Alex Krüger Profile picture
Jul 1, 2018 22 tweets 4 min read Twitter logo Read on Twitter
1/n. McKinsey on #Blockchain's strategic value.

- It doesn't have to be a disintermediator to generate value. This encourages permissioned commercial applications.
- It's short-term value will be predominantly in reducing cost.
- It's 3-5 years away from feasibility at scale.
2/n. Blockchain’s core advantages are decentralization, cryptographic security, transparency, and immutability. It allows information to be verified and value to be exchanged without having to rely on a third-party authority.
3/n. Five common blockchain myths.
4/n. Six use cases addressing two major needs: record keeping & transactions.
5/n. Benefits from reductions in transaction complexity and cost, as well as improvements in transparency and fraud controls can be captured by existing institutions. Thus the commercial model most likely to succeed in the short term is permissioned rather than public blockchain.
6/n. Blockchain might have the disruptive potential for new operating models, but its initial impact will be operational efficiencies. Cost can be taken out of existing processes by removing intermediaries or administrative effort of record keeping and transaction reconciliation.
7/n. Certain industries’ are inherently more suited to blockchain solutions, such as financial services, government, and healthcare.
8/n. Financial services’ core functions of verifying & transferring information/assets closely align with blockchain.

Blockchain solutions address:
-cross-border payments
-trade finance
-trade settlement
-regulatory reporting

90% of major banks are experimenting in blockchain.
9/n Governments’ record-keeping and verifying functions can be enabled by blockchain infrastructure to achieve large administrative savings. Public data is often siloed among agencies. More than 25 governments are actively running blockchain pilots supported by start-ups.
10/n. Healthcare. Blockchain-based healthcare records can not only facilitate increased administrative efficiency, but also give researchers access to the historical, non–patient-identifiable data sets crucial for medical research.
11/n. Smart contracts could give patients the ability to commercialize data access e.g. patients could charge pharmaceuticals to access their data in drug research. Blockchain also being combined with IoT sensors to ensure integrity of cold chain for drugs, blood & organs.
12/n. Over time, the value of blockchain will shift from cost reduction to enabling new business models. One of the most promising is the creation of a distributed, secure digital identity—for both consumer identity and the commercial know-your-customer process.
13/n. The strategic value of blockchain will only be realized if commercially viable solutions can be deployed at scale. Meaningful scale remains three to five years away for several key reasons.
14/n. Lack of common standards & clear regulations is a major limitation on blockchain applications’ ability to scale. Standards can be established with ease if there is a dominant player or government agency. e.g. governments could make blockchain land registries legal records.
15/n. Immaturity of blockchain technology increases switching costs. Organizations need trusted enterprise solutions as most cost benefits will not be realized until old systems are decommissioned. Few start-ups have the credibility & technology stability for deployment at scale.
16/n Blockchains' technical configurations are a series of design choices in which the levers on speed (size of block), security (consensus protocol), and storage (number of notaries) can be selected to make most use cases commercially viable.
17/n. Assets must be able to be digitized. Assets like equities, which are digitally recorded and transacted, can be simply managed end to end on a blockchain system or integrated through application programming interfaces (APIs) with existing systems.
18/n. Connecting physical goods to a blockchain requires technologies like IoT and biometrics. This connection can be a vulnerability as the physical item or IoT sensor can be tampered with. e.g. certifying chain of custody of commodities would require a tagging system like RFID.
19/n. Blockchain’s major advantage is the network effect. While benefits increase with size of the network, so does the coordination complexity. Natural competitors need to cooperate, and resolving this coopetition paradox is the hardest element in the path to adoption at scale.
20/n. For example, a blockchain solution for digital media, licenses, and royalty payments would require a massive amount of coordination across the various producers and consumers of digital content.
21/n. The issue is agreeing on the governance decisions around how the system, data, and investment will be managed. Overcoming this issue often requires a sponsor, such as a regulator or industry body, to take the lead.
22/22. McKinsey is the world's #1 management consulting firm. This is the source:…. It has some other jewels and interactive charts.

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More from @krugermacro

Oct 4, 2018
Lot's of talk about Tether & Bitfinex, some even mentioning "exit scam". Crypto pairs in Bitfinex are trading at 0.75%-1% premium over spot exchanges. However, same can be observed in Tether exchanges. e.g. prices in Binance same as in Bitfinex =>this is not a Bitfinex issue.
A couple of red flags aside, I don't think there is reason to be particularly concerned. Selling of Tether for other asset-backed stable coins is to be expected.
Now anyone operating in an exchange exposed to Tether or one that performs no KYC is always exposed to some sort of tail risk. Only way around that is moving to crypto-fiat regulated exchanges, which have higher operational costs (KYC is expensive) and charge higher trading fees.
Read 5 tweets
Oct 3, 2018
Narrative: "My top priority has always been our social mission of connecting people and bringing the world together" ~ Zuck.

Reality: "People ... I don't know why. They "trust me". Dumb fucks." ~ Zuck.

His top priority is using people to sell targeted ads. #deletefacebook
It all started with Facebook's Timeline, an intrusive interface designed to push ads. Other things followed: recording phone logs, hacks, 3rd party apps snooping, discriminating users, nudging for users to provide more and more and more information, etc.
Read 4 tweets
Oct 2, 2018
Brazil stocks +5% today in USD terms, strictly on political news. Chart locks great for longs. 1st round Presidential elections Oct/7. The two most voted candidates go onto a 2nd round on Oct/28.
Chart aside, what one trades is the elections: Bolsonaro (right-wing populist wildcard, similar to Trump, initially despised by markets, now seen positively as much better than the alternative) vs. Haddad (left-wing candidate, Lula's party).…
Two things behind today's rally.

- new info on the corruption scandal involving Haddad's party:…?

- more importantly: Ibope polls showing a sharp improvement in Bolsonaro's odds.
Read 4 tweets
Sep 29, 2018
1/ Key factors for global markets

- Fed tightening: rising rates, balance sheet reduction, USD funding squeeze. Fed expects three more hikes in 2019.
- US economy overheating. Fiscal cuts in action, US profit margins at all time highs, unemployment at lowest level since 2000.
- US treasury curve inverting, pointing towards incoming recession.
- Oil spiking in response to demand shocks and low spare capacity could lead to increased inflation and tightening.
- Ballooned public and corporate debt levels.
- Trade wars: US tariffs would result in China's GDP dropping 75bps. Worldwide spillover effects.
- To compensate, China looking to reflate domestic economy via spending & monetary easing.
- EM at risk from Fed tightening and strong USD; are these already priced in?
Read 5 tweets
Sep 29, 2018
Chart shares one of my signals which I call the Volume Thrust. It's a high volume/volatility breakouts signal. Can be applied to multiple time frames i.e. five minute charts or daily charts. Sharing it to illustrate price action concepts.
Understanding this is useful for investors as well who want to enter positions only with the trend. It's also helpful to any trader who is fearful of buying a top. Buying a top or selling a bottom sometimes represents good decision making.
First, when there is a high volume push in one direction, a trader generally wants to go in the direction of the push. Second, when push fails and price reverses in full beyond origin point, that's a trap, trader wants to reverse position (or at least exit prior position if any).
Read 11 tweets
Sep 27, 2018
This could happen to crypto exchanges offering trading of security tokens and security token derivatives. If $XRP were to be defined as a security it would jeopardize exchanges such as Bitmex. Binance is at risk regardless. Lots of security tokens there.
Sounds familiar?

Just yesterday I was reading about how 1broker had started offering CFDs on cannabis stocks, offering traders to open an account with an email address, fund it with bitcoin, and hit it with 50x leverage.
Read 8 tweets

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