SIMON BROWN: I’m chatting with Sean Saunders, founder of Revix, and Ciaran Ryan, a Moneyweb contributor, focusing on the crypto world. Sean, if I could kick off with you – back in the day crypto was all about Bitcoin and there were some other little Dogecoins and the like. But really Bitcoin was where it was at.
Fast forward to today and the crypto world is fundamentally changing. Bitcoin is still the granddaddy in the world, but in the room there are literally dozens of new up-and-coming coins. And many of them are establishing themselves really fast in the crypto space.
SEAN SANDERS: Yes, that’s really interesting. Firstly, good morning. Thanks for having me today. But it’s really interesting to sort of see the emergence of cryptocurrencies that aren’t only focused on payments. We’ve spoken about cryptocurrencies that maybe should be called crypto assets, because they do a lot more than just act as currencies. We are seeing the likes of Cardano, Polkadot, Uniswap, the likes of Solana even, over the last while, that have really grown in value as programmable blockchains, blockchains that do a lot more than just transfer value.
It’s been really interesting to see and the crypto space has now gone well beyond just moving money around and moving into sort of this new ‘Web version 3.0’, which is … like the third industrial revolution, taking it into the next step.
SIMON BROWN: Ciaran, you write on this, you are doing podcasts on this, you’re working on a fair bunch. How do you decide which are the up-and-coming coins that are worth covering? Is it as they start to move, is it market capital? Is it sort of the base technology underlying it?
CIARAN RYAN: It’s a little bit of all of those that you’ve mentioned. But one of the things to keep an eye on is how they are moving up the market-cap rankings.
Solana is one of these astonishing success stories that came into being only in the last few years. I wrote an article on it a week ago.
Its market cap was $34 billion a week ago, and yesterday it was $57 billion. This thing has just exploded. If you think of the kind of value creation that a coin like that can accrete, it’s quite astonishing. Bear in mind over the last year alone it has gone up 5 600%. This is why people are paying a lot more attention to cryptos.
The trick is how you spot these things early? Well, where do they start joining the market cap rankings? Solana is now ranked number six behind Bitcoin, Ethereum and a few others. But to go from nowhere in a period of a year to number six with a market cap of $57 billion is quite a story.
SIMON BROWN: Back in the day, 10 years ago, less of a story. Doge was there for a point, but it’s changed.
Sean, Solana is relatively new – I think three-and-a-half years ago it initially was raising seed. It really is about blockchain and what people can do on top of it. I was digging through the Solana website. There are in excess of 300 different teams who are working different payments and all sorts onto that Solana blockchain. That is the key story here.
SEAN SANDERS: Yes, one hundred percent. I think one thing that’s interesting to know (is) maybe this is taking a bit of a step back because people hear the name Solana and they go, ‘Is this a new pop star or what?’ because crypto is weird like that. You get all these new emerging cryptocurrencies that come out of nowhere because this space is so quickly evolving.
If you look at Solana, this is a programmable blockchain, which means that you have a blockchain infrastructure that applications can be built on top of.
If you think about an analogy, look at the internet. The internet has allowed you to have email, video sharing, file sharing in general, and all these other features that we take for granted today.
Now, if you’re looking at blockchains, you have Bitcoin, which is sort of the first-generation cryptocurrency that’s a nom-programmable blockchain, and it’s used for transferring value from one party to another. And then all of a sudden you have these programmable blockchains like Ethereum, like Solana, like Polkadot, and you’re able to do a whole bunch of really interesting things on top of them, using these little contracts, or these little programmes called ‘smart contracts’. A smart contract is just a bit of jargon in the crypto space, but really it’s self-executing code.
So you could have an example where you say, if I want to have a certain amount of money transferred to my landlord every single month, no longer do you have to set up a debit order with your bank. All of a sudden you can actually bake that in through a smart contract into the money itself. So the money actually then decides, okay, once a month the person that owns this money is sending this to the other party. If you think about perhaps a car dealership, you can automate the payment to a particular party and all the rest.
This is where things get really interesting because money evolves, the way that value and information is transferred around the world evolves.
It’s not relying on centralised parties any more, it is actually relying on the network in a decentralised more peer-to-peer way. That’s really the crux of what all the crypto hype and excitement is going for.
SIMON BROWN: Ciaran, that’s the key thing. Back in the day, crypto was all about ‘this is the new currency’. I don’t think El Salvador’s trying the experiment with Bitcoin. Cuba’s talking about it and we’re seeing some sort of dollar-backed coins and the like. But crypto has as a concept become about that blockchain and what can be done within and on top of blockchains.
CIARAN RYAN: It’s going to change everything. I think Sean used the term ‘Web 3.0’, and people are still trying to wrap their heads around this and what it actually means. When we say it’s going to change everything, it’s going to mean the end, perhaps, of a huge amount of work that is currently done by accountants. For example, when you do an audit, you’re doing a sample of maybe 1% of the transactions in a firm.
Well, with blockchain you can do a 100% audit, so you can be absolutely 100% assured that the transactions or the financial statements you’re seeing are accurate.
Blockchain is going to do away with a lot of work that lawyers are doing – because of these smart contracts that we’ve just been talking about. They’re self-executing, there’s no intermediary. You don’t need a court or a judge or a lawyer to decide when these things are actionable because they are self-executing. And you’ve got so many other types of financial transactions which are not going to take place on the blockchain, and smart contracts are going to take over the world.
This thing is going to swarm us. In the next two years, three years, you’re going to see all sorts of new products, insurance products, financial products. So the race is on for who is going to be the main player here. You’ve got Cardano, you’ve got a Polkadot, you’ve got Ethereum, you’ve got Solana and you’ve got some others that are all contesting for dominance in this space.
The reason Solana has been exploding as a cryptocurrency is you have this blockchain which is a network that is able to transact, but you also have a currency.
Solana itself is a currency and you have to purchase the Solana currency in order to transact on that blockchain. The reason it’s been so successful is because of the volume of transactions that it can handle – it can do about 65 000 per second…. Bitcoin, by the way, does only seven. Ethereum does about 30. They’re all scaling up, they’ve all got problems, they’ve got choke points, and they’re all trying to scale up. If you’re going to have a system that controls – not necessarily controls, but is able to handle – the huge volumes of transactions that are needed, you need to be able to do something of the order of what Solana can do.
SIMON BROWN: Yes – 65 000 a second. That is totally proper. Sean, coming back to you, you’ve had Solana in one of your bundles, so I could get exposure to it as a basket. But Revix is now launching it – is it today – where I will be able to buy the crypto as a standalone?
SEAN SANDERS: Yes.
We’ve launched Solana due to popular demand as a standalone cryptocurrency on the platform.
What’s really cool about what we’re doing – and I’ll use the word ‘cool’, because we are in the crypto space and we can be candid and open. We are offering Solana purchases completely free on the platform. So you can go on, you can put whatever amount of money you want to put in. That’s from R150 through to whatever you want, and you don’t pay any fees when you purchase Solana. It’s available on Revix from this morning, and we’ve already seen a pretty big uptake in this. I mean, this is sort of the hottest cryptocurrency of this year.
As Ciaran mentioned, the transaction throughput of this blockchain is really impressive. The potential further increase in the transaction throughput is really impressive. The cost of operating on the blockchain is, I guess, really attractive at this point in time, certainly relative to Ethereum and other blockchains.
I think the most important thing, something we’ve been talking about for a very long period of time, is to say, well, you’ve got a lot of speculation in this space. Where is the development, where is the use case behind these different cryptos and blockchains? Well, here you’ve got over 400 products and projects working on top of Solana. This is a cryptocurrency that in all earnest really hasn’t actually been around for more than 12 months. Sure, they launched a blockchain and all the rest, but it was still in its infancy. So I think there’s a lot of potential upside.
As we always say, crypto is high risk, this is a super high-risk category – don’t ever invest more than you can afford to lose. Do your homework…start small.
We cannot emphasise this enough. This is a space, especially with a cryptocurrency that’s gone up over 5 500% over the last 12 months. You do need to look at this and say, okay, well, if I’m going to allocate some money to it, let me do it responsibly. This is not a casino. This is an emerging asset class, and you can put some money in; it can pull back 10%, 20%, 30%. That’s sort of the risk that you take for that upside opportunity. At Revix we do promote that. We want to be long-term greedy when it comes to dealing with clients.
SIMON BROWN: Okay, I like that – ‘long-term greedy’. This crypto space is risky, but let’s also be clear, there has been money made here, to Ciaran ‘s point – if there’s stuff built on top. I was reading about the hackathon that Solana did, and I think of the first hackathon three years ago; something like 10 people arrived and now this one in 2020 had 3 500. There’s tons happening there.
We’ll leave it there. Sean Sanders, founder of Revix, Ciaran Ryan Moneyweb contributor, as Solana launches on Revix. I appreciate the morning time, gentlemen.