Tom Shaughnessy, the founder of the institutional crypto research firm 51Percent, gave his views to high-profile podcaster Anthony Pompliano in January 2019.
Mr Shaughnessy made it clear the information in the podcast was not intended as financial advice, but was more a review of the merits of the technologies and the development teams behind them.
“Ethereum is an awesome platform in my opinion,” Mr Shaughnessy said.
“One of the things I loved about Ethereum was (founder) Vitalik (Buterin). The guy was just such a forward thinker, he put out great research … and he was very receptive to the problems.
“I love that we’re actually seeing applications being built on it and we’re actually seeing use cases.
“Whether that being Maker DAO with the stable coin being built on it, whether that be 0x with three layers being built on it for decentralised exchanges, we’re just seeing … the most vibrant and strongest developer community that we have in the space.”
Mr Shaughnessy says the upcoming scaling solution called ‘Serenity’ will bring new changes that will “enable a tonne of new use cases,” but that it’s important the developers actually execute.
“They’re rebuilding the entire foundation of the protocol … they need to make sure this works,” he said.
“I’m confident that they can because they have the smartest developers in the room in my opinion, but we’re going to have to see.”
Mr Shaughnessy says he has nothing against Bitcoin, but does not believe it will replace the US dollar within the next five years.
“I don’t think fiat’s going anywhere any time soon,” he said.
“But do I think Bitcoin solves a zillion problems? Absolutely,” he said.
“It has a great monetary policy. It’s fixed. We don’t know how much money the Federal Reserve’s printing. We know exactly what’s going on with Bitcoin. We know the supply schedule. We know who owns it. It’s global.
“For people that are in horrible countries like Venezuela, it solves a zillion problems for them.
“There’s nothing wrong with Bitcoin.”
Mr Shaughnessy knows he won’t be popular with his views on Ripple’s XRP.
“I wrote a deep dive on XRP (and) am I invested in XRP? No. No way,” he said.
“I have a fundamental problem with XRP. It’s owned by retail customers who have no use case for the currency.
“XRP is supposed be used by banks, multinationals for remittances, global transfers and payments. There’s no use case for retail investors to own XRP so I don’t understand the bull case for them.”
“There’s also numerous problems with it. The first 30,000 blocks of the chain are missing.
“Ripple make all of their money selling the currency. Ripple controls 60 per cent of the nodes and they control the verified list which decides who is a node.
“I’m not saying Ripple or XRP is bad, they actually have a use case. Global payments, that’s a use case. But are the better alternatives out there, which are truly crypto? Yes.”
“I’m long Ripple, short XRP.”
“There’s a lot of people that will agree with me on that, and that’s fine. But my job is to have an opinion and to share that because I would be remiss if I didn’t share my real opinion.”
“Wouldn’t touch it,” Mr Shaughnessy said.
“You will always have the transparency issue. You will always have a problem of does Tether have x amounts of US dollars in their bank, or not?
“That will never be transparently solved in my opinion … ever.
“We’re always going to have to wait to quarterly statements. And what if they don’t share it?”
Mr Shaughnessy admits privacy coins is a “tough area to get your head around” but believes he has picked a winner.
“(The privacy coin space) is dominated by two coins: Monero and ZCash,” he said.
“Each has its problems.
“Monero is obviously less technically secure, I think. But the point is, their entire base of transactions is private on the network.
“ZCash has visible transactions and shielded transactions and the shielded transactions only make up around 15 per cent of transactions currently. So the base is smaller today.
“But the point is, we’re not investing for today. We’re investing for tomorrow.
“We want the most secure coin, and that’s ZCash, in my opinion.”
Mr Pompliano appeared surprised when Mr Shaughnessy said he believes the most important company in crypto is ConsenSys.
“Hands down,” he said.
“(They are the ) smartest guys in every room.”
“1000 of the smartest people building 50 spokes that people don’t even understand how valuable they are.
“They’re building all the back end infrastructure. They’re building all the new use cases.” M
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