# 7 - The Rise of a New Asset Class

Chris Burniske & Jack Tatar on Cryptoassets - by Epicenter.tv & Untethered

Background

This week in decentralized land:

  • The upwards price movement is no doubt good for the entire cryptocurrency market.

  • This reminds me the price vs value argument again.

  • The price can move up and down 30%- 40% within a week, but the company didn't get three times better in the last weeks than it did in a few months back, given the fact that there are still no products for some companies out there.

  • As a result, I wanted to talk about my cryptoassets reference book - one of the first systematic views on cryptoassets from a mainstream investor’s perspective. “Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond”.

  • Epicenter.tv did a great job to interview Jack Tatar and Chris Burniske.


TL; DL (Too Long; Didn't Listen)

“In 2013, after writing about a book about retirement, I discovered the thing called “bitcoin”, and we took a look at it, I run a research firm, we took a look at it from the research perspective and at that time, we produce the research report that soon turned in a small book called “What’s the deal with bitcoin?” Then I started to look at it as an investment vehicle.” - Jack Tatar

“…that gave me a leverage of really focus on crypto, and really lost interest in equities by late 2016, early 2016, so I ran with ark crypto for about 2 years and then very amicably have transitioned on and remain on the board of ark but then now, I’m running my own firm called “Placeholder”- a venture capital firm that invests in decentralized information networks and centralized by token..” - Chris Burniske

“In crypto space, we are seeing the birth of digital of markets to priced digital commodities, so why can’t I trade cloud storage features or bandwidth features or GPU-flat features or all kinds of derivatives of those digital commodities and I think that what the crypto markets are creating are these global 24/7 markets to price this digital commodities and provision this digital commodities which is extremely important if we think about this transition from physical to digital that pretty much our entire society is going through.” - Chris Burniske

“We are in less than 10 years into 50-year techno-economic paradigm shift… You will get hurt if you’ll be buying a ton now, freaking out in 6 months because half of your net worth is gone and so on and so forth. So it’s really important to just responsibly ease on things. There’s no rush, we’re gonna go through booms and busts. The big one is probably a few years out when we’re in a trillion but it’s just so important to be cool-headed about what’s going on here.” - Chris Burniske


Insights

How Jack and Chris originally became interested in Bitcoin and cryptoassets

  • After couple of convincing over a scotch with friends, Jack Tatar, with his own retirement account, tried his research as a financial advisor to invest on the not-yet known “Bitcoin” back in 2013 after writing a book entitled “What’s the deal with Bitcoin.”

  • Seeing a financial opportunity, that led Jack to Chris and writing another book entitled “Cryptoassets: The Innovative Investor’s Guide to Bitcoin and Beyond.”

  • Chris on the other hand started things from ark investments after being dragged down by a friend during his last year of college.

  • It was in early 2012 and were really excited with different concepts though at that time, the main application that Bitcoin is supporting is the silk road.

  • It was very limited if you weren’t a developer. It has been an interesting experiment for Chris.

Why the term cryptoassets is a good umbrella term for the different kinds of tokens

  • The assetclass is more of a native into information networks. It is to pull the asset conversations with currency so they can avoid dead-end arguments around not having so many currency, and that it’s too volatile, and other reasons.

  • Cryptoassets have verticals, sectors and market values.

  • As of right now, we have cryptocurrencies, cryptocommodities and cryptotokens and the fourth that will be added soon is crypto collectibles.

The different categories of cryptoassets: Cryptocurrencies, cryptocommodities and cryptotokens

  • Cryptocurrencies are for exchanging this unit to the platforms it’s being used for goods and services, stored value, and unitive account to measure its value. e.g. BTC, LTC and Z-cash Ripple that targets currency in a more universal sense.

  • Cryptocommodities are just like physical commodities like oil, wheat, natural gas, copper, gold, etc that lays a foundation to build finished goods and services.

  • In digital worlds, digital commodities were cloud storage, bandwidth features and the likes.

  • Cryptotokens were the finished digital goods’ and services’ provisions to consumers.

How cryptoassets fit into an overall investment portfolio

  • Cryptoassets fits on an overall investment portfolio as it has medium with utility value and speculative value.

  • When something comes out, something new, there’s a high “speculative” value

  • Some point in time, it became a utility value as people start needing them, hence people “seeing” it.

  • To value cryptoassets as a future expectations of future utility and not current utility value.

Whether we are in a cryptoasset bubble and expectations for the future

  • A multi-decadal game. This is a less than 10 years into 50 years techno-economic paradigm shift. It fits all the pattern with 1 to 5 percent risk profile.

  • Definitely a lot of growth since there’s a web-consolidation and data-aggregates that crushes all competitors and there’s block chains with fast-growing markets with all kinds of volatilities.

  • There will be a crash that should be classified as 80%, we can have 2018 as the peak with 4 trillion and 40%.

  • There will be trillion losses but until then, not obsessing with preparing for corrections than incorrections.

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