Steve's note: I'm no cryptocurrency trader – but if you own these assets, you need to know what's happening in this fast-moving market. So today, we're sharing an updated essay from Fred Marion, who has years of experience in the industry. These days, he works with my colleague Eric Wade at Crypto Capital. And in this piece, he covers a big crypto story – one that's already changing the landscape...
If I had to come up with a plan to grow the crypto industry up to 90 times, here's what I would do...
I would find a global social media network with 2.7 billion monthly active users and give them a crypto that's resistant to inflation.
There's no single event that could possibly be bigger than that – at least, short of a dollar collapse or a government adopting bitcoin. It would rewrite the rules of money.
That's exactly what Facebook wants to do with libra.
By now, you've probably heard at least some details about libra, the brand-new cryptocurrency that Facebook is developing...
Today, I'll explain how libra could cause the size of the entire crypto industry to grow by as much as 90 times... virtually overnight.
But as you'll see, even if Facebook's plan never comes to fruition, libra has already made a lasting impact on the crypto industry. And that's great news for investors in the space. Let me explain...
Facebook's proposed "supercurrency" would be 100% backed by fiat currencies and government bonds. Unlike fiat currencies, though, it would be run on a blockchain. (That's the public ledger technology that powers bitcoin.)
The company wants to roll libra out across all its social media platforms – Facebook, Messenger, WhatsApp, and Instagram. And its ambitions don't stop there...
Facebook has partnered with around 20 other companies and nonprofit organizations to run the network through the Libra Association. You'll recognize many of the names... Uber Technologies (UBER), Lyft (LYFT), Spotify Technology (SPOT), Vodafone (VOD), and more.
Many folks fixate on the fact that Facebook can promote libra to 2.7 billion monthly active users in total, across its platforms. But don't forget the company's partners...
Overall, libra's partner companies (excluding Facebook) serve at least 750 million people. That's roughly three times the size of the entire adult population of the United States.
Of course, we must acknowledge that significant overlap exists, too... If a customer uses Uber, he probably uses Facebook, too. And if he uses Spotify, he likely uses Instagram.
That doesn't change the main takeaway, though...
Libra's reach goes far beyond Facebook alone. With all its partners, libra could be advertising to nearly half the world's population in less than a year.
In fact, libra is already extremely well-known...
A survey from retail brokerage eToro in July found that 16% of American adults already knew about libra just a month after it was announced. That makes it the second-best-known crypto out of more than 6,000 in the world today. (It trailed bitcoin, which came in at 58%.)
It's impossible to know exactly how many people own crypto, but the numbers are small...
Just 20.4 million bitcoin addresses (think of them like accounts) exist that are worth $1 or more. And only 7.7 million bitcoin addresses are worth $100 or more. Most estimates say there are anywhere from 30 million to 60 million active crypto holders in the world.
If libra launches, it could expose up to 90 times as many people to crypto almost overnight, just by reaching Facebook's audience.
But here's the thing...
Regardless of whether libra ever launches or not, it has already revolutionized the crypto industry.
That's true for two reasons.
First, it's forcing everyone – from world leaders to ordinary folks – to ask fundamental questions about money...
In July, members of both chambers of the U.S. Congress grilled Facebook Cryptocurrency Chief David Marcus. It was political grandstanding at its finest. But some lawmakers got it, and the subtext of their questions was profound.
The bitcoin community has been asking these questions for a decade...
Who should control the monetary supply? Why do the poor pay more in bank fees than the wealthy? Should bureaucrats be able to track every financial transaction we've ever made? Is inflation really required for growth? Or is it a way for governments around the world to quietly appropriate money from their citizens?
With the fiat monetary system showing cracks, these questions are only going to grow louder. And the answers will become even more important.
There's one major problem with libra as a form of money, though...
Former Wisconsin Rep. Sean Duffy pointed it out at the congressional hearings when he held up a $20 bill.
"Everybody can use a $20 bill," Duffy said. "This $20 bill doesn't discriminate on anything. You can be a murderer, you can say horrible things, you can say great things. This $20 bill can be used by every single person that possesses it."
That's not true of libra. And that could be its undoing...
You see, libra is "centralized." Facebook and its 27 partners will run it like a crypto cartel. Only the "in" crowd can process transactions. And in theory, that means the association could block specific users. Even worse, it could potentially seize assets from people.
The Libra Association would wield tremendous power over its users. And if it reaches scale, the association would have tremendous power over governments, too...
That's because the association plans to back every libra with fiat currencies or bonds. If libra reaches scale, the association could one day control trillions of dollars.
It could exclude (or promise to include) certain currencies as its backing. Or it might suddenly decide to buy German bunds instead of U.S. Treasurys. It could even blacklist a country from using libra altogether if it wanted.
Lawmakers, economists, and bankers are nervous about that concentration of power. And in countries where inflation is a problem, libra could wipe out the local currencies altogether.
Governments will fight that tooth and nail.
That brings us to the second reason why libra is revolutionizing the crypto space...
It's highlighting bitcoin's benefits.
While governments might regulate libra into the ground, bitcoin will continue to thrive. Unlike libra, bitcoin is "decentralized."
Sure, governments can stop companies from selling bitcoin to murderers. But they can't stop the murderers from using bitcoin altogether. Anyone can mine bitcoin (the process of creating new bitcoin). And once they have it, they can use it outside the banking system.
It's like that $20 bill. It's fungible. And that's a requirement for a good form of money.
(Of course, some third-party providers can refuse to serve clients with tainted bitcoin... but that's the same as cash. Banks can refuse to process cash transactions for criminals, but the criminals can take their money elsewhere.)
Decentralized networks are all-or-nothing. They don't discriminate... And that's why North Carolina Rep. Patrick McHenry called bitcoin an "unstoppable force."
Libra's future remains murky, but it should be a wake-up call for everyday investors...
Whether Facebook and its partners ever launch libra or not, corporate money is coming.
Governments may be able to bully Facebook into backing down, but another corporation will pick up the pieces and try again. Maybe it will be Alphabet (GOOGL), Amazon (AMZN), Alibaba (BABA), Walmart (WMT), or someone else we're not even thinking about today.
Someone will learn from Facebook's approach, and come up with a new and improved one... one that satisfies federal regulators. And then, the world will see a wave of corporate money hit the market.
If libra does become a reality, we'll see a surge of investment across the entire crypto space... Once you have one crypto, swapping it for bitcoin or another crypto isn't much harder than sending an e-mail.
Libra is just an idea today, but it has already upped the ante. It has taken the conversation from inside coffee shops and around water coolers to the great halls of power... U.S. Congress.
And the more you learn about crypto, the more you'll see the many benefits of bitcoin...
It's the backbone of the entire industry. It's decentralized. It's inflation-proof because no matter what, there will only ever be 21 million bitcoins. And it's one of the few cryptos that aren't in the crosshairs of the U.S. Securities and Exchange Commission right now.
Crypto isn't theoretical anymore. It's no longer a fringe experiment. It's knocking on the door of mass adoption. And bitcoin holders will be among the biggest beneficiaries.
I should mention one last thing...
While my colleague, Crypto Capital editor Eric Wade, and I believe bitcoin is the one cryptocurrency everyone should own, it's probably not the best opportunity in the space right now.
Instead, your best shot at truly life-changing gains lies with one tiny crypto that most folks have never heard of.
On Wednesday, November 20, 12-term U.S. Congressman Ron Paul will be sharing a massive crypto story for 2020. Eric will join him to discuss why this development could break America's reliance on fiat currency forever... and why it could help you make 10 times your money or more in the coming months.
But if you're interested in viewing this exclusive online event, please don't delay... Click here to learn more right now.
Good investing,
Fred Marion
Editor's note: On Wednesday night, Eric will sit down with three-time presidential candidate Ron Paul to discuss a huge transformation in the crypto space. You'll learn why one little-known crypto could disrupt America's biggest companies... change the way you shop, work, and connect online... and give you a chance to make multiple times your money as this story plays out. Reserve your spot for free right here.
Further Reading
"Most people know bitcoin is a volatile digital asset," Eric Wade writes. "But how useful is bitcoin?" There are three big ways this crypto has utility. But as he explains, these three uses are only the start of something much bigger... Learn more here.
"Bitcoin is the largest and most widely known cryptocurrency," Eric says. But with roughly 5,000 cryptos currently trading, and more being added every day, bitcoin is just the beginning... Click here to read more: When It Comes to Cryptos, Bitcoin Is Just Scratching the Surface.
Facebook's libra coin could cause the crypto market to grow rapidly. But before you can buy into cryptos, you first need to understand how to set up these accounts...
TRIPLE-DIGIT GAINS AS GOVERNMENTS MOVE ONLINE
Today's chart shows why we love powerful technology trends...
Paper records are finally becoming a thing of the past. Businesses... doctors... and even governments are moving exclusively to electronic systems. Well-designed software makes it easy for these groups to input, analyze, and monitor information – and by storing it on the "cloud," workers can access it wherever they go. Today's company dominates an important piece of that market...
Tyler Technologies (TYL) is America's largest software company that only serves government clients – at the local, state, and federal levels. Its specialized products cover everything from court records to property-tax appraisals to parking tickets. And a new partnership with Amazon (AMZN) will help Tyler scale up its cloud-computing capabilities. Tyler's sales topped $275 million in the most recent quarter, up 17% year over year.
TYL shares have soared more than 150% over the past five years, and they just hit new all-time highs. As governments continue shifting to web-based software tools, Tyler should only keep growing...
