Forget all those “crypto currencies” that not even self-appointed experts can tell apart without a scorecard. Some of those digital coins may indeed go stratospheric. Others won’t even be worth the paper they aren’t really printed on. It’s a little like staking a claim in the gold rush: one bit of dirt hides the nugget, the next one is only good for growing potatoes.
And like the time-honored market wisdom goes, when there’s a gold rush on, the guy who really gets rich is the one selling everybody the shovels. Potato or nugget, he doesn’t care.
That’s why the big boys like Goldman Sachs have been talking up the blockchain while the crypto world churns. You can read their overview HERE but it’s really simple. If every crypto currency gets dug out of the digital dirt, the blockchain is the golden shovel that makes it happen.
Now there’s already a few copycat blockchain stocks around trying to catch the buzz, which makes it tricky to tell who really has the shovel and who’s just . . . shoveling. If you’re new to the blockchain industry, it’s easiest to start with a true pure play like Global Blockchain Technologies Corp. (OTCMKTS:BLKCF) before hitting the deep end.
Global Blockchain is especially interesting because it’s so strongly committed to the blockchain business that it spun out its own “coin mining” assets a few weeks ago. This is a pure shovel stock now, completely removed from the grind of grubbing crypto, block by data block.
Naturally stripping the coins into a separate stock has taken some of the sizzle off the BLKCF chart. After all, we’re only dealing with a small chunk of the Global Blockchain that traded well above $1 a few months ago, so it’s logical to see a little near-term discounting while we figure out what the remaining company is worth:
If you’re looking for the Manitoba and Mozambique mining operations or the “distributed processing” unit, BLKCF can’t help you now. This is NOT a “bitcoin stock” any more and we would be offended if anyone thought it was.
But we can gauge where the new company can go from the missing pieces. The mining side’s crowning glory was 175 megawatts of computer power, which recently translated into about 175 bitcoin per HOUR, 24/7/365. That’s 1.5 MILLION coins per year, and at current prices the revenue potential could ramp into the tens of billions.
Of course all that’s on the other stock now, the one that won’t even be available to trade until next month. So do the math: if BLKCF could support $0.60 per share before the spinout and losing the mining was worth a $0.30 haircut, it follows that the market is valuing the shovels roughly the same as that 1.5 million coin operation.
But the revenue potential on that side is HUGE. How can what’s left and what’s gone add up to roughly 50-50? Simple: to people who know the blockchain, those shovels are JUST AS SEXY in the long term as the coin mine.
Let’s talk about that blockchain and how Global Blockchain is jockeying for an outsize taste of what could become TRILLION-dollar markets, opportunities that together already dwarf the currency applications.
The Blockchain Bonanza
Goldman Sachs hints that blockchain technology can be the foundation of an all-new Internet that’s safer, more efficient and scalable to accommodate billions of devices in the so-called “Internet of Things.”
Blockchain is just a way to encrypt data so tightly that the computing power required to hack, crack or counterfeit the file is more expensive than access is worth. On that level, it’s brute economics, the best guarantee yet that devices and systems are secure.
Money is a system. Where all those anti-tampering inks, watermarks, holograms and magnetic strips protected physical currency, blockchain protects “crypto” currency, which means that no matter what each of those digital coins is worth on a given day, you can’t fake the number of them you have in your account.
But even money is only the obvious slice of the blockchain revolution, the first “killer app” that companies like Global Blockchain are chasing now. Blockchain code authenticates transactions, which makes it an obvious game changer for one or two gigantic institutions . . . banks, brokerage firms, custodians, payment networks.
And because a “transaction” can be physical as well as a transfer of ownership, blockchain can track packages and inventory, even monitor pill intake and medical treatment. Suddenly logistics and healthcare look overdue for disruption.
When the property is intellectual, similar applications apply. If you own a picture, a song, a molecule or a movie, blockchain tracks “fair use” and flags pirates in its ledger of transactions. Best of all, evidence of unlicensed viewing is transparent to all, making it hard for the guilty to claim ignorance or accident. Want the file? Pay for a license like everyone else.
Even contracts can become blockchain aware, with code embedded in the “paperwork” to trigger instant consequences for breaking the deal. It’s not hard to imagine a blockchain bond issue that carries its own default “insurance” — even if the borrower busts, the lenders know that their risk is contained. That’s credit markets, credit scores (!), credit cards, mortgages.
And at that point, we’re still only scratching the surface. Think of how the first wave of the Internet revolution a generation ago changed lives, while making some people rich . . . and others, like Steve Jobs, Bill Gates, the Google guys and Jeff Bezos himself, EXTREMELY rich.
Just like Internet 1.0, blockchain technology will create huge winners and also-rans. But unless you’re in the game early on pure blockchain stocks like Global Blockchain, you miss the real fun either way!
Ten years ago mighty Amazon traded below $80. Now it’s tracking within sight of $1,600. If Global Blockchain is one of the ultimate winners, early adopters who see the potential now could be in an almost unimaginable position by the time 2028 rolls around.
Of course we’re still in the early stages so the ante on BLKCF is currently a whole lot lower . . . even a glide from $0.30 to where Amazon traded in early 2008 would be the score of a lifetime on just about any other stock. But with conviction and vision, the sky is truly the limit.
Picking the juicy targets first
I think you’re in position now to grasp why the market values the blockchain piece of BLKCF the same as the coin mining side with its BILLIONS in free cash flow potential. Crypto currency is a known quantity now. People can figure out that it means money.
We’ll see where the coin mining stock trades when it hits the market. For now, Global Blockchain may be a little less “mature” than the coin industry, but that just means the share price has more room to cover on the way to its ultimate destiny — wherever that is.
Management here doesn’t have their heads in the clouds trying to cover all the blockchain bases at once. That strategy died in the dot-com crash. All they want is to pick off the easy commercial opportunities and roll their way from $0.30 to critical mass, market to market and app to app.
Think of Jeff Bezos, the richest man in the world. He started with bookstores, a nerdy niche whose days were already numbered in the TV era. Global Blockchain is following his playbook, going after the “lowest hanging fruit” first.
It’s not exactly trivial stuff. Global Blockchain has MILLIONS invested in these plays. The goal is naturally to hit one or more home runs in the foreseeable future. Start with the games. This tiny little company has at least $12 million staked on strategic bits of various sports and gaming companies: Breaking Data Corp. (which runs GIVEMESPORT, a 119 million fan network), Millennial ESports Corp. (racing apps, in-game currency) and MEvU (pronounce it “me versus you,” online betting).
That’s a lot of dots to connect, but the blockchain angle shows up loud and proud when you do it. The game company provides the software and the drive to create new digital “currencies” in order to run in-game purchasing. That part could be true genius: suddenly “money” becomes whatever token or credit the designers can dream up!
And then the betting system is obvious. Blockchain can automatically verify all wagers and hold the money, effectively replacing the traditional “house” and its cut of the action. (Average standard “take” is 10%. MEvU is viable charging less than 3% . . . lower than some credit card transaction fees!) With $400 MILLION wagered every year just on sports games, the potential is big. And with GIVEMESPORT on deck, Global Blockchain can market to one of the biggest captive sports social networks around, 45% bigger than mighty ESPN on Facebook alone.
From there, the “Bezos effect” starts kicking in as longer-lead projects mature. Remember the Kodak coin? Recently shares of tired old Eastman Kodak quadrupled when the company announced that it wanted to launch its own crypto currency.
This one started out as a way to track photo rights to crack down on image pirates — reading between the lines, if you want to protect a picture, pay the photographer or just make sure you’re not stealing the rights, you’d have to deal with Kodak and its blockchain.
But the buzz only stops at pictures because Kodak used to be a camera company. Once they work out the kinks, blockchain can protect movies, songs, books tighter than the best anti-piracy codes of previous generations.
Long story short, Global Blockchain offered $2 million to buy EVERY SINGLE ONE of the initial Kodak coins. If their early bid is accepted, they run that niche. Every BLKCF share will also carry about 1/5 of one Kodak Coin, if I’m doing the math right.
If Kodak Coins ramp up anywhere near the $10,000 that more prominent crypto currencies command, you see the instant value right there.
Will Global Blockchain use those coins to police the image market? Will they extend the technology to go after movie and song pirates? Early innings down here at $0.30. My guess is that the sports and gaming side comes first.
But down the road, management is ambitious. They’re looking at “investments, agreements, partnerships and independent in-house initiatives to create and incubate Internet scale public blockchains, enterprise solutions, tokens and ICOS.”
That’s a lot of Silicon Valley buzz mashed into a single sentence so Global Blockchain breaks their universe down in a little more detail:
- Trade finance in conjunction with major State actors
- Enterprise peer to peer storage solutions
- Ethereum hard fork with features that enhance it as a global payment rails solution (the Laser Blockchain)
- Tokenization of 3 incumbent gaming networks with over 200 million users including functionality for both e-sports and gambling
- Decentralized marketplace for big data geared towards the multi-trillion dollar “Internet of Things” industry
- Peer to peer fully decentralized lending marketplace built on the Laser Blockchain
- Securitization platform for artworks including music, video and brands in partnership with some of the world’s most recognizable artists, brands and studios, something not possible before the advent of blockchain
- Launch of an Exchange federated on the Stellar network with leading FOREX and remittance partners to be announced
- Launch of a cryptocurrency exchange with State backing
Wherever the sky takes them, they’ll be there. Step by step, Global Blockchain is more than a copycat blockchain stock. At the end of the day, you can add “Blockchain” to the name of a drink bottler or burger chain, but they’re still making drinks and burgers with a little added spice for Wall Street. This one’s working the chain from Day One.
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