Cryptocurrency: Capturing The Carnage, BTFD!

[grarpamp]

Bill Ackman
@BillAckman
2h
The telephone, the internet, and crypto share one thing in common.
Each technology improves on the next in terms of its ability to
facilitate fraud. As such, I was initially a crypto skeptic, but after
studying some of the more interesting crypto projects, I have come to

Nov 20, 2022 · 10:24 PM UTC · Twitter for iPhone
457
859
330
4,859
Bill Ackman
@BillAckman
2h
believe that crypto can enable the formation of useful businesses and
technologies that heretofore could not be created. The ability to
issue a token to incentivize participants in a venture is a powerful
lever in accessing a global workforce to advance a project. The
problem
23
40
12
951
Bill Ackman
@BillAckman
2h
with crypto is that unethical promoters can create tokens simply to
facilitate pump and dump schemes. It may in fact be that the vast
majority of crypto coins are used for fraudulent purposes rather than
for building legitimate businesses.
18
41
10
842
Bill Ackman
@BillAckman
2h
Despite crypto’s ability to facilitate fraud, with the benefit of
sensible regulation and oversight, crypto technology’s potential for
beneficent societal impact may eventually compare with the impact of
the telephone and internet on the economy and society.
8
62
13
741
Bill Ackman
@BillAckman
2h
Initially, I assumed that there is no intrinsic value to any of the
tokens and therefore they simply represent a modern-day version of
tulip mania without the aesthetic benefits. But after examining a
number of interesting crypto projects, I began to
10
30
9
503
Bill Ackman
@BillAckman
2h
understand how a token could build intrinsic value over time. Two
examples may help to explicate my view: @helium created a global Wi-Fi
network used by @limebike and others to track devices globally as well
as for other uses which benefit by access to global Wi-Fi networks.
106
46
90
561
Bill Ackman
@BillAckman
2h
Helium’s global network of 974k hotspots was crowd created by
individuals who purchased and deployed Helium hotspots to mine HNT,
its native token. Customers who wish to use the network must purchase
HNT and burn it, ie, remove the ‘consumed’ HNT from its total supply
of tokens.
17
23
9
374
Bill Ackman
@BillAckman
2h
As a result, over time, a two-sided market for HNT develops in which
miners buy hotspots and deploy them around the globe to earn tokens.
Users, in turn, purchase HNT tokens in order to use the network. The
more demand for the network, the more demand for HNT.
6
12
4
295
Bill Ackman
@BillAckman
2h
Given HNT’s ultimately finite supply, the balance between supply and
demand yields a market price which increases or decreases over time
along with the success of the Helium Wi-Fi network. As such, HNT
becomes a valued commodity whose price is determined by supply and
demand.
14
17
5
297
Bill Ackman
@BillAckman
2h
DIMO collects valuable auto data from data ports in cars. It does so
by allowing car owners to mint tokens by capturing data from their own
car. The data are valuable for the car owner as well as for auto
manufacturers, suppliers, insurers, municipalities, etc. One can
envision
3
17
5
264
Bill Ackman
@BillAckman
2h
a two-sided market for DIMO tokens developing over time where
data-users buy and burn tokens that are minted by car owners with DIMO
data collection devices. (Disclosure: I am a small investor in DIMO
and am uninvolved in Helium.)
6
13
219
Bill Ackman
@BillAckman
2h
To understand the benefit of crypto-based business models, imagine how
difficult it would be to create Helium’s million-node network of
global hot spots where each node is placed in a location to optimize
the coverage of the network. Helium miners earn more tokens for siting
6
12
2
230
Bill Ackman
@BillAckman
2h
their nodes where they are most needed as miners earn more tokens the
more their node’s signal is demanded by users. Consider the capital
investment and time required for Verizon or ATT to create the same
network. Consider the regulatory hurdles and international
coordination
8
14
3
232
Bill Ackman
@BillAckman
2h
that would have to be overcome compared with the Helium model. While
@Tesla can build DIMO’s dataset for its own cars, how can any other
automobile company create a similar dataset for their own vehicles
that were manufactured before connectivity and data collection became
1
8
1
194
Bill Ackman
@BillAckman
2h
feasible. Furthermore, how can any company create a dataset of all
cars on the road today? While all cars made since 1996 have OBD
(onboard data) ports, other than DIMO’s token-incentivized model, I
can’t envision how a company in a non-crypto world can create
real-time access
5
10
3
182
Bill Ackman
@BillAckman
2h
to this data. Disclosure: I am a small direct investor in crypto
projects. The other two are @ORIGYNTech and Goldfinch Finance. I am
also an investor in seven crypto VC funds and a small investor in
companies that help with tax compliance and/or reduce fraud in crypto
8
19
7
228
Bill Ackman
@BillAckman
2h
i.e., @TaxBit and @trmlabs. In total these investments represent less
than 2% of my assets. I invest more as a hobbyist trying to learn than
as a careful investor as I minimize the time I spend on non-Pershing
Square investments so please don’t rely on my due diligence or
6
11
2
207
Bill Ackman
@BillAckman
2h
take any of the above as an investment recommendation. All of the
above said, I think crypto is here to stay and with proper oversight
and regulation, it has the potential to greatly benefit society and
grow the global economy. All legitimate participants in the crypto
ecosystem
11
32
5
367
Bill Ackman
@BillAckman
2h
should therefore be highly incentivized to expose and eliminate
fraudulent actors as they greatly increase the risk of regulatory
intervention that will set back the positive potential impact of
crypto for generations. As always I welcome your feedback.
152
16
8
423
Load more