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Is crypto a good investment?

May 4, 2023   Category: Advice, Bitcoin, Blockchain, crypto, Ripple

I’m not sure and I even know the guy who created Ripple.

The internet is filled with stories of ordinary Joe’s who got rich buying crypto. I know one guy who bought a bunch of Bitcoin at $50. I also know the guy who created Ripple. Even with knowing their stories I’m still not sure about crypto currency as an investment.

Around 2007 or maybe 2008 I sat in a cafe in Vancouver, Canada with my buddy Ryan. At the time I didn’t really know him that well. I knew he was a computer engineer but that’s about it. He started telling me about this project he had abandoned a few years before. The way he described it it was a system that allowed people on the internet to determine value and trade between each other without currency.

I asked him why he had abandoned it. He said that after getting the system working he approached some banks to see if they would be interested in it. They all turned him down. Their reason? It would put them out of business.

At the time I remember saying he should continue working on the project. It sounded like a good idea to me. Also, I could tell he still believed in it.

Fast forward to 2023 and Ripple is the 3rd largest crypto currency. Ryan isn’t involved with it anymore. What it is now doesn’t seem anything like what he had told me in our conversation.

Real Money

Here’s the thing with crypto currencies like Ripple. People buy them using real money hoping that they can sell it back later for even more real money. To them, the idea that it could be used as a replacement to the banking system is a secondary concern or even less.

Any technology that can replace the banking system would be enormously valuable. Add the market cap of all the world’s banks together and I’m sure it’s in the hundreds of trillions. That would be a good investment (at the right price).

However, buying crypto currency is not like buying shares in the company that makes the crypto. If they’re thinking about it at all – this is what crypto currency is mistaken for by most people.

So until there are shares in a company that is serious about applying blockchain technology to do things like replace the banking system, I’ll be cautious about buying crypto with my hard-earned money.