Since the 2008 financial crisis, central banks have turned to unconventional monetary policy in an attempt to spur global economic growth. Featuring ultra-low interest rates and unprecedented quantitative easing, trillions of dollars have been released into the financial system and near-zero interest rates have become the new normal. Today, total debt held by global central banks exceeds $18 trillion and multiple countries such as Switzerland and Japan have implemented a negative interest rate policy, charging depositors for holding funds in the central banks.
For over five years, the US Federal Reserve has maintained a target Federal Funds rate between 0.00-0.50%, exerting significant downward pressure on global interest rates and forcing investment capital into exceedingly risky markets in pursuit of yield. The Fed has quadrupled the US monetary base via debt purchases yet the velocity of money has dropped sharply. This means additional dollars flooding into the financial system are not being lent to consumers, but utilized by institutional banks to double down on risky bets in various equity, debt and derivative markets. Markets have responded well to this influx of capital aided by the global accumulation of debt by central banks. The current bull market has lasted for over seven years, with all three major US stock indices topping all-time highs in 2016. The question is how will central banks normalize monetary policy and begin to raise interest rates? As noted by prominent economists, extended periods of zero (or negative) interest rates could have adverse consequences for the global economy. In 2009, as central banks took these unprecedented steps to spur economic growth, Bitcoin was anonymously released with the aim of revolutionizing digital value transfer and restructuring the global financial system. The Bitcoin protocol introduced the idea of distributed ledgers, i.e blockchains, an innovative technology that is now being applied in various industries such as record management and distributed computing. Neha Narula's TED Talk, 'The Future of Money' does a exemplary job explaining this disruptive concept. Over the last few years, other peer-to-peer platforms have been created, building upon and tweaking the attributes of Bitcoin's underlying technology. The Ethereum Virtual Machine (EVM) was released into production, allowing for the formation of decentralized autonomous organizations (DAOs) and the development of decentralized applications (dapps). The ethereum platform aims to become the backbone of the Internet of Things (IoT) economy, which will allow inanimate objects to conduct autonomous transactions via micro-payments. Per coinmarketcap.com, less than $15 billion is currently invested in peer-to-peer platforms and supporting projects. Within this diverse industry, multiple disruptive technologies have come to market offering innovative services at significantly reduced costs. With close to $70 trillion invested on global stock exchanges, even the slightest reallocation of capital into this space will materially increase market values. Please take a moment to explore the information provided throughout this site and utilize the links as a jumping off point in your research. Feel free to contact us to discuss the purchase of distributed digital property or ask any questions you may have.
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DGD holder,
First of all, I would like to congratulate you on having the foresight and technological ability to secure an investment in Digix DAO during the hours-long crowd sale. Thanks to the successful ICO procedures facilitated by the Digix Global team, there are high levels of interest in DGD tokens leading up to the platform's launch. On April 28th, the actions of DGD token holders will begin to reflect in the overall value of the DAO. With that in mind, I ask you to consider the long-term value of the DAO when assessing profit-taking opportunities in the coming months. In the infant days of this corporate governance experiment, it will be tempting to sell large portions of your investment at 10x, 20x, and perhaps even 30x valuations, but remember these transactions will be forever known by other members of the DAO community. For the first time in the history of venture capitalism, ownership data is public knowledge and available for audit on a blockchain. Imagine organizing future ventures such as the p2p lending platforms, decentralized exchanges, or virtual nations mentioned in the most recent Progress Update. Founders could potentially devise DGD reputation systems which consider the token age of DGD in a wallet, as well as the quantity. Such a system may become necessary, as a top 50 ICO investor could dump his/her DGD tokens at a substantial gain yet hold the Proposal Badges to influence the community in the future. In other words, there may one day be additional value in holding ICO tokens over DGD tokens purchased in the secondary market. As DigixDAO builds the industry standard in digital gold platforms, the DAO community must continuously focus on productive efforts to enhance the architecture of the global DGX market and maximize daily DGX transaction volumes, all to the benefit of DGD holders. As DGX gains widespread popularity and traction, DGD tokens could one day become the most attractive asset to own in the global financial system. On April 28th, remember to keep thinking long term. By now, most individuals who follow the cryptocurrency industry have heard of ethereum. With a market capitalization that has risen over 500% in 2016, the ethereum platform is now more valuable than Ripple and Litecoin combined. So what is driving this meteoric rise in value? Is this another speculative bubble forming in a 'hot' altcoin? What sets ethereum's protocol apart from other cryptocurrencies entering the cryptofinance space? These are questions I will attempt to answer for you today. To me, two technical attributes differentiate the ethereum protocol from other cryptocurrencies in existence today. The creators of ethereum went beyond the idea of cryptocurrencies as a digital store of value and created a 'Turing complete' platform that supports smart contracts on a blockchain. I know, I know... "Turing complete smart contracts on a blockchain" sounds bleeding-edge enough to throw your money at, but what does it really mean? Well after some research, I found that in a 'Turing complete' programming language a developer can create an algorithm to solve any system of rules, states and transitions and lock those rules / conditions into the distributed, trust-less blockchain. Therefore, ethereum essentially allows the creator of a smart contract to define any environment, solve any problem, and govern any community in a completely decentralized and trust-less manner. The technological innovations available via the ethereum protocol have given rise to a new and innovative online business model coined the 'decentralized application' or Dapp for short. By paying ether to the network of ethereum miners, developers can record Turing complete smart contracts onto the ethereum blockchain. Then anyone can anonymously execute the developer's smart contract by paying the developer a small amount of ether. Complicated I know... but try to conceptualize a self-sustaining, profitable, and potentially artificially-intelligent Dapp existing in perpetuity on the ethereum blockchain. For instance, imagine the Uber of today, but running autonomously on a distributed network where rules are determined by community consensus. Instead of a room full of eggheads centrally determining the multipliers on Uber rates out of a swanky office in San Francisco, the community of users (drivers and passengers) could determine rates based on supply and demand algorithms written into ethereum smart contracts. Users are then empowered with knowledge of the rules they are playing by, and can trust that their commands will be executed without interference, not a given in today's market economy. This economic concept of the decentralized application can be applied to any industry that is realizing efficiencies through the internet today. Imagine developing a Dapp capable of independently performing a service / selling a good, governing its community of customers, and collecting payment. All of this without the possibility of ever being shut down. Crazy right? Enough conceptualizing for now. To evidence the amazing solutions already being developed on the ethereum platform, I've provided a list of my favorite use cases below for your convenience. These Dapps are all currently in development on the ethereum network. I will likely speak on these platforms in greater depth at another date... so consider this your sneak peak. The immediate launch of these disruptive decentralized applications via the ethereum protocol hints at the likely explosion of coming innovation. The more I research and learn, I truly believe that as the ethereum protocol is continually utilized to develop disruptive and autonomous Dapps, the world will begin to pay close attention to this revolutionary platform. This technology has the potential to empower entrepreneurial citizens across the globe and help society realize economic and social efficiencies never before imagined, similar to the opportunities presented by the internet in 1995.
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AuthorTyler Logsdon is a CPA and Registered Securities Representative located in Newport Beach, California. He is actively employed in the blockchain industry. Categories
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