Quick Snippet - 07 May - Crypto Investing

This is a brief view of some important discussions that are happening around investments and cryptocurrencies.

AVC - Fred Wilson

Fred Wilson is a smart and successful investor. If you are not already familiar with his work, well you already are but just didn't realize it. Fred has been blogging for what seems like forever, and is one of the most rigorously consistent posters you will ever come across. He also has a knack for building community, as that is what the comments section of his blog is.

The avc.com blog has been a regular part of my daily reading for years, and blockchain technologies have received a lot of thoughtful discussion in that forum. Being one of the early investors behind coinbase and protocol labs, and other stuff like Twitter and Etsy and Kickstarter, Fred has a lot of insight into both the financial as well as the strategic workings of blockchains and their relationship to the internet as a whole.

The thing I read this weekend which I thought was worth mentioning here is something of a response to Warren Buffet saying that crypto investing doesn't make a lot of sense, except as some interesting form of gambling, which isn't really investing. Now, obviously, Fred has a dog in this fight and a vested interest. In this case, however, the points which he makes seem to be coming from a perspective which is very well informed and a valid critique of the fairly limited analysis which seems to be coming from arguably the smartest guy in the investment world.

The mindset which Fred challenges is Buffet's statement that buying cryptocurrency is purchasing an asset that hasn't really produced anything. From the standpoint of the investments that have been made in blockchains, from a strategic and technological point of view, this may be a mistaken angle. The very real, and very important thing which has been created by blockchain creation is a massive decentralized infrastructure which operates at a global scale. This decentralized infrastructure has the potential to completely shape the internet and define commerce in fundamentally important ways. Fred does hedge the critique a bit, speculating that Buffet may just be saying they don't have a good valuation model, and agreeing with Buffet if that is indeed the intent.

Don't take my word for this, if you are at all interested in the questions at hand, I highly recommend visiting AVC and exploring Fred's thinking about it for yourself.

https://avc.com/2018/05/is-buying-crypto-assets-investing/

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