"Change is the law
of life. And those who only look to the past or present are certain to miss the
future"
-JFK
Welcome to The
Golden Sense! A Hungarian team of engineers has been working on a new way
to fly the friendly skies. Their invention is called the Flike tricopter, a
flying bicycle designed to allow a person or equivalent weight of roughly 220
pounds to reach airspeed of up to 62 mph. Back in May, the Flike got liftoff
for about 1.5 minutes—an impressive display you can view for yourself on
YouTube. The Flike, which is powered by lithium polymer batteries, offers 15 to
20 minutes of hover flight or 30 to 40 minutes of cruise flight. The
contraption is expected to make its market debut in 2016 at a cost of around
$200k— comparable to a sports car. In most countries, an ultra-light pilot’s
license will allow a flight enthusiast to take the Flike for a spin. (Brown,
2015)
Speaking of flying. The
advent of new technology seems to be really taking flight. Most of the new
technology is ultimately for the better as it creates more credibility and
speed of process for people to interact with each other.
The following article is
written by E.B. Tucker, editor of The Casey Report. I thought
it was an excellent identification of a trend and I couldn’t leave it off the The
Golden Sense.
-As you read this, Wall
Street CEOs are panicking. They’re holding secret meetings about a new
technology that’s going to change the financial world…and potentially make them
obsolete.
Soon, you’ll be reading
about this technology on the front page of The Wall Street Journal and The
New York Times.
It’s going to radically
change how people do business…just like the Internet changed how people
share information.
I know these are big
claims. Let me explain…
The new technology is
called “blockchain.” You may know it as the engine behind bitcoin, the digital
currency created in 2008.
You can think of
blockchain as the plumbing that makes bitcoin work. But blockchain is not bitcoin.
Unlike bitcoin,
blockchain is not a currency, and it’s not money. It’s a technology that’s
going to change the way people buy and sell things.
It’s more secure, cheaper,
and far more reliable than any system of payment that exists
today – including cash, checks, and credit cards.
Soon, you’ll use
blockchain to buy a TV, a car, or a stereo. You’ll also use it to buy things
like stocks, bonds, and real estate.
Blockchain 101
Blockchain is an “open
ledger.” It keeps track of transactions, just like an old-fashioned ledger on a
store clerk’s counter.
But the store clerk’s
ledger is only for him to see. You’ll need a warrant to see it even if you’re a
paying customer. If you do get a warrant, he might change it before you see it.
An open ledger is
different. It’s visible to everyone involved in a transaction. Buyers, sellers,
regulators, and anyone granted access can see the ledger. Plus, everyone
involved in the transaction has their own copy of the ledger on their computer,
and all copies must agree. This prevents stealing or fraud.
Here’s an example. When
you buy a pair of shoes using blockchain, both you and the seller “broadcast”
the transaction over the Internet. Everyone updates their copy of the ledger
for your transaction. Then everyone compares ledgers. When there’s disagreement
about the content, the most common ledger is accepted as the “truth.”
Then the transaction
becomes permanent. The record in the ledger can’t be changed unless all people
in the transaction agree to it.
We call this
“decentralization”…because it takes the power out of the hands of a single
institution like a bank. And it puts the power in the hands of the people doing
the transaction.
With blockchain, no
central authority or group can manage or manipulate a transaction. And no one
can steal things that are secured by blockchain. Not thieves, hackers, or even
the U.S. government.
This incredible security
is what makes blockchain so amazing.
In 2013, the U.S.
government tried to seize over 600,000 bitcoins worth over $100 million. The
Department of Justice claimed the owner of these bitcoins was breaking the law.
However, because
bitcoins are built on blockchain technology, the bitcoins were worthless to the
U.S. government. Only the owner could sell or spend them. If he didn’t agree to
the transaction, they could not be sold or spent. Period.
Changing the Way We Buy and Sell
A long time ago, people
bought and sold things face-to-face. If you wanted a pair of shoes, you bought
them from the town shoemaker.
This changed as
technology advanced. Today, you can buy something from China without ever
knowing the seller.
Companies like Amazon,
the gigantic online retailer, make this possible. In exchange for connecting
buyers and sellers and making sure the transactions run smoothly, Amazon
generates tens of billions of dollars in sales per year. Amazon is the
sixth-largest publicly traded company in the U.S., worth $317 billion.
Or think of it this way.
You’re reading a financial newsletter, so you likely buy and sell stocks. When
you buy a stock, how do you know the seller actually owns the stock? How do you
know he won’t take your money and run? And how does he know you’ll actually pay
for the stock?
You may never think
about these things. But making sure stock transactions run smoothly is big
business for Wall Street. It’s a full-time job for tens of thousands of highly
paid lawyers, accountants, bankers, brokers, and custodians. In exchange, we
pay them hundreds of billions of dollars in fees and
commissions.
In 2008, we saw these
“middlemen” collapse. Markets froze up. These pillars of our financial system
are not as strong as we thought they were.
Blockchain can replace these
middlemen. It’s faster, cheaper, and more secure than the middlemen.
For example, when you
place an order with your broker to buy a share of stock, it takes three full
business days to “settle” (for you to actually own the share of stock). This
means it takes 72 hours to buy, pay for, and officially own a share of stock.
This same process would
take less than a minute on a blockchain. It’s like the
difference between mailing a letter and sending an email.
And stock ownership
recorded on a blockchain isn’t some far-off dream. It’s about to happen right
now. Online discount retailer Overstock.com (OSTK) just got clearance from the
U.S. Securities and Exchange Commission (SEC) to issue up to $500 million worth
of stock on a blockchain. Other companies will follow suit.
NASDAQ announced a
blockchain-based stock-trading platform called Linq last year. Other exchanges
will follow.
Credit card companies
like American Express, Visa, and MasterCard have also invested millions in
blockchain. They know the way we buy and sell things is about to radically
change. And they don’t want to be left behind.
-The future looks pretty
good. One day we may just be flying a bike and buying stocks with our smart
phone using a blockchain system.
It all seems cool to
me...
Over and Out
T. Norman
References:
Brown. 2015 Bank
Investment Daily
Tucker. 2015 Casey Daily
Dispatch
