Meet the Blockchain and Bitcoin Billionaires below. But first, a little background.
Remember how a few short years ago energy companies were the most valuable in the world, and then the top tech companies took over the list.
In a few short years Blockchain and crypotcurrency winners will be some of the largest if not the largest companies in tech, giving rise to “Blockchain Billionaires” as well as “Bitcoin, Ethereum, Ripple and/or other cypotocurrency Billionaires”.
Disruptive technologies have always fostered disruptive wealth. Ford. Rockefeller. Bezos. And this disruption in wealth creation is happening faster than ever. Instagram sold for $1 billion two years into its existence. Uber - less than ten years old — is already valued at or close to $70 billion dollars.
In a world of accelerating returns, where the pace of change is itself increasing — and in an exponential fashion — the time period required to amass great wealth is shrinking rapidly. Just as adoption periods have shrunk from decades or generations to months or a few years — the richest among us are gaining their wealth much more quickly and in greater quantities.
As a result it may be that in 15 years that the “Blockchain billionaires” will in fact be “Blockchain Trillionaires”. Remember, people famously overestimate the amount of change in the short term but underestimate the amount of change in the long term.
So, we’re playing a much bigger game all of the time.
We will see that “Blockchain Billionaires” will eventually be more widespread — and wealthier — than “Bitcoin Billionaires” but the currencies have been along longer and thus have the current advantage, so we will look at them first.
Money is FLOODING into the cryptocurrency market. As I write this it is entering at the rate of a few billion dollars increase per day — which is staggering for a barely $70 billion market. Bitcoin has been the best return of investment for the last several years (except for one year) of any significant investment, but it only now has the type of market cap in which it is becoming more well known to the general public. Bitcoin’s 47.9% of the entire cryptocurrency market has plunged from the 80%+ figure of just months ago, and 90%+ before that.
Bitcoin is a disruptive technology and in a mature market that would have made it enough to be the 800 pound gorilla that others could not catch. But already Ethereum, which in price is up well over a factor of 10 in the last year and Ripple, which has recently passed Ethereum to be the number two cryptocurrency in market cap, each appears to have long term advantages over Bitcoin and are already rapidly gaining ground on Bitcoin, although Bitcoin continues to maintain a fairly significant (but quickly diminishing) lead based upon its earlier release and first to market advantages. Ethereum is the first major blockchain platform— although other emerging blockchain platforms such as Omni, Nxt, Counterpart, Bitshares, Burst and Waves also exist. Ethererum has many leading financial powerhouses backing it in an Enthereum consortium and Ripple is supported by major financial institutions as well. At the rate they are going, it is possible, if the present trend continues. that one or both of them could actually surpass Bitcoin in market value in weeks, if not months.
For example — of the top eight cryptocurrencies, four of them (and Bitcoin is not one of them) have increased their market share by over 40% each in just the last week!
The top three cryptocurrencies by market share, Bitcoin, Ripple and Ethereum have the lion’s share of the total market, over $60 billion currently, but there is an extremely long tail. Twenty cryptocurrencies have a market value of over $100 million each. The top 60 cryptocurrencies each have a market value of over $10 million, and a staggering 168 cryptocurrencies are worth over a million dollars each!
Who are the Bitcoin Billionaires?
The Bitcoin Billionaires will be both individual currency holders and the individuals investing in the winning companies in this space.
First we’ll look at what it means to be an individual holding large Bitcoin or other leading cryptocurrency balances, and then look at some of the major companies in this space.
Some people are talking about Bitcoin $10,000 already. I do not know whether Bitcoin will emerge as the leading cryptocurrency long term or whether it will be replaced by one or more other cryptocurrencies developing a leadership position. While Bitcoin has a market cap of approaching $34 billion at this time the overall cryptocurrency market is over $71 billion currently. I believe that in ten years time that the cryptocurrency market will be between $1 trillion and $3 trillion, and that the largest player could have 50% or more of that market (most huge technology markets tend to have one dominant winner, Amazon in Ecommerce, Google in search, Facebook in social media etc.).
World GDP is estimated to be approaching $75 trillion dollars. In ten years time it is possible that cryptocurrencies could have eliminated national currencies (or more likely nations would have adopted their own cryptocurrencies or tried — perhaps successfully or perhaps not — to ban and outlaw cryptocurrencies). Say that collectively the world averages 2% — 3% growth over the next decade, then this $1 trillion to $3 trillion estimate — which many today may think is impossible — will in fact be a conservative estimate. If cryptocurrencies are truly disruptive, the actual number can be a factor many times beyond the $1 trillion to $3 trillion estimate. Think about this: A generation ago we lived in a cash society for the most part. Now, a generation later, cash is not that widely used although of course it is still present. If cryptocurrencies turn out to be more efficient than our current payment systems and solve more of the pain points, the adoption rate will become accelerated.
Individuals who have stockpiled the dominant cryptocurrency(ies) will — if cryptocurrencies dominate — be billionaires.
Which are the dominant companies? It’s way to early to tell going forward long term, but here are just a few of the potential leaders today.
Coinbase — “Coinbase is a digital currency wallet service that allows traders to buy and sell bitcoin.” CEO — Brian Armstrong
Coinbase has already received over $117 million in investment!! If coinbase wins big, major investment winners in addition to the five seed and nine Series A investors will be Union Square Ventures, Andreessen Horowitz, DFJ and others.
Bitpay — “ BitPay is a payment processor for the peer-to-peer digital currency, Bitcoin” — CEO — Stephan Pair
Bitpay has over $30 million in investment. Winners could include eight seed investors (including Ashton Kutcher, DCG/Barry Silbert, Roger Ver and Matt Mullenwag), Founders Fund and Index Ventures.
There will be many many times the number of “Blockchain Billionaires” than “Bitcoin or other cryptocurrency Billionaires”, as Blockchain is much more disruptive. Blockchain companies are so new that it impossible to say for sure how things will shake out. Getting into the value proposition of blockchain technologies in depth is beyond the scope of this article, but the topic is required reading for anyone wanting to understand disruption in the next 20 years (along with VR and IOT, etc.).
Most simply, blockchain smart contracts can potentially replace more efficiently any business based upon contracts or record keeping. And oh yeah, it can also potentially replace all marketplaces. Proponents of blockchain say you don’t need Uber as a standalone company. Uber’s functions could be handled by the blockchain.
If you really want to make the big bucks, you’ll also need to understand also how blockchains will utilize the monetization of artificial intelligence.
And how blockchains utilize and leverage decentralized networks.
If you thought software was eating the world (and it has) you’re just getting started. Because every industry can or should be disrupted by decentralized networks, blockchain is a disruptive force on the scale that we have not seen before. If you thought that the Internet was disruptive (and it is!) wait until the Internet itself is disrupted by decentralization.
Blockchain companies have begun raising huge sums of money (millions of dollars in minutes) through ICO’s. How this and/or other fundraising will impact VC’s and other investors remains to be seen. Some forward thinking investors have already started their own funds to be able to invest in tokens — crypotcurrencies and/or blockchain tokens.
But here’s the thing. While it was harder to commercialize open source software (Red Hat etc. notwithstanding) this shouldn’t be the case with blockchain companies. These companies (you may call them applications but true companies will emerge) will scale to be huge. Fortunes will be made.
Although the company Blockchain has raised $30 million from investors, its too soon really to say who those companies will be.
Most of the largest blockchain tokens have been just extremely recently introduced. Already, the top eight of them already have market caps of between $118 million and $209 million EACH.
And seven of the top nine tokens (Note: talking about assets, not currencies, by market cap on Coinmarketcap.com) are built on the Ethereum platform.
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