Real Estate Investor Magazine South Africa April 2018 - 100th Issue! | Page 62

ALTERNATIVE
The Wild Crypto Ride
Just another bubble waiting to burst, or a truly
free market?
BY RUSSELL BENNETT
J
udging solely by the bearish trend lines of cryptocurrency
price graphs over the last few weeks, you might have al-
ready written Bitcoin and its ilk off as potentially lucrative
investment options for 2018. If, on the other hand, you’re in
the bulls camp on crypto as an asset class, you may well be rub-
bing your hands in glee and snapping up all the cheaply-priced
crypto moving around at the moment.
Whatever the case, there’s little denying that cryptocurren-
cies, and the blockchain distributed ledger technology which
is their foundation, have made an impact on the global tra-
ditional financial markets. And, therefore, achieved what the
original cryptocurrency, Bitcoin, set out to achieve over ten
years ago:Disrupting existing financial systems.
Still, this achievement doesn’t count much to investors,
some of whom have made a substantial amount in this fledg-
ling market, and some of whom lost their shirts by buying too
high and then selling too low. Or through scams, of which
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there are no shortage in this Frontier-style market.
With governments across the globe coming down hard on
this potentially explosive asset class, and a raft of institution-
alised investors with serious profiles pouring scorn over the
space, the future of crypto can look unappealing at best. Sever-
al times we have heard influential fund managers, ministers of
finance, investment gurus and representatives of “old money”
exclaiming with some degrees of joy that “Crypto is dead.”
And yet, it isn’t.
Those who call for an unbundling of the underlying tech-
nology, the blockchain, from the supposed “evils” of crypto-
currency, freeing business up to take advantage of this revolu-
tionary tech without burdening their financial managers with
crypto concern, have missed the fundamentals.
What is blockchain?
The blockchain is a tamper proof, cloud-based multi-node dis-