Welcome to the launch of Moneyweb Crypto, a new platform that will run alongside Moneyweb and provide commentary, insights and news on all things cryptocurrency and blockchain-related.
We’ve been debating whether we should go where angels fear to tread for some time within Moneyweb.
It became clear that a sizeable percentage of Moneyweb readers have at some point invested in bitcoin, and many of those who haven’t ask us whether it’s safe (there’s no quick answer to that other than to point out that cryptos are extremely volatile and there is potential for loss, just as there is potential for gain).
Readers also ask us to offer opinions on whether they should get involved in an unbelievably promising get-rich scheme built around bitcoin.
Let’s dispense with that up front: we’re suspicious of anything that relies on multi-level marketing to attract clients, and unless you control your own bitcoin in your own or a trusted wallet, we advise against it.
So we decided to take the plunge with Moneyweb Crypto. There is too much happening in this space to ignore.
Our initial focus will be on education on the risks and benefits, and an exploration of who’s doing what in the world of cryptos and blockchain in SA and abroad.
Like it or not, the world of investment is changing. You can purchase digital gold (fully gold-backed); there are crypto payment systems already in place that may, in time, challenge the likes of Visa card; and you can purchase crypto ‘bundles’ or unit trust-type investments spread across a variety of the top cryptos.
One of the big criticisms of gold is that it earns no dividend and pays no interest. That’s now a thing of the past, with the launch of AuBit, a gold-based crypto that generates a return on gold using the power of an ever-expanding network of participants who earn a percentage of transaction fees.
Every imaginable corner of the financial world is being overhauled, digitalised and decentralised, including stock market shares. This is part of a financial revolution called DeFi or decentralised finance, where intermediaries such as banks and advisors are being cut out of the loop. The rise of DeFi was identified as one of the most bullish crypto developments of 2020 in a recent survey by Digital Currency Group, one of the largest venture capital groups in the world focused on this sector.
There remains an understandable perception that cryptos represent the financial Wild West. They are largely unregulated (though that is changing fast) and this was by design: the blockchains on which cryptos nest are distributed ledgers falling outside the control of any central bank or authority.
The bitcoin blockchain details every transaction back to its launch, and this is freely available to the public.
Its transparency and security is now proven beyond any doubt.
Regulators can impose rules and standards on the exchanges and fintechs operating in this space, and are doing so, but the blockchain itself is beyond their reach.
The famed and mysterious Satoshi Nakamoto who designed this system more than a decade ago set out to construct an alternative financial system that bypassed the banks and regulators responsible for the financial carnage of 2008.
The early adopters were young and tech-savvy. That’s changed in recent years with the likes of JP Morgan now providing banking services to bitcoin businesses, and rolling out its own cryptocurrency – just three years after CEO Jamie Dimon called it a “fraud”.
Billionaire investors such as Peter Thiel, Paul Tudor Jones and Hong Kong’s Li Ka-shing are deeply invested in this new financial universe.
PayPal recently gave its blessing to cryptocurrencies, and last week announced that customers would be able to buy, sell and hold cryptos in their PayPal wallets – prompting an immediate surge in the bitcoin price.
There’s an incredibly fertile crop of crypto and blockchain start-ups right here in SA that are re-engineering the world of finance. There are multiple exchanges, such as Luno, VALR (pronounced “Valour”), Ovex and BitFund, not to mention large international exchanges such as Binance and Coinbase.
At Moneyweb, we’ve covered Revix and the crypto investment ‘bundles’ it offers in some depth. Then there’s EC10, backed by former FNB CEO Michael Jordaan and headed by CEO Earle Loxton, offering similar index-type investments in crypto funds. With BitFund, you can make your own index-type funds in minutes.
We haven’t even touched sides here
Some banks – notably Investec – have exciting new products and developments built around cryptocurrencies and blockchain.
There’s a lot of ground to cover, and things are moving at the speed of light. We’ll try to keep you on top of it all.
We invite you to send through questions, and we’ll try and answer them as best we can.
We will also host forums where different aspects of crypto will be discussed, from regulation to taxation, technical analysis, scams and the like.
We’ll also be introducing our readers to the who’s who of this fascinating new universe through podcasts and webinars.