Thursday, June 1, 2017

I think I'm falling for Cryptocurrencies

While a lot of the Soverign Man is about how the sky is falling down, I think he does make a good case about the primary appeal and function of cryptocurrencies - to cut out the unneeded middle man.

The internet and the power of technology is already raping and murdering middlemen jobs, left, right, up, down and center.

Like... email?

When is the last time you were worried that: Your email got lost? Your email provider opened your mail and took things out? Your email provider dropped your email into your neighbour's inbox instead?

Never. That's the answer. Now replace email with mail and email provider with postman and you see just how many problems can occur with middle men.

The business of mailing will always exist. Postmen will remain, but it will be niche. Like for Singpost parcels and online shopping. And free ad mailers to put my food on so my table doesn't get dirty / oily.

Then we have insurance and property agents being, slowly, but surely, chopped down by technology. Again, the business of insurance and real estate will always exist, and so will insurance / property agents, but it will be niche. Like for buying inferior products *COUGH COUGH ENDOWMENT PLANS / WHOLE LIFE INSURANCE COUGH COUGH** and complicated property deals. Bread and butter transactions like a freaking shield plan or buying and selling a HDB? Please, I  can't even. I'm trying to being serious. You don't NEED agents to do that, but if you WANT agents for that, you are of course free to pay whatever you think is fair for that "piece of mind", but understand that you are outsourcing because you doubt your competency or you are too busy or you are just lazy.

Those agents who can survive must accept a lower return on their outdated and increasingly useless skills.


Most of you would probably place a heavy weight on what top financial bloggers (not saying me hor, people like AK or Kyith who can move the market with their posts) say when they weigh in on particular issues. What about your financial advisor? Or better yet, the xiao mei mei relationship manager at the bank?

Not only is it cheaper to listen to financial bloggers, you probably trust them more. On top of having easily accessible, near instant information from them, you can probably also accurately verify the things that they say (unless its an opinion, as opposed to facts).

Middle men in the past used to have a role. That role involved gathering information and being trusted not to manipulate that information when presented, or profit from confidential information that they are transmitting.

And for doing that job, we pay them for it.

But that was in the past, when there were no other options.

In today's world, you want to know who is selling their house, at what price, and all the previous transaction data in the neighbourhood?

How much does it cost and where can you get it, and how quickly? Free, instantly, over the internet. Sure, it might take you a few clicks on a few different sites, but hey, it's free. Not happy? You can have your money back. Oh wait, it was free. Do you need me to remind you again how it was FREE?

Basically, with today's modernization and technological advances, using banks as financial intermediaries is like insisting on calling Comfort to book a taxi. Uber / Grab is easier and faster? No thanks, I like to do things the slow and expensive way, #thanksnothanks.

If you can already see the immense value in terms of speed and accuracy (no mistakes or misunderstanding when transmitting information from 1 party to another) of technology like:

email - instant sending of information
online ticketing - instant knowledge on prices, availability and NO SPELLING MISTAKES
uber / grab - instant availability and price transparency

I could go on with dozens more, but I think you get the idea. Things today are near-instant, with drastically lower costs compared to traditional methods (some even free), and with almost perfect accuracy (unless you input the data incorrectly, or the server is acting up, which is rare). We made the technology and we have vetted the codes to ensure that the technology runs the way that we have dictated it to be.


If so many things are going this way, why not Banking and Financial Services?

Why does my payment go from my credit card to my bank account to another bank account to the recipient? Why are fees 3%?

Why do I have to trust someone to update my bank balances correctly? Calculate my transaction costs correctly? Keep enough money for me to withdraw instantly?

Why do I have to pay cable fees + exchange rate spread when I send money? Why does sending money overseas take 3 business days?

Cryptocurrencies answers all these questions with actual, working solutions (NOT PROTOTYPES).

Account is completely controlled by you to manage.
Funds can only be sent by you. -> No deduction can be made without your consent
Funds are transferred directly from you to recipient.
Funds can be transferred near instantly to any destination, any person, any time.
Funds can be transferred cheaply 0.0005% - 0.02%
Funds can be transferred completely anonymously (sender? value? recipient? can all be hidden)

This address a plethora of issues and risks that transacting through the current financial system has. A custodian holds your money. You have to trust a 3rd party or multiple ones to make transactions. You have to pay everyone in the chain. Some transactions take a long time to complete / confirm.

These sound like small risks. Or risks that you've already accepted since there has been no other way around it.

However, in the future, you will not have to assume these risks. You can remove custodian risks. You can remove 3rd parties and not need to trust them. You can save money by not paying for these unneeded actors. You can transact privately and instantly with completely control of your funds.

The business of banking will always exist. Banks will remain, but it will be niche. All of the basic banking functions can already be done on the blockchain, and I wouldn't be surprised if most, if not all, can be done in the near future.

This isn't some imagined future. The technology is here. It is rapidly improving so that it will be user-friendly and adoptable by the general public.

Take India for example. With large parts of its population out of the banking system, and now adding to the currency controls, mobile payment platforms like Paytm are being overwhelmed. Sure, it doesn't use blockchain technology (at least I don't think so), but looking at how mobile transactions being so useful is just an example of how much potential this could be. Paytm even allows purchase of digitally backed gold that can be sold online or delivered. Cryptos can sever the link between weak government fiat and monetary policies if replaced inside this system. Instead of mobile wallets being charged with IDR and transactions being done with IDR and domestically within India, what cryptocurrencies can do is enable mobile wallets to be charged with cryptos, and transactions can be done in cryptos and it could be used internationally. Paytm is just an example of how a crypto marketplace could look like - mobile wallets and online purchases, but with the added stability of a decentralized network, the accuracy and confidence of blockchain and elimination of custodian risks (since the funds are always yours, not held in custody by a 3rd party).

Honestly, the more I find out about cryptos, the more I believe and see how life changing this technology is and can be for many many people. I'm thinking if I should start expanding my core competency and start covering CCs regularly on my blog. What do you guys think?

I guess I'll probably be the only blogger in Singapore doing it, but it is something that I can see taking off once the UX becomes friendly. The underlying technology is already here, the problem is now communicating the benefits and getting adoption and acceptance.

Lads, the future is bright, crazy and amazing - all at the same time.

Anyway, just some things for me to consider. Maybe I should review all the available crytocurrency gateways in Singapore as a start? I'm sure people are wondering just exactly how does one convert money to cryptocurrencies, and more importantly, how do they cash out if they feel uncomfortable or want to pocket profits. What do you guys think?


  1. i highly support you reviewing the available cyrpto coin in sg, how can we buy it using sgd, and etc.

    look forward!

  2. Seeing as how your 1.28% savings account post is still the top popular one, looks like most of the people browsing financial blogs still prefer MAS-cleared brick & mortar banks. For the rest of the population it'll be 99.999%.

  3. That'd be awesome. Maybe you can also cover where Bitcoins can be used directly instead of being exchanged into fiat. Less fees!

  4. Hey GMGH, I fully support your cause for the betterment of mankind! :)

  5. please do fast. Thank looking forward to this new adventure too.


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