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1/ Five years from now it will be widely recognized that the major financial players in the "cryptocurrency space" (mostly exchanges) made a strategic error in pursuing a horizontal business opportunity rather than a vertical one. A thread 👇

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Guy Swann

@TheGuySwann

May 16, 2019

Fallacy - The skills & expertise of running a digital exchange and the ability to see & understand major economic incentives are very different things. This is implied in his argument. Exchanges with long term economic alignment > exchanges with good operating skills.

Michael Dunworth

@MichaelDunwort1

May 16, 2019

Costs money to run an exchange. That’s why they list the junk. It’s more volatile, more volatile means more trading, more trading means more revenue.

Guy Swann

@TheGuySwann

May 16, 2019

Totally agree, but as

@real_vijay

was suggesting, that's a short term strategy that may mean exchanges have to gut half their operation and restructure when the junk no longer has a market. The exchanges that didn't bother wasting the resources could be far better positioned.

Replying to

It's not wasted resources if it's wildly profitable. You can have different strategies for short-term and long-term. Doing something now doesn't mean you have to do it forever. $1b cash in the bank gives you a lot of options.

1:06 AM · May 17, 2019Twitter Web App

Replying to

True, but it’s still a huge structure, cost, & alignment w/ altcoin market. Like early Google & Yahoo. Yahoo had way better search (& profits) bc they manually indexed, while G had crap algos. But G caught up, algos improved & they were properly aligned in the next internet boom

Guy Swann

@TheGuySwann

May 17, 2019

Yahoo had *huge* profit early on, while Google was struggling. But huge profits didnt outweigh the years of compounding improvements & proper alignment of Google. Obviously this might not turn out like that, but it’s an important lesson regardless.

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