I can’t tell you how thrilled I was to hear from my friend Frank Holmes.
For those of you who don’t know him, Frank has won numerous awards and accolades as the CEO and Chief Investment Officer at U.S. Global Investors, Inc. (Nasdaq:GROW).
It’s a boutique investment management firm specializing in actively managed equity and bond strategies. Frank and his company also are some of the savviest folks in the world when it comes to metals and mining.
That’s the reason I started following his career in the first place. Fact is, I have been involved with strategic metals and minerals most of my adult life.
Turns out, Frank and I have one more thing in common. Both of us are big believers in the disruptive power of blockchain technology. Indeed, Frank and his associates recently interviewed me for a profile that I republished, and which you can access here.
In particular, Frank’s editors wanted to get my take on where the blockchain is headed.
It’s not much of a surprise, really, as many folks we chat with here also have questions of their own about what blockchain technology is, and what it represents in terms of its profit potential.
That’s why today I’m going to fill you in on what Frank and I discussed in the interview.
And I’ll go further and explain what I see as the big opportunities that lie ahead with blockchain tech…
A Fateful Meeting
I had the good fortune to meet Frank in late October at Money Map Press’ Black Diamond Conference. We started by appearing together on stage for a round table talk.
After that appearance, I made sure to attend both of his investor presentations. They were great, but I particularly enjoyed his talk about cryptocurrencies and the blockchain.
Frank later attended my presentation on cannabis investing, in which I also talked about my track record of being one of the first analysts in the nation to suggest folks buy Bitcoin back in the summer of 2013. At the time, Bitcoin was trading at about $90; it topped out last year at $19,700.
So, I can’t tell you how flattered I am that Frank wanted to hear more of my thoughts on blockchain technology. Of course, there is no way we could cover it all in that conversation.
More to the point, over the last few weeks, I have gotten many questions about this topic. People just have a hard time getting their minds around it.
I understand why, and I’ll try to clear up some of the confusion in today’s chat. But first, I want you to know what’s at stake here.
Gartner says blockchain technology created $4 billion in business value in 2017. The firm believes the figure will hit $21 billion by 2020, before rising to $176 billion in 2025, and onto a staggering $3.1 trillion by 2030.
Unfortunately, despite all the money up for grabs here, the average investor finds blockchain technology hard to understand. So today, I’ll do my best to simplify it.
What’s the ‘Blockchain’?
Let’s start by stating that there is no such thing as “the blockchain.” In reality, there are lots of these in existence today. Some are private – think enterprise blockchains among a consortium of firms in the supply chain business – some are public, like Bitcoin (BTC) and Ethereum (ETH), and some are hybrid systems. Many are tied to specific crypto currencies, again, like Bitcoin and Ethereum.
Another point of confusion is blockchain’s affiliation with Bitcoin. While it’s true to say that we would not have Bitcoin without that underlying technology, there is so much more to it that any single form of digital money.
See, what we have here is a massive distributed ledger system that serves as a permanent digital record of all transactions linked cryptographically on a “chain.” Literally, that means that when two or more parties enter into a contract, every single aspect of that agreement is stored on a blockchain forever.
If Bank A and Bank B reach a deal, and put the smart contract on the blockchain, they cannot alter it. To make changes, they would have to enter a new agreement that would then be blockchain-based.
Using the example above, let’s walk through how the process works. Bank A sends money to Bank B. That transaction is shown online within a block in the ledger’s chain.
In turn, that block, which contains records of other transactions, is broadcast to every party on the network. Once experts or miners monitoring the system validate the transaction, that block is added to the chain, where everyone on the system can now view it. Bank B gets the money.
A “Frictionless” Tech
This is the type of technology that economist like to call “frictionless.” It can be faster, safer, and cheaper than current processes. In the near future, we’ll be able to use blockchain tech to cut legal and banking fees down to pennies on the dollar.
Information held on a blockchain exists as a shared – and continually updated – database. The distributed nature of data that’s constantly verified on the blockchain means that it isn’t stored in any single location, and thus is prohibitively difficult to alter or manipulate. That makes it more or less tamper proof.
And it also means there is no centralized version of this information, so hackers can’t corrupt it. Even better, it can be tweaked to work in virtually any sector you might imagine – I’m talking cars and energy, banking and finance, defense and aerospace, pharmaceuticals and medical devices… just to name a few.
What’s Under the Hood
Now then, another reason the blockchain seems so abstract is because all of the action occurs out of sight of the public.
But look at it this way, there are thousands of websites out there that require something on the order of several billion pages of arcane computer code to function properly.
Do you really need to see and audit all of that underlying code for yourself in order to take advantage of what that website has to offer?
I’d propose what really matters is that, using our various devices, we can set up or view a webpage, send or receive the information we need from it, and buy or sell the products we use everyday.
Now, let’s say your web purchase was recorded on a public blockchain. The seller would be guaranteed that you can’t call your credit card company and say you didn’t authorize the purchase.
Similarly, you would have what amounts to a permanent receipt of exactly what you ordered in fine detail. The blockchain you use would post the results very soon after the deal went through.
As the blockchain matures and impacts dozens of industries, something similar will occur for transactions across the board. If a farmer sells corn to a distributor, that data surrounding the transaction could be stored on a blockchain, while the parties to the deal wouldn’t need reams of paper to verify it all.
No wonder so many big companies like Amazon.com Inc. (Nasdaq:AMZN), Ford Motor Co. (NYSE:F) and Microsoft Corp. (Nasdaq:MSFT) are all investing in this field. They see it as a way to increase security while lowering back office costs.
Now then, I’m often asked what is my favorite blockchain. Without a doubt, it is the one supporting the crypto currency Ethereum. That’s because Ethereum was developed as a way to expand on the progress of Bitcoin by supporting decentralized applications – known as dapps – and as a platform for smart contracts.
I have much more to say about this – and the ability of cryptocurrenices to make you big money- than I can possibly explore here.
So, I’ve prepared a special presentation on it that you can access by simply clicking here.
Also, be sure to check back here soon to see what industries I believe are well suited to join the blockchain revolution.
Now, when we’re talking about using new technology to disrupt major industries, there’s another sector – and profit play – that’s ripe to impact Big Pharma.
I’m talking about a microscopic device that conducts a feat of bio-molecular mastery that’s almost magical, though it actually works on a cellular level and could completely erase disease from the human body…
The best part is – the tiny firm behind this breakthrough. Though, I don’t expect this company will stay small for long.
Before everyone finds out about it, click here to learn more.
See you back here soon.