As I read Jake Adelstein’s excellent book on Bitcoin, I’m thinking about Pokemon. My son got into Pokemon when he was not yet old enough to read. Actually, I think it was the main reason he learned to read in the first place — he thought it was a hack so he didn't have to memorize all the cards. Several years on, we still buy the occasional pack and enjoy a battle once in a while. Over the years, as Pokemon has grown in popularity, I’ve noticed some interesting trends. Fewer card buyers seem to know how to play the game, and most people just trade cards. Really, they aren’t even trading cards. They are buying and watching the value increase on apps, and I suspect there is more buying than selling. This isn't the first Pokemon craze of course. The cards and Game Boy game were really popular back when I was a kid too. For those of you who have hung on to your cards from that era — that’s incredible — I don’t have the stomach and would have been a seller long ago.
It seems very similar to what is happening with bitcoin. At the start, programmers were interested in decentralized currency and public blockchains. These are fine things to think about. But just like Pokemon collectors who don’t know how to play the game, most bitcoin investors today don’t know much about blockchain technology. I was an Electrical and Computer Engineering student back in 2000-2005, and I knew people who enjoyed talking about security and authentication. I remember being awed myself the first time I heard about the prime number math behind authentication. I once watched a classmate typing what appeared to be a paragraph and asked what he was doing. Logging into his personal ftp server — never can be too concerned about security he said. This was in the days before Bitcoin, but my classmates were exactly the type of people who care about things like security, authentication, and anonymity. These days, it is just about the value going up — any views on decentralization are probably secondary.
Although I was an ECE student in the days before the Bitcoin bubble, it was just after the dot com crash, and there are aspects of that dot com bubble that seem very familiar in today’s world of $110k Bitcoin.
Back in 1999, any company with a dot com was worth a ton of money, until it wasn’t. Today, Pokémon is moving up, bitcoin is on its way up, gold, any company with crypto in its name. But what are they all built on? Is there anything holding this all together? Is there anything there, there? It will be interesting to find out.
AI is a bit different. I think there is something there. But, it is certainly getting caught up in all the hype.
I sometimes have to remind myself that Google wasn’t hardly a thing before the dot com bubble. It emerged from that froth and was built into the company we know and mostly love today. Obviously, AI will change everything, but how? My big question with AI is will it eventually be led by a company we know today? Or will it be some kid just starting out in some basement or garage. Can’t wait to see what happens.