no way to ensure its integrity (E.g. Novartis data manipulation scandal).
As soon as we move towards a VR system where we immerse ourselves in this data-based environment we've created, we will have lost our sovereignty. In an immersive world, Google wouldn't only be monitoring everything you're doing on your mobile device and manipulating the media accordingly. No, even the data derived from the cameras and health sensors in your home will become the profit centre of some organisation. Once we've given away the various data streams relating to our daily lives, we will have become data slaves.
"With Bitcoin, we can build on a data infrastructure that's much more powerful than Google or Facebook's, and without the gatekeepers that collect our data to weaponise it." Michael Hudson, Bitstocks CEO-Founder
While the obscurity of the inner workings of our current system has led to the weaponisation of our personal information, the one-way flow also prevents humanity from benefiting from our most valuable creation: our data.
And it is within this context where the immense value proposition of the Bitcoin blockchain as infrastructure for immutable and transparent data-transmission becomes clear.
The Bitcoin blockchain solves both the problems of data ownership and data integrity, making it the ideal infrastructure for a data-based economy that secures the sovereignty of humanity.
Because of its immutability and transparency, Bitcoin has the potential to transform the data-driven applications we interact with daily, from EDI (Electronic data interchange), data storage, banking, Social Media and many more. The Internet itself will be transformed into a system with built-in security and data ownership.
Given Bitcoin's indispensable role in the Fourth Industrial Revolution, an obsession with its short-term price feed is missing the point entirely.
When it comes to investing in nascent technology, the unknown factors, and therefore the risk is considerable, but so are the rewards.
The first step to identifying and grasping Bitcoin and blockchain investment opportunities should, therefore, be to educate yourself thoroughly about the nature and implications of the technology.
Bitstocks was established in 2014 as the City of London's first Bitcoin Market Advisory and Cryptocurrency Investment firm. While we served as an investment house for retail bitcoin investors, our core purpose and focus was always, first and foremost, to be an education house. To provide clear and unrivalled education in the space; to demystify the complex nature of blockchain technology and offer insight into the financial and philosophical value held within its blueprint.
At Bitstocks, the educational material we offer includes online content as well as immersive experiences. Our Bitcoin SV Banking Ecosystem, Bitstocks' Gravity gives you the opportunity to experience Bitcoin's implementations for yourself, and the Beta programme is now open to all UK residents. Head over here to sign up, and we will send you an invitation before the public launch.
Given the somewhat dramatic changes in our understanding of what Bitcoin is over the past 5 years, we are rewriting our earlier eBook on the topic.