Well-written articles that cover crypto OGs are valuable for their insights. In this one, Hervé Larren talks about a variety of topics: using BTC to help his mother, getting into crypto mining, his thoughts on the benefits of crypto funds, NFTs and Web3, helping luxury brands get into blockchain-based products, and more.
Like other crypto early adopters (Jesse Powell, Brian Armstrong, Winklevoss Twins, Roger Ver, Erik Voorhees, and so on), I’ve found that they have some of the best insights and predictions. You should definitely read/listen to what they are saying on a regular basis.
While newcomers can also contribute greatly to the space, a good rule of thumb is that “everything being equal, those newer to the space understand it better.”
Insightful overview. Thanks for sharing! For those less familiar with blockchain / Web3 / crypto / digital assets, would recommend reading up on some of the news and concepts that he briefly references.
Interesting to read about the early days of Bitcoin. I remember well many skeptical conversations with friends about how it would never work. If only… for the price of the beer we were sipping we could have bought dozens of BTC at that time.
As for now, it’s still not a true investment in my view. The main factor that determines price is the arbitrary sentiment of the masses. To me, BTC seems to be most useful to folks who want to park cash outside of the traditional banking system, and are willing to take a hit if necessary. There can be legitimate reasons for doing so.
As far as it being an investment, I have to respectfully disagree. If you’ve known about BTC since the early days, you know it’s basically been the best performing asset of the past decade (I first heard about BTC in 2012).
While the masses can certainly have arbitrary feelings about BTC (and numerous other cryptos or traditional assets), it’s utility is what has given it value for over a decade now (along with the laws of supply and demand).
In addition, many TradFi companies are only now just getting into BTC and the crypto ecosystem. I recently read a piece that predicted $150,000/BTC once a U.S.-based ETF gets approved. While I don’t know if the boost will be that high, it’ll definitely get some major post-approval price appreciation IMO.
Of course there are reasons for putting some of your wealth outside the TradFi system. That is one of the major points: to have a global and stateless currency (cryptocurrency). It can’t be confiscated and inflated at will. Most importantly, it’s been a pecuniary lifeline for people who live outside the U.S. and other stable regions. When the local currency goes inflationary, you need a financial escape hatch.
Crypto (BTC and others) are that way out of a hyperinflationary debt spiral for millions around the world.
A few years ago my company engaged a gentleman in Serbia who did wonderful work for us remotely. As Serbia is a European country, I naively and perhaps a bit arrogantly assumed that paying him would be fast and easy, as with any other European country. However it turned out that the process was almost impossible bank to bank. I think we ended up enrolling a company account into Paypal or something.
I hadn’t considered the benefits of BTC to those who live in nations where currencies can be volatile, and banking unreliable. It makes sense that BTC would be truly useful in real life, for real daily transactions, in a way that isn’t completely necessary elsewhere.
One can imagine that it is a less volatile way to store value, get money to relatives across borders, pay for things like cell service, work online providing freelance services, bypassing currency controls, avoiding confiscation and “haircuts”.
Good points, @MarkOlsen. It’s funny how we often assume that transferring money between European countries should be a breeze, but reality can be quite different. I found similar experiences state-to-state in the USA as well – the U.S. banking system is rather balkanized as well in many cases. Separate regulations and separate rails on a state by state basis.
Also it is worth noting how many people work in other countries in order to support their families back home where economic opportunities are limited. Traditional bank fees in those situations can be an enormous burden. Imagine spending $70 in fees to send money back home, where the average daily wage might be something like $10. This is one area where crypto really does change lives.
Net-net, I agree. This is a huge use case – especially when the currency that would otherwise be sent back home is in many cases undergoing hyperinflation.
That said, some concerns that I think are not yet fully resolved in the area of blockchain and crypto based remittances:
Complexity : Cryptocurrencies can be complex to use for those who are not familiar with the technology. Managing private keys, wallets, and understanding the transaction process can be intimidating for some users. This complexity can lead to user errors and the potential loss of funds.
Irreversible Transactions : Cryptocurrency transactions are typically irreversible. If a sender makes a mistake, such as sending funds to the wrong address, it can be challenging or impossible to recover the funds. This is especially a challenge in retail transactions with individuals who in some cases might not be very technology or financially literate.
Regulatory Hurdles : Some countries have introduced strict regulations or outright bans on cryptocurrencies. This can make it difficult or illegal to send and receive cryptocurrencies for remittances in certain regions.
We are still relatively early days – I look forward to seeing these and other challenges increasingly addressed and resolved.
Good points, for freelancer payments, you may also want to consider USD- or EUR-pegged stablecoins that may be more to the freelancer’s liking. Further, depending on the amount, you may also want to consider using a crypto with lower transaction costs (BCH, XMR, etc…).
When I lived in Korea, I had friends and colleagues send money back to the USA via Bitcoin because it was faster, cheaper, and simpler than using the TradFi payment options…