Digitex 2nd chance? No way!

In this short post, I just want to make it very clear why I will be going nowhere near the ‘second chance’ auction of Digitex Futures this week.

In the ICO a few weeks back, tokens were sold for $0.01 (one cent). Somehow, apparently, one large investor was able to secure around 22% of the tokens for around $1.2million.

The guy behind this (who, I have to be honest, I feel less confident in the more I watch his videos) has bought back that large investor’s tokens, and is now offering them in a reverse auction.

The thing with a reverse auction is that the price starts high and, over time, gets lower.

The Digitex boys have doubtless done this because their initial offering sold out in 17 minutes, and they doubtless feel they could have made more money. A lot more money.

Their ICO raised around five million dollars – it would have been seven million but for the ETH price dropping back.

If there’s a feeding frenzy this time, and the tokens sell out within an hour, they will cost 25c each. Which is 25x what they cost a few weeks ago. Which is patently ridiculous.

There’s a good chance that when these tokens become available on the exchanges that they will go to five or six cents. If you bought at a cent, you’re in clover. If you buy at a quarter, you’re in shit.

The first ICO brought in five million; the Digitex boys have a good chance of bringing in $25 million from this reverse auction. But they shouldn’t be doing this. In my opinion. It stinks. In my opinion.

Here’s the video which explains how the reverse auction works:


The one proviso to this is if the reverse auction is still running 24 hours after it starts, when tokens will be available for one cent again.

I believe there are enough mugs around who will buy these tokens at a huge multiple of even the most ambitious early valuation for the thing to sell out in a couple or three hours at most. They were great value when first offered in the ICO. They are likely to be desperate value in this week’s reverse auction.

Don’t be one of the mugs. As soon as the tokens are available on an exchange, you’ll be able to buy them at a few cents.

It WILL be interesting to see what happens with this. But it WILL NOT be something to get involved in unless there are still tokens available 24 hours after launch (which is on 15th February).


Eye. See. Oh.

Weird Shit!

So that was pretty weird, right?

If you’ve been reading my thoughts on here recently, you might have been tempted to follow me in on the Digitex Futures ICO this past Monday.

If you were, then the chances are you – like me – were disappointed to discover that it was sold out very quickly. Like. Very. Quickly.

The thing went live on the hour, and was full up by seventeen-past. Seventeen minutes.

My own ‘speedy’ attempt to take a stake was lodged at 1.22pm, five minutes after Ethereum’s smart contracts functionality had boarded and shuttered the doors and windows on the Digitex ICO.

It looked an appealing proposition, and so it proved. But why did that happen? After all, most ICO’s run for a week – or even a month – and not necessarily because the offering is dogpile.

Before I answer that, let me outline what an ICO is…

ICO stands for initial coin offering, and it is the unregulated digital/blockchain equivalent of what is known in the stock market as an IPO (Initial Public Offering).

Essentially, a startup – generally but not exclusively – seeks further funding to move beyond proof of concept and into full production of whatever service their business provides.

Coins, or tokens, are the units which power the services and they also represent equity stakes in them. A bit like shares.

But there is a big important difference…

ICO’s are, currently but probably not for too much longer, unregulated. This is a good and a bad thing.

It is a good thing because it means anyone can get involved without being a high net worth individual or an investment company.

And it is a bad thing because it means anyone can get involved without being a high net worth individual or an investment company.

In other words, the nanny state has let its guard slip – for now – in this area, so anyone who takes more than a passing interest in brave new worlds, and does a bit of digging (due diligence it’s called in the finance world, but I think I prefer due diggingligence), can stick a couple of quid – or more, or less – into an ICO they like the look of.

But… if you’re reckless or feckless you can also easily wind up potless.

There are scams in these waters. Not as many as one might imagine, but certainly enough for caution aforethought.

ICO’s are the first offering to market – Initial Coin Offering, the clue is in the name, right? – so they entice the would-be investor with the most attractive upside potential.

That comes with a commensurate clear and obvious risk on the downside. If you’re uncomfortable with potentially doing the lot, ICO’s are not for you.

I’ll say that again, because it’s really important. You could invest thousands, tens of thousands even, and lose every penny of it. That would be distressing, but it should never be a total shock.

If you’re inexperienced as an investor, I suggest you tread very carefully. Your appetite for risk is probably not the same as mine. Your investment tank may not have earned a portion for speculative status already, as mine has.

Please tread carefully.

OK, back to Digitex…

The thing with this particular ICO is that it was a small one, underpinned by some good marketing.

The lads behind it were only looking to raise seven million dollars which, in ICO terms, is not a lot.

And they put some cute content in place to help people visualize what the product is, and how there is a demand for it.

I recommended this because I fully intended to get involved myself. And I’m pissed off that I didn’t.

But there are plenty more fish in the sea.

There is not only one successful bookmaker. There is not only one successful stock. There is not only one rising cryptocurrency. And there is not only one successful – or investable – ICO.

There are tens of ICO’s a week. Which presents a problem.

How do we know which ICO’s are worth our attention?

I make no apology for showing you more caveats than an illiterate tie-seller (geddit?) because it’s your dough and I want you to do the right thing for you and yours with it. I certainly don’t want you to do what I do in the vain hope that it’ll come up smelling of rose petals.

With my dough, I set aside a bit to muck about in a vaguely scientific manner with things I understand more than the average bloke but not even remotely to expert level.

As I’ve said before, there has been a rising tide lifting all boats to this point, and that may continue through 2018.

And it may not. This year or next, the crypto space will start to sort its shit out. We will start to see winners and losers. The losers will go to zero. Their ICO funds will run dry and they’ll fail to secure further funding.

That’s showbiz. It’s why this is wild west territory.

But it’s also why it’s so exciting picking between the runners in each ‘sector’ field.

I cannot tell you which ICO’s are worth your attention. But these are things I look for when I’m considering an investment:

  1. What are they actually trying to do?

Sounds obvious, right? But quite a few ICO’s are not trying to do anything more than ‘be the new money’.

Now, don’t get me wrong, I reckon that one or more – probably more – of the coins has a shot at being ‘new money’. I like bitcoin cash still, but perhaps not as much as I did four months ago. I still have about a third of my investment there. But that’s for another post.

The point is search for utility in an ICO: we want a genuine problem with a ground-breaking solution.

For example, how about storj, who do cloud storage (think Dropbox, Amazon AWS, or Google Drive, but without the big profiteering middle man).

Or loopring, who will integrate and homogenize the world’s crypto trading exchanges, creating essentially a single market for crypto trading.

Or, and I can’t remember the name of them just now – will post another day – the blockchain company who have an innovative solution to a growing problem for digital publishers.

The problem is ad blindness and, increasingly, ad blockers. The value of ad space on websites – even high traffic news sites – is reducing all the time, because we’re a) immune to ads and, b) taking steps to ensure we don’t see the feckers.

Anyway, these guys have come up with an idea whereby, rather than display ads as a way of paying journalists etc, publishers can siphon a tiny bit of processing power from the site visitor and put that to use mining cryptocurrency (or some other task of greater value to the publisher than its latent unused no-value to the visitor).

I don’t (yet) know the technical why’s and wherefore’s of that one. I don’t (yet) know the team behind it. Heck, I can’t even remember what it’s called! But I sure will be taking a deeper dive into their white paper. And in this paragraph, I’ve hinted at two other things I do when scouting an ICO.

2. Who’s on the team?

There’s a game of footy. Two teams line up. One of them has fancy tracksuits, slick mugshots and polished bios. The other has players I know; players I know can play.

I want to be with the latter. That’s not to say that the former, the fancy bios, cannot be a success – win the game in this analogy – but from an investment perspective if you know your team has experience, skin in the game, and a proven track record, you have a chance.

Ideally, we’re looking for a serially successful blockchain entrepreneur as an advisor at least. And we want hard core tech capability. Let’s take loopring as an example again.

Their tech top table has ex-Google, PayPal and Bank Of China senior staffers. And they are priveleged to have Da Hongfei (founder of the NEO blockchain), as well as VP’s and Chief Technical/Information/Executive Officers from some of the world’s largest companies, on their advisory panel.

That’s a big tick in the box of what remains a monumentally ambitious project.

3. Paper. White Paper.

It gets difficult here. There’s technical stuff to (sort of) understand.

All ICO’s publish a so-called White Paper: a document outlining who they are, what they do, how they’ll do it, and what purpose the coin/token serves.

If you’re planning to invest – and please excuse my frankness here – read the f’cking white paper!

At the very least it will help you understand some of the potential pitfalls of investing.

For instance, a good friend of mine who is rather good at this sort of stuff, Steve Brown, wrote about an ICO for Bankera on his blog. I trust his judgement so I took a look.

Product is crypto-based banking. There’s definitely a need for that.

Team looks well-rounded, if lacking in Premier League superstars (to my untutored eye).

White paper was a good read but did highlight what I consider to be the two biggest challenges – a. getting a full banking license (they already have an associate banking license) from the EU, and b. liquidity (getting enough deposits to make enough loans to operate as a successful bank for their token-holders).

There was enough in the combination of Steve’s recommendation and the established element of Bankera’s business – under the auspices of a related company called SpectroCoin – to justify a small punt.

This is the sort of company that probably won’t go to zero. It could be a big deal IF they can source that banking license – but their roadmap says that won’t happen until 2019, so it’s a wait and see play, regardless.

More likely, it’ll chip away off the back of its existing business model. Here, the downside appears to be limited – to some degree at least – whereas the upside has some fairly major hurdles still to overcome.

That’s the balance one needs to weigh up when looking at an ICO.

4. The Roadmap

Many ICO’s are barely out of the garage, let alone in the middle lane of the motorway of their development roadmap.

They all publish a roadmap – by this date, we’ll have done this; by that date, we’ll have x million users, etc – and some of them are a touch ambitious, shall we say.

Roadmaps are little more than timelines, and they need to be considered in conjunction with the team, the company capitalization (i.e. how much they’re trying to raise and what they propose to do with it) and, of course, demand for the product/service.

5. Capitalization

Digitex was ‘only’ trying to raise seven million bucks. Bankera has already raised 70 million euro (about 85 million USD) in an ICO scheduled to finish end of February, or when all the tokens are sold.

The former is a software platform where users will fund their trading with platform tokens; and some tokens have been held back for liquidity purposes.

The latter wants to be a bank, lending money. That means they have to satisfy international banking capital rules – i.e. they must physically have at least 20% of what they lend. Obviously, they need more capital.

But if a company starts off as a $100,000,000 ICO, how much expansion potential has it got? Can it be a billion dollar enterprise? If so, that’s 10x. Could it make five billion, 50x?

There are twelve crypto technologies with a market capitalization of five billion or more as I write. It would have been more last week, of course, and it may well be more next week.

There are 75 with a market capitalization of $100,000,000 or more. Out of the 1500 coins listed on coinmarketcap.com.

Put another way, does bankera have what it takes to be a top 75 coin… and break even? Probably, yes, because it has an existing user base of 400,000 and is opening 1800+ new accounts daily. It also has those ambitious expansion plans.

But to break into the top dozen it has a lot of work to do. Of course.

And the reality is that if the coin value doubles, that would represent a phenomenal return on investment in ‘old money’ terms. The additional risk of these new frontiers however means many players are engaging with an aspiration of a greater multiple.

Summing Up Time

How it ends, who knows?

But I do know this. I want me some ICO action.

Small pieces of a few, with one good winner paying for plenty of losers.

It’s how I bet racehorses, with a degree of success; and, while I obviously don’t consider myself to have the depth of awareness in this market that I do with the nags, I feel I’m asking the right questions to stand a chance.

My portfolio bottom line currently supports that perception. Currently.

Back to Digitex…

Now then, if you loaded some ethereum into a wallet ready for the big Digitex bonanza… and it didn’t happen… don’t worry.

And, if you fretted about the ‘crash’ this week with your money tied up, don’t fret (unduly). These are extremely choppy waters, where the waves rise and crash 35-40% four, five, six times a year.

If you’ve got the raw nerve to buy in a crash, you’ve made 25% in two days. And good luck to you. For the rest of us, there’s a very high likelihood we’ll ride this dip out and move into the next upward surge.

The evidence of Monday with Digitex, and the rest of the week in the crypto markets generally, is that the hunger for digital assets remains as strong as ever.

And there’ll be another Eye See Oh worth a second glance any time now…


Commission Free Speculation?

As you’ll know if you read my last post, I’ve been getting into the whole crypto thing quite a bit recently.

I was introduced to it by a couple of mates who are slightly less risk averse, and slightly more accustomed to non-sporting speculative punts, than me.

And I’m glad I was. When I wrote that last blog, 9th September 2017, bitcoin was about £3,000. Now, bang on four months later, it’s four times that price. Likewise, Bitcoin Cash. Others have increased in the interim by more significant multiples than even those.

Of course, a little knowledge is a dangerous thing, and in the new frontiers of cryptocurrency investment that makes most people dangerous to listen to. Including me. Perhaps especially me.

For what it’s worth then, here’s what I know:

– Digital payment is not new. Many of us transact daily without using hard (i.e. physical) currency. I’m friendly with the boss of my local coffee shop, and when he started four years ago he took cash payments only. He told me this week that 75% of his business is now cashless. Seventy-five percent.

– Alternatives to sterling are not new. Anyone who has bought more than a handful of items online will probably have paid in at least US dollars for something. There is a conversion charge associated with that, which is normally expensive. Someone in the middle is getting some.

– Alternatives to fiat (i.e. government/bank-issued) currency are not new. People have been putting their cash into gold, wine, art, oil, orange juice and pork bellies for as long as anyone wanted to avoid the economic policy whims of one nation or the global macro-economy.

– One cannot spend a bar of gold or a bottle of wine or an oil painting or a barrel of crude of a pig’s carcass any more easily than one can spend a bitcoin. And nobody has a problem with liquidating those commodities.

So there is nothing new in the world of cryptocurrency, per se.

But are the crypto markets over-hyped? Is there value to be had? Any halfway decent racing punter will be able to articulate the crucial relationship between price and value. As will any halfway decent market trader, or stock or currency or commodities trader.

The principles are precisely the same; the subject matter the only differentiator.

What is difficult, in any of these arenas, is accurately identifying value.

To use the sports betting analogy, bookies used to be the only option, tote aside. So, when Betfair came along, with their very-tight-to-100% markets, the wagering world swooned. And coughed the 5% commission. Because they were still generally betting around 106% on a race where the bookmakers were maybe 115%.

Bookmakers had to get more competitive, and they did. Concessions, the price economies afforded by operating remotely (i.e. no high street shops or cashiers), and managing liability against the exchanges have pretty much evaporated the value chasm.

That nominal 9% difference is now almost non-existent, with punters who can get on with bookmakers generally electing to do that. Best Odds Guaranteed, rick-laden early markets, and a glut of competition have made it easier than ever for the unrestricted punter to get close to breaking even, at least.

But most punters who apply these opportunities get restricted, their stakes – even when minimal to begin with – are limited to pennies. Thus, the exchange becomes the last vestige of the volume bettor. And here, ‘volume’ could be twenty quid, or even a tenner.

The exchanges are marketplaces. They are a liquidity game, swiping their 5%, or 2% or somewhere in between, from all matched transactions. Their job is to keep the wheels turning and to keep the liquidity rolling. To keep turning over the turnover.

For providing the marketplace they charge a commission.

That’s also what currency exchanges do. And share trading platforms. And crypto platforms.

But the margins are getting smaller.

Meanwhile, demand for crypto is higher than ever. A very frothy market in which direction nobody knows it is going. Is it over-heated? Probably. Will it continue to rise in the short term? Very likely.

The market is made up of bitcoin, and the rest. Bitcoin is, for me, a commodity, like gold. It has value because people say it has value.

More than that, it has demonstrable value because people will exchange chunks of fiat currency (pounds, dollars, euros, rupees) for slices of bitcoin.

The cost of transactions on the bitcoin blockchain – again, see this post for a few words on blockchain technology – are very high. Like, unfeasibly high for small ‘coffee shop’ transactions. And they take ages to get settled.

But plenty of wealthy, and not so wealthy, people are ‘buying and holding’ bitcoin as an asset. As a commodity. Like gold.

There is plenty of demand, for now at least, and a limited supply ongoing.

But what of ‘the rest’? Every other cryptocurrency has been ‘minted’ with utility in mind.

(Sidebar: Bitcoin also had that aforethought at the outset, but outgrew its utility because of technical constraints. It also didn’t need to evolve directly because of its ‘new asset class’ status. Bitcoin Cash spawned from the code base to serve the original utility of bitcoin: payments).

The other crypto’s are tokens which can be used to affect some utility or other. In plain English, they can be used to buy a service and/or, ultimately, physical goods.

We’re in the very early days of blockchain technology. The likelihood is that, as with the early dotcom years, there will be many more losers than winners, but the winners will go on to become behemoths of their sector.

Think FriendsReunited and facebook; mom-and-pop-eshop and Amazon.

Thus getting involved away from the top handful – Bitcoin, Ethereum, Ripple (?!), and Bitcoin Cash – is a very risky business. It also offers the potential for greater reward.

I have the vast majority of my (smallish) portfolio in Bitcoin Cash, Bitcoin, and Zcash. But I also have a few ‘penny share punts’: speculative plays that possibly won’t pay off but which were interesting to me at the time of investment and enhance my ‘skin in the game’ engagement.

I have small holdings in such as espers, ATBcoin, and siacoin. They are interesting to follow, and if any of them ‘break out’ the return will pay for the losers and some.

And that’s the main reason for this post: I’m getting involved with a new ICO (initial coin offering) next week. It was recommended to me by a friend who has been both lucky and good with his non-sporting speculations, and who likes the setup here.

The tokens from this ICO will be used to trade bitcoin futures – the most ‘now’ of now trading propositions. But here’s the kicker: this platform will enable traders to operate commission-free.

They will buy their tokens, trade in their tokens, and sell their tokens, all without commission. How is this achieved? By the platform operator minting some of the tokens for themselves of course – more like a share offering where the management team retain equity.

And, like an IPO, the management team have a vested interest in the ongoing success of the platform because it directly impacts the value of their own investment.

This platform aims to be the bitcoin futures trading equivalent of Betfair, but with two major differences:

  1. Betfair charges between two and five percent per transaction; Digitex will charge zero percent. Zero.
  2. Betting exchange trading volumes are quite small (in the millions per day); bitcoin trading volume in the last 24 hours was $17,704,000,000
    (£13 BILLION). In a day. Every day.

Demand for tokens – the only unit of currency acceptable on this commission-free bitcoin futures platform – is expected to be high, which could push the value of each token upwards.

Now obviously, at this point, please do take time to perform your own due diligence and get your head around the general context (i.e. crypto investing) and this  particular ICO.

There are other commission-free trading platforms emerging, in the same way that there are multiple betting operators and online retailers and banks and, well, everything really… some will survive and others will fail.

Things I am drawn to in terms of taking a punt on Digitex Futures are:


It’s being built by a team led by the UK-based developer behind Bet Trader, exchange trading software; and supported by established Ethereum/ blockchain developers. This already gives the project a leg up on plenty of ICO’s out there.


Most ICO’s are in some way incentivised and this one is no different. For those investing in the first week of the offering – which begins on Monday 15th January – there is a 20% bonus.

So, for every five tokens you buy, you’ll get a sixth as a bonus. Of course, six times nothing is worth exactly the same as five times nothing, and that could be the outcome here. Caveat emptor. Natch.


The ICO will provide for further development of the project and some of the initial liquidity on the trading platform. You can read more about it here.

Trading on the exchange is projected to begin in the middle of this year, though my own expectation is that towards the end of the year is more likely (just based on how development almost always takes longer than planned). So, while any investment is not tied up for that long necessarily, the action in terms of token price will align to the action in terms of exchange trading. That is what will drive demand for the tokens. Or not.

Before then, Digitex has to complete its build, run rigorous testing, get the tokens listed on crypto exchanges (which again drives demand), and then start marketing the platform to build ‘real’ liquidity (as opposed to the planned-for seeded markets, to keep spreads tight).


Here’s a video demo of the platform. The interface will look somewhat familiar to Betfair traders.


I would say there’s an 80% chance (number plucked out of my, erm, back pocket, but ballpark sufficiency) of this project going tits up, and any investment in it going to zero.

But 4/1 is a price I play every day when I think the upside is notably higher. Bitcoin futures trading is going to be a big thing. It’s more accessible than actually buying/holding bitcoin, and appeals to the gambler in everyone from stocks and commodities traders to hedge fund investors to the man or woman in the street.

Commission-free trading, or negligible commission trading, will eventually establish itself as the norm, because that’s how efficient markets work.

Whether this platform will be a/the winner, I don’t know. Whether it has to be an outright winner when the market is this big, I don’t know either. It probably doesn’t need to be the 800lb gorilla to yield a hefty return.

So, for me, there is a large amount of upside potential which mitigates the ‘shit or bust’ risk that almost all such ICO’s bring with them.

And thus, come Monday, I’ll be in for a few quid. Enough for me to be upset if it goes to zero, but not so much that any other portfolio plate has to stop spinning. A sensible sum in the context of the offering.

You can read more about it here, including how to register your interest.


p.s. If you decide to register your interest in this offering, I will get some tokens for referring you. I obviously wouldn’t be writing this if I didn’t think there was merit in the ICO. Nor would I be putting my own cash in the pot.

I know you know that, but I want to be absolutely up front and above board about it. If you’d rather I didn’t get a ‘ta muchly’ from Digitex if you decide to sign up, that’s absolutely fine. Here’s a ‘naked link’. Go take a look.

p.p.s. If you think it’s fair enough, then here’s my special link 🙂

p.p.p.s. I’m going to be using this blog much more in 2018 to share my own thoughts on the wider world, and stuff in it. I appreciate that won’t be for everyone, and I’m more than happy to try to respond to any questions where they’re a) reasonable and b) can’t easily be answered by a three word google search (!)

Time to join the chain gang?


I was pissed. I normally am at the vendors’ get-togethers. Masquerading as networking events, they are more an excuse for a bunch of blokes (it is exclusively blokes, sadly) in the horsey/betting online business space to exchange ideas and rounds of grog. Mostly rounds of grog.

But not all chat is horse and football, nor is it product launches or how’s the little one(s)…

A couple in the group, who you may know, are into broader ‘make money’ concepts. Forex trading and the like. John and Graham, mainly.

Graham is always getting his mobile out and showing me the latest trading gizmo he’s using to plunder a few extra quids – you can never have too many quids, apparently; while John is the sort to be less interested in little tactical projects, more inclined towards the macro: the game changer.

So there we were boozing and blustering the night away when the subject of bitcoin came up. Bitcoin, in case you’ve had your head under the pillow for the last five years, is a new sort of money.

You can buy stuff with it, and exchange it for other currencies, but you can’t get it in the bank. That was the bit I struggled with. Especially after a few of those Lagunitas IPA’s (fierce tasty, even fiercer alcoholic).

You see, I’m a bit old skool. In spite of running a tinterwebs business and betting on horses most days, I’m actually risk averse. Calculated risks around things which I broadly understand are what check my boxes.

I’d heard of bitcoin but I didn’t understand it. Still don’t fully understand it.


Join the Club?

Anyway, Graham and John were evangelising about something called Bit Club Network (BCN hereafter), and so too, separately but as a result of convo’s with this pair, was another mate in the trade – absent this night – Steve.

BCN is a ‘mining club’. Mining is important because it is how bitcoin – and other so-called crypto-currencies – manifest themselves. Instead of sooty blokes with lamps on hard hats and pick axes, though, bitcoin and its ilk are unearthed by computer algorithm.

The human resource of sweat and toil is supplanted by electricity and processing power which, as it turns out, is almost as expensive.

In a nutshell, bitcoins are liberated when computers solve complex mathematical conundrums. The solution is verified by the community (i.e. other bods in the same game) on something called the blockchain.


Welcome to the chain gang

The blockchain could be the single most important piece of computer technology ever devised: even more so than the internet itself. Why? Because it can be used as a settlement engine or market place for just about anything. And there are already prototypical replications of established business systems springing up, ready to challenge the old world order.

Betting exchange? Try augur. Bank settlement? Ripple. Ecommerce? Loads of ’em. What about intellectual property rights and/or business contracts? Ethereum has this cornered currently with something called smart contracts.

In each of those marketplaces, you trade tokens (coins, units of monetary value) with other users.

With. Other. Users.

Not with banks. Not with lawyers. Not with Amazon or Betfair or any other middleman creaming off a hefty percentage.

With other users.

There are three key benefits to this: price, trust and availability/accessibility.

Without going into detail, transaction costs are lower (think 0.25% to exchange currency instead of the 8% or whatever for Western Union to wire funds back home).

The ‘distributed ledger’ nature of the blockchain means that trust is engineered into the system and verified by individuals, not institutions.

And you don’t need a bank account to do this. A mobile phone will do. Many millions of people in the world don’t have a bank account, but they will be able to pay for stuff – even small stuff – using bitcoin and their phone, in the very near future.

This is not science fiction. This is happening right now. You can already buy stuff with bitcoin. Graham has a Mastercard loaded with bitcoin. (I’m guessing it’s not cost effective yet, because of the fact Mastercard are associated with it; but as soon as the payment system is locked into the blockchain, there will be no need for Mastercard, Visa, or banks… and it will be the sensible way to buy stuff).

Get in the game…

So how do you get in the game?

Unless you want to mine the coin from your computer (good luck with that if you’re using a standard bit of kit!), you need to convert a ‘fiat currency’, i.e. pounds, euros, dollars, etc, into a crypto-currency in the first instance.

This article in the Telegraph a couple of months ago shows how to do it; and, implicitly, tips the wink to how mainstream this is becoming.

Getting in the game can seem complicated. It certainly did when I awoke, hungover to hell, the morning after the vendors’ lash up.

But when I sat down to do it, it was a breeze.

1. Get a wallet. That’s where you store your online cash. Just like any other online account you might have: bookmaker, bank, email, etc.

2. Buy some bitcoin. Trickier, and you’ll probably have to demonstrate you are who you say you are first time around (sensible, eh?), but I was able to get this done in 15 minutes or so.

The bod from whom you buy the bitcoin will send it to your unique wallet address that you’ll get in step 1.

3. Transfer the bitcoin from your wallet to wherever you want it. Or don’t. I moved all mine into BCN initially and, as that has generated more bitcoin, I’ve re-invested it on an exchange. But you can just have it sit there building value.

Why am I telling you this?

So why am I telling you this? Well, I haven’t got anything to sell, so that’s the first thing.

I could promote Bit Club Network – in fact here’s my introducer’s link – but, to be honest, I’m not sure I wouldn’t have done better just investing the coins I bought to join the BCN mine myself.

Still, BCN are worth a look if you want to understand more about how bitcoin mining works. And there are some good elements to it, such as the chance ot invest in other altcoin mining (like ethereum, zcash, and others), and some interesting opportunities in the space (including CoinPay, a kind of Bitcoin visa card, which sounds really interesting).

But the main reason I’m mentioning this is that, if you’re an investor at any level, then you should be thinking about diversifying your portfolio into cryptocurrency/altcoin.

I’m not saying they’re the way, the truth, and the light; but, with a global market capitalization (i.e. if everyone sold right now) of $163 Billion they’re not going away.

Regardless of whether there may be a bubble forming in the short term (there may well be), it’s an exciting – and fast moving – space to be in.

My Portfolio

I really hope it’s obvious from what I’ve said already, but let me be clear.


Caveat emptor.

I’ve written it because I want to write about something other than racing from time to time, even though I still love writing about racing.

And, more than that, because it’s something Graham and John and Steve, have got me in to. (I really should go boozing more often! 😉 )

My current portfolio consists almost solely of Bitcoin and Bitcoin Cash, mostly the latter. Why? Because it has scalability to process larger numbers of small transactions which is an important function currently missing from the legacy Bitcoin. (SEGWIT and the Bitcoin scalability problem are discussed in more detail here, if you’re interested).

Is this the right move? Who knows. I’m not an expert by any manner of means. Far from it. And I’ve invested in a manner commensurate with my level of awareness, i.e. not much.

But enough to benefit from the rising tide currently lifting all altcoin boats, and to be able to trade into and out of a few of the less fashionable, more speculative, currencies.

I also had ripple, which I sold at a loss; and espers and siacoin, in which I’ve probably done most of my money. They were penny share punts and look to be going the way of such things.

And I made a few quid trading in and out of the volatility of viacoin.

Bitcoin was £300 a coin in April last year, when I got involved. I felt at the time that it was too high (based on nothing, I might add).

Bitcoin is now £3,500 – having been £3,750 a couple of days ago. Demand, from China as much as anywhere, outstrips supply in this most global of currencies.

Where will Bitcoin, Bitcoin Cash and the rest be in six months or a year’s time? Your guess is as good as mine, but the consensus seems to think Bitcoin – a safer bet, relatively – may go up another 30% before correcting back by year end.

Bitcoin Cash is seen as having more explosive short-term growth potential. Some predictions have suggested as much as 4x its current value. Whilst that is probably ambitious, there’s no doubt it has more upside than its older brother. It also has considerably more downside!

Closing Thoughts

My awareness of cryptocurrency has come a fair way since that drunken discourse eighteen months or so ago. And so has the value, maturity and demand for the sector.

It is still an emerging market, and will face challenges from the ‘old world’, including from financial institutions and, almost certainly, governments. (China recently banned initial coin offerings – the crypto equivalent of IPO’s – in their country; others, including perhaps USA, may follow).

But, five years from now, it is likely that most large offline businesses and just about all online businesses will have the facility to process Bitcoin transactions. As soon as it is financially viable – i.e. when I don’t need to pay PayPal, or Mastercard, or a bank, for the privilege – I will accept Bitcoin on geegeez.

Until then, I’d encourage you to get drunk and talk rubbish about the world with your friends. Oh, and maybe bag a bit of Bitcoin. You don’t have to buy a whole one!

– Matt