Disrupting markets and empowering the disenfranchised: Why one investor thinks cryptocurrency will change the world

A cryptocurrency investor who moved to the Bahamas on the strength of his investments spoke to me about why he thinks cryptocurrency will change the world.

In my work as a journalist, my goal is to write the best possible article for my audience, and sometimes that means leaving out ideas and quotes that don’t fit the narrative I’m crafting. I call that cut content the graveyard, and in some cases, there’s enough content in the graveyard to write another article.

I recently wrote an article called “Beyond bitcoin: How cryptocurrency is changing the world” for CBC. I wrote the following article with content I cut from the original article. Enjoy!

Ethan Erkiletian has been living in the Bahamas for about half a year. “It was definitely my investments that allowed me to do that, cryptocurrency being the primary driver,” he said.

He works as a cryptocurrency consultant, but he stressed more than once during our conversation that he is not a financial adviser. He also declined to answer my question about how much of his portfolio is in cryptocurrency, and tried not to mention the names of any particular coins -- though he did name Equibit.

Disrupting markets

Based out of Toronto, Equibit aims to disrupt stock markets like the NASDAQ, NYSE, and TSX.

“Equibit is working on a really neat use-case for blockchains where the ownership of stocks is settled on a blockchain rather than through intermediary agents we use today,” Erkelitian said. 

There’s a cost with tracing stocks, and Equibit is working on automating that, which would reduce the costs and improve the accuracy of the reporting. 

ICOs are 'the greatest threat to market confidence in cryptocurrency'

Another market-disrupting force are initial coin offerings. Erkelitian says he’s optimistic about the possibilities, but has some concerns.

“While I think ICOs are a legitimate method for bringing new and disruptive projects to market, I also think that people may invest in these things without doing a great deal of research. ICOs are presently in a position where they can command millions of dollars of investment from people who look for nothing more than a word from someone they believe to be trustworthy, even if that person is ill-suited to offer financial advice.

“I adore the ICO concept, but the ICO space is perhaps the greatest threat to market confidence in cryptocurrency that exists today.”

(For a really great rundown on tokens and the potential power of ICOs, check out this article by Balaji S. Srinivasan: "Thoughts on Tokens: Tokens are early today, but will transform technology tomorrow.")

Empowering the disenfranchised

It’s this disruptive nature of cryptocurrency that excites him the most.

“Those decentralized systems that can’t be shut down are immensely beneficial to those people who need that financial sovereignty in their life.”

Cryptocurrencies are more mobile than fiat. There are hurdles to sending money around the world, and the technology has the potential to change that.

“That paper dollar that we use, it’s very difficult to send that paper dollar halfway around the world…. Blockchains open our communication of value in a very, very big way; they make it much more accessible than the systems we’re typically familiar with.”

Not only does the mobility and decentralized nature make it easier to move wealth around the world, it can also solve problems when fiat fails.

“In Zimbabwe today, the bitcoin price is typically $2,000 or $3,000 above global market and the reason is because the people there need it to be able to move wealth around.”

'The space shows a credible foundation for growth'

The price of bitcoin can change dramatically, as we’ve all seen this year. When I spoke to Erkelitian at the beginning of December, it was hitting record highs and record hype. 

But Erkelitian wasn’t impressed. 

“For people who have been around in this space, it’s really nothing new; we’ve seen these cycles over and over again.”

Still, he said the space is legitimately growing. 

“More infrastructure is being built day to day, new projects are coming on line, new blockchains are being researched and developed actively, scaling solutions are much more prominently focused on by developers today than just a few years ago. All in all, the space shows a credible foundation for growth, and though I think we’ll probably see a dramatic market shock in the future -- when you have such overheated growth, it’s almost inevitable -- even though that’s the case, I think longer term this growth is just the beginning.”