Coinbase (tkr: COIN) prices today and company co-founder Brian Armstrong made the point that regulation and cybersecurity are two key threats to the crypto industry. We believe that the crypto industry will spearhead cybersecurity innovations that will eventually be adopted by many consumers and enterprises.
Tickers mentioned: COIN, MSFT, ORCL, PYPL, SAP, SQ, TYL
When I stumbled across cryptocurrencies in 2013 crypto investment funds were routinely hacked for tens of millions of dollars worth of crypto. Theft and debates about hard forks and the like were enough to keep crypto under the radar and out of the mainstream. Today, crypto-mania is plastered across mainstream media. Thus far I’ve yet to meet a crypto-currency with inherent value. However, the crypto industry will create real value in my view and that will manifest itself in next-generation cybersecurity / secure commercial platforms that will incorporate robust user authentication techniques with distributed ledger technology (Blockchain for example). Here’s betting that when the Federal Reserve ultimately rolls out its digital currency, it will have poached key employees from Coinbase, Square and PayPal that helped make the Fed’s digital currency dream a reality. Here’s a second bet that Government welfare programs will move off ACH protocols within the next 10-15 years and be replaced by distributed ledger technology. A third bet is that legacy software administration systems used by Government agencies (Tyler Technologies for example), will be replaced by distributed ledger technology. This last bet will unfold slowly over decades and will be a threat to legacy ERP systems such as those offered by Microsoft, Oracle, SAP and others.