David Drake, Founder and Chairman at LDJ Capital, a $200 million cryptocurrency fund, recently put a bold stake in the ground when he went on Bloomberg to declare Bitcoin may be valued at $30k by the end of 2018. Drake’s commentary was picked up by just about every crypto trade publication with other industry leaders adding their two cents.
Over the last seven years, Drake has steadily made a name for himself as a leader in cryptocurrency. He saw the value of digital assets back in 2011 when other investors were still avoiding it. About six years later, a lot of others had faith in the market too. 2017 was the year cryptocurrency went mainstream, more institutional investors got in on the market and we saw Bitcoin close out the year with its highest valuation yet.
Since then, we’ve seen a roller coaster of sharp falls, followed by steady growth and so on. “We see organizations of people using strategies that are forbidden in traditional trading environments, including pumping up certain cryptocurrencies and then dumping them. These types of Black-Box trading strategies manipulate the market and cause a large part of the volatility we are seeing at this stage,” says Drake.
In response, there has been a lot of talk about what needs to be done in order to improve the cryptocurrency ecosystem. “There needs to be regulation, self regulation and SEC guidance, plain and simple,” adds Drake. However, this is something many coin offerings have been hesitant of given the digital asset’s somewhat nefarious beginnings. The anonymity and decentralization of cryptocurrency markets will be lost once governments and regulatory agencies get involved, but this is necessary according to Drake. “We need to work collaboratively in order for the market to reach its full potential,”he says.
When asked what the market will look like ten years from now, Drakes confidence never wavers. “It will be 85 times bigger and we will see complete fluidity between the market, Wall Street and financial institutions.”
Despite the ups and downs of the current market, the likes of Bitcoin, Ethereum and Ripple have, for the most part, been the top three cryptocurrencies in the market. Drake believes we may see that disrupted. “Despite all of the media buzz and widespread consumer interest, this market is still in its infancy. There is definitely potential for existing and new coin offerings to shake things up. Bitcoin Cash, EOS, Cardano and Litecoin have been gaining ground in their own right. “I could see EOS surpassing Ethereum’s position by year-end,” says Drake. “Admittedly, it is all speculation without knowing what other coin offerings may enter the market. Anything is possible.”
Regardless of those possibilities, watching the cryptocurrency market evolution is sure to be interesting.
Tina Mulqueen is the CEO of Kindred PR. She consults with reputable ICOs on marketing and public relations strategy, helping clients to secure more than $10M in funding. She was named one of the top young communications professionals by INC Magazine, and her campaigns have been featured in Adweek, Entrepreneur, INC and Forbes, in addition to multiple other niche and television outlets. She's an advocate for women in technology, and often speaks about the intersection of technology and retail marketing. She writes regularly for Forbes, and has written for Huffington Post, Today, Thrive Global, Elite Daily, New York Lifestyles Magazine, and more.
One of China’s most prominent Bitcoin investors has announced his retirement from the crypto world. Billionaire Li Xiaolai is the founder of BitFund, a crypto venture capital firm that has fostered a slew of Bitcoin-related startups.
Li’s announcement of his decision to withdraw from cryptospace—and investing otherwise—came unexpectedly via his page on Chinese social media site Weibo.
“From this day on,” his post reads, according to TechNode’s translation, “I, Li Xiaolai, will personally not invest in any projects (whether it is blockchain or early stage). So, if you see ‘Li Xiaolai’ associated with any project (I have been associated with countless projects without my knowledge, 99% is not an exaggeration), just ignore it.”
Li is a former school teacher, and claims to be the first person in China to openly trade Bitcoins, rather than hiding behind its famous anonymity. Now, retired from both teaching and investing, he says he’s not sure where to go next. “I plan to spend several years to contemplate on my career change. As for what I’m doing next, I’m not sure just yet.”
Li closed his post by expressing that he still maintains a long term optimism about the blockchain.
Li’s Ventures Grew Crypto Capital, Controversey
Through BitFund, Li has incubated a number of blockchain related startups, including an off-chain wallet called Bitfoo, the crypto exchange YUNBI, and HashRatio, a miner manufacturing company. Li organized 2014’s Global Bitcoin Summit in Beijing, back when you could get a BTC for as little as $440, and years before China instated its full ban on cryptocurrencies.
Earlier this year, Li also acted as managing partner of Hangzhou Xiong’An Blockchain Fund, a billion dollar fund backed by the Hangzhou government. Li stepped down after fellow venture capitalist Chen Weizing introduced a series of accusations against him.
Included in the eleven accusations, which Chen broke on social media and messaging platform WeChat, were a supposed debt of 30,000 BTC that Chen says Li failed to pay on time. Li published a point-by-point response to Chen’s accusations, addressing the 30,000 BTC debt by saying “it’s not true… Chen is just muddying the water.”
Though Li called them “defamations,” and Chen did not offer supporting evidence for his allegations, Li said Chen’s antics “brought material and negative impacts on the reputation of Xiong’An Blockchain Fund” and that his resignation would “let the Hangzhou government continue its push for blockchain development.”
Li was the subject of controversy on another occasion when, in a candid conversation he did not know was being recorded, he outed several influential organizations as scams and said that the best way to succeed in blockchain, even if your project is worthless, is to get famous and build consensus.
The State of Crypto in the People’s Republic
All crypto and blockchain related websites are blocked by the Chinese government, and citizens are forbidden from engaging in crypto transactions. The People’s Bank of China released a statement on August 24th warning against ICOs, which they consider to be “illegal fundraising, pyramid schemes, and fraud.”
But the rules have been difficult to enforce, and crypto still enjoys an active user base in China. Beijing Sci-Tech Report, China’s oldest technology publication, is now the first Chinese publication to accept BTC as payment from its subscribers. Chinese crypto channel cnLedger announced in a tweet on September 25th that Ethereum Hotel, China’s first hotel to accept ETH as payment, is open for business in Sichuan Province.
A Crypto Landscape Without a Leader
The sudden exit of Li Xiaolai from the Chinese crypto scene could have caveats, or greater implications. Weibo users expressed their support and gratitude following his announcement, but some also speculated that his choice of words leaves room for Li to continue investing in crypto indirectly, perhaps through funds or corporate entities. Whether that will be the case or not, for many, his resignation marks the loss of a public blockchain leader.
The earliest Macintosh PowerBook was chunky and dark gray. It featured a built in trackball, where the touchpad is on today’s Macbook, and little rotating peg legs to elevate the keyboard at an ergonomic tilt. The screen was black and white. You could open it on your desk at school, and tuck it into its special carrying case to sling it over your shoulder when Mom came to pick you up.
Going to school with Steve Wozniak’s kids in Los Gatos, California, meant having special access to cutting edge technology, like the Macintosh PowerBook in 1992. Along with five other students from our small school in the Santa Cruz mountains, I went to after school classes at Woz’s office to learn about Apple computers and emerging technology.
The first day, Woz taught us to dismantle and reassemble a desktop Macintosh, showing us all the pieces and what they did, with diagrams on the whiteboard. We learned the difference between random access memory (RAM) and the storage space on a hard disk, between a hard disk and a floppy disk. We learned how to navigate the innovative GUI that used windows (while PCs were still using DOS) to access the Apple utilities and adjust the settings for peak performance.
A great advocate for the intelligence and capacity of children, Woz challenged us with sophisticated knowledge and trusted us with expensive equipment, eager to see what creative uses we would put them to. He showed us the first version of Adobe Photoshop, a new technology that shook the public into doubting the integrity of photographs. Along with it, we had early model digital cameras called Canon XapShots, which used tiny floppy disks to store around 50 pictures at a time. The day he brought in America Online version 1.0, we were ecstatic that we could chat with each other from different rooms.
Woz was childlike himself, especially in his enthusiasm for developing technology. When laser pens were new, you could always find one clipped to the collar of his Hard Rock Cafe tshirt. He seemed to like them more for playing tricks on people than for any practical purpose.
Early Techs Championed by Woz Became Familiar Names
Most of the technologies Woz championed have evolved. Some went big. As dial up AOL gave way to internet browsers like Netscape, I remember sitting in our middle school’s Wozniak Library Media Center learning how to use a world wide web page called Yahoo!, the novelty of which I put to work looking up David Letterman’s recent Top 10 lists.
America Online set the original chatroom model, complete with primitive emojis. It grew so big that in 2000, the year we kids were graduating high school, it bought Time Warner for $165 billion and became AOL Time Warner, then the world’s biggest media conglomerate. Now, estranged from Time and Warner after a decade and a half of new mergers, AOL is part of the Verizon subsidiary Oath, which also owns Yahoo! and, believe it or not, Netscape, which is still around.
The success of Photoshop, of course, positioned Adobe to set industry standards, now untouchable as king of the Silicon Valley’s creativeware. Macintosh PowerBooks evolved into Macbooks. Digital photography sure became a thing. And there are exceptions, too. Those laser pens, well, occasionally you still see someone using one to disrupt their cat.
Woz on Bitcoin
Wozniak hasn’t taken his finger off the pulse of emerging tech. Still full of wonder for the promise and possibility of technological advances, he’s been outward about his enthusiasm for Bitcoin, calling it “pure digital gold,” and placing his faith ardently in its mathematical integrity.
“I believe so strongly in mathematics and purity and science as defining the world,” he told CNBC in June.
“Bitcoin is mathematically defined. There’s a certain quantity of Bitcoin,” he said, “and it’s pure. There’s no human running it. There’s no company running it, and it’s just going and going, and growing and growing, and surviving! That, to me, says something that is about—something that is natural. And nature is more important than all our human conventions.”
His journey with Bitcoin is well documented. He tried to buy some around $70, ended up not getting any until they hit $700. Then he lost a few to fraud, and when prices soared “way up in the sky,” he said he “got scared, and sold everything but one Bitcoin.”
Woz stresses that he isn’t an investor. Still a man who loves laughter, he puts a premium on happiness, not wealth, and only holds his single Bitcoin for the sake of experimentation. “Part of my happiness is not to have worries, so I sold it all — just got rid of it — except just enough to still experiment with,” he told CNBC last year.
He said he agrees with Twitter founder and Square CEO Jack Dorsey, that Bitcoin could be the first global currency. At New York’s Consensus, a blockchain conference last May, Dorsey said “the internet is going to have a native currency so let’s not wait for it to happen, let’s help it happen… I don’t know if it will be Bitcoin but I hope it will be.”
Woz responded: “I buy into what Jack Dorsey says, not that I necessarily believe it’s going to happen, but because I want it to be that way.”
By contrast, Woz has called federal fiat currency “kind of phony.”
…And on Blockchain
But Bitcoin isn’t blockchain. It’s just the first and most well known use of blockchain technology. Last month at New York’s NEX technology conference, Woz called blockchain a bubble, similar to the dotcom hype bubble of the early aughts. “It was a bubble, and I feel that way about blockchain,” he said on stage.
“Blockchain in all forms is so popular and being studied by so many people,” he previously said in June’s CNBC interview. “It may be long term. I do see it, as you said, as a bubble… There’s a huge amount of interest in it right now, but things aren’t going to change that rapidly. That’s what the internet bubble was about.”
When asked how long he expects it to take for blockchain to gain widespread traction, he referred to the lag between the dotcom bubble and today, when we’ve finally realized many of the dotcom era dreams: “I’m going to give it 10-15 years.”
Part of the reason for this is human adjustment to new technology. “People have to have their mindset change,” he said. “Culture and tradition, and status quo and the way things are doesn’t change that rapidly, instantly, when it’s that huge.”
His faith in blockchain appears to be mixed. But in a seeming contradiction, Woz has suggested Ethereum could be the next Apple. “Ethereum interests me because it can do things and because it’s a platform,” he said at a May tech conference in Vienna.
Woz’s view of Bitcoin as solid gold but blockchain as a bubble is the inverse of that held by Jack Ma, chairman of China’s Alibaba and its fintech affiliate Ant Financial. Last month Ma said that the “technology itself isn’t the bubble, but Bitcoin likely is.”
Bubble or No, the Future Still Seems to be Blockchain
Which way is it? Is Bitcoin the bubble while blockchain is solid, as Jack Ma says, or the other way around, as Woz indicates?
Woz’s hope for Bitcoin as the pure-form currency of the future could prove misplaced if demand for it suddenly falls off. Blockchain, meanwhile, has myriad potential uses in finance, logistics, travel, even the art world. Developers and entrepreneurs are testing the mettle of this new technology with fervor and abandon. If we’ve learned from the dotcom bubble not to bet all our chips on untested technology, we can watch it develop steadily, as the internet did around the turn of the century. And even if the hype around blockchain is a bubble, Woz is probably right about the technology’s ultimate staying power.
To say the least, he’s seen a lot of technologies come and go. Sometimes, like the novelty laser pens of the late 1990s, new tech is just a fun experiment. But Woz’s enthusiasm for Bitcoin and measured interest in blockchain platforms like Ethereum is an indicator. A mathematically pure ledger system that governs transactions with transparency and automation holds emergent promise for the childlike optimist in any of us, much the way the Macintosh PowerBook did in 1992.