Letters to Jack Dorsey - Reflecting on Investments

Hi Jack,

Today I would like to share with you choices in investment I have made in 2019 and thoughts going into 2020. Of course, none of what I say is financial advice to you or anybody else. In fact, I find people investing based on other people's opinion reckless and irresponsible. I have done the mistakes of trusting other people's judgment in investing and can't remember a time it worked out. More often when it is a personal decision things work out in a more expected and positive manner.

My portfolio in 2019 consisted of mainly bitcoin, litecoin, and steem. Before I invested in bitcoin I was invested in stocks. Among them, I had twitter stocks. This was back in 2016. To be honest, I didn't even know who you were before I had twitter stocks. As a responsible investor, I had to do some research on Twitter, that is when I came across your name as a CEO. I should admit, there was a lot of negative talk going on about you. People calling you a part-time CEO and asking to quit as a CEO of Twitter because you were running Twitter and Square at the same time. That didn't bother me at all. I thought it was actually cool. You must be an extraordinary leader if you were entrusted to run both large companies at the same time. Recently, I saw some kind of talks still going on about you. While I am not invested in Twitter anymore, I should say you have my full confidence and support. I think they are lucky to have you as a CEO.

In early 2017 I had to liquidate my portfolio in the stock market due to unexpected expenses. While I didn't lose any money on Twitter, looking today I can see it would have doubled or even tripled my original investment. Well done Jack! So haters can keep hating, Twitter prices show you have done a good job as a CEO. After getting out of the stock market and taking care of important matters, I decided to invest in bitcoin with leftover funds. I find bitcoin to be an interesting investment. The idea behind it and Satoshi's vision is appealing for many. This year of 2019 certainly was an exciting year for bitcoin. We have seen things that had not happened before. The president of the United States, the Congress, the Fed were all talking about bitcoin. Especially it was interesting to see the Fed chairman mentioning bitcoin. Of course, we also saw governments around the world paying closer attention to bitcoin and crypto space in general, and taking various actions. These overall, in my opinion, validate bitcoin, that it is real, it is here to stay, and nobody can really do anything about it. As Warren Buffet said - "invest in assets that you see still be around in the future". I know Buffet doesn't like bitcoin as an investment. But that because it doesn't make sense to him. For me, it makes perfect sense.

Even if we saw some bullish run for bitcoin that started in April, it didn't perform as many predicted. Some expected it to break its all-time high. What I see 2019 did for bitcoin was is more of a recovery from the bearish year of 2018, and restoration of confidence. Now that confidence is restored, I can see a bright 2020.

I am also invested in litecoin. The comparison I make when it comes to litecoin is how Samsung dominated the smartphone market by replicating Apple and following the lead. I am not accusing Samsung of copying iPhones, but their business strategy was brilliant in taking market share during that heated competition among multiple players in the smartphone revolution era. Let me explain.

So Apple changed the phone market with the introduction of their first iPhones. Companies like Microsoft laughed at them. Leaders in the communications markets like Nokia were slow to adapt to the change, although Nokia came up with the first smartphones. They just could not fully grasp the power of the capacitive touch screens and the power of opening up the app marketplace to independent developers. When Nokia realized keyboards on phones are history and future is touch, they still made a mistake. They went with resistive touch technology instead of capacitive. I think that made a big difference in the products. So Nokia lost the battle. I don't even know what blackberry was thinking about. Probably the worst decisions were done by Blackberry. They had all the business space covered with their phone, they just couldn't innovate fast enough.

Of course, later Microsoft wakes up and realizes touch screen smartphones are the reality and the future. So they try to make their own Mobile Windows in a rush, which totally didn't attract anybody. Even Microsoft employees would rather use iPhones. As a last, yet big move Microsoft buys Nokia and powers Nokia phones with a better version of mobile Windows OS. Spend a huge amount of money on advertising Nokia Lumias everywhere. Offer phones on discounts. Those phones looked good. They were too late to the market. People already got used to iOS and Android phones. So both giants in the tech space failed.

On the other hand, Samsung immediately understood where the future was heading, and they shared the vision Apple was offering. Utilizing free Android software, Samsung emerged as the dominant player in the market and won over many customers globally. Especially their Galaxy line was a huge success. So, to me, bitcoin is an iPhone, and litecoin is a Galaxy phone. I like both. Please don't hate if you are Samsung/Android user. As an investment, I think litecoin will follow bitcoin. At times the may deviate, but in the long run they pull each other.

My last investment, and maybe the favorite one is Steem. This is a combination of emotional and rational investment. Having been on Steem for two and a half years, my investment in Steem is biased. If you look at the chart it looks like a toxic asset. Just keeps going down. However, when I see people working hard on Steem and people continue using it, new exciting developments happening I can't help myself by root for Steem and have a stake in the game.

I have told you a lot about Steem in my previous letters already. By now, I hope you have a better understanding of the vision of Steem and what it has to offer. Steem has a unique value proposition, it offers an alternative to the traditional social media, and envisions the future of decentralized social networks based on the blockchain technologies. Steem is a pioneer in this space. Many have attempted to come up with different solutions, and still trying. Nobody has been able to replicate what Steem does yet. Similar to bitcoin Steem had an interesting year as well.

It is good to see the leaders in the social networks space recognize the need for the blockchain-based tech. Mark Zuckerburg announced his Libra project. Not even close to what Steem does. When I first joined Steem, I knew many would attempt to beat Steem in this space. If Facebook wanted they easily can. They have armies of developers and a great number of resources. But one thing will keep big players from going all-in is the profits they make. I don't think they would give up all that easily. Moreover, just having resources may not be enough if there is a lack of vision, idea, and passion for decentralized networks based on blockchain tech. As I explained above, Microsoft spent an enormous amount of money to catch up in the smartphone market, they still failed. Because they lacked the vision and passion for what they were doing. They were driven on missing out on market share and profits that come with it. However, when they have the passion they rock.

Similarly, Microsoft first laughed at iPads when they were released. Even though Microsoft was the first who came up with a tablet idea and category for personal computing. It didn't take off, so they scrapped the project. Even before iPhones and iPads, Microsoft created a touchscreen device with a brand Surface. No, I am not talking about the Surface tablet/laptop device. It was a big coffee table size machine with a large touchscreen. It was a great innovation. But the price was high and wasn't designed for personal use. They targetted businesses. So when they decided to jump into the personal tablet competition, they already had the R/D done. Everything was in place, including the branding - "Surface". They turned the coffee table computer into a tablet with full Windows OS functionality. Now they have the market share, Surface is a thing and not going anywhere. Why? Because they had the passion and the vision for the device. It wasn't only about the money.

Back to Steem. As I mentioned in previous letters, the co-founder of Steem Dan Larimer left Steemit Inc and created EOS. Very successful endeavor. Well done Dan! Dan said at one point that he was going to create Steemit 2.0. This year he finally unveiled his vision and a product for Steemit 2.0. They threw a big event that reminded of Apple product unveiling events. Invited reporters, CEOs of various companies including Coinbase representation, etc. So huge hype around this event. Dan announced a new social media platform Voice. It looked cool. The problem was that it wasn't ready. All that hype, but the product wasn't ready. The idea of it wasn't even close to what Steem does. I don't even know if they launched it yet. It has been a while now.

Another attempt in creating blockchain-based social media came from Kim Dotcom. Recently he announced that he is building social media with a focus on privacy called k.im. Hmmm. I like the idea, I like the attempt. But did he really have to name it after himself? So much hubris. :) Well, that doesn't seem to be available yet either.

Narrative.org looked like a promising project too, sadly they are shutting down. I never got a chance to use it. Another project tatatu comes to mind. I think initially they raised a good amount of money, but then changed how it works. I am not quite sure if they utilize blockchain. They also had an interesting approach regarding how to reward users. Still not quite close to what Steem offers.

Jack, you yourself expressed interest in decentralized standards for Twitter. I hope @bluesky becomes a huge success for better social media, more decentralization that average users can benefit from. Or you could just check Steem out and save some time and money. :)

Seeing growing interest and demand for blockchain-based decentralized social media in 2019 I am optimistic about Steem and its vision. SMTs and Communities being prepared for release in 2020 makes my investment in Steem even more attractive.

In conclusion, my portfolio of Bitcoin, Litecoin, and Steem is in good shape and ready for the new decade.

Have a wonderful New Year Jack!

GG

Read the previous letters:

1. Letter to Jack Dorsey - Decentralized
2. Letters to Jack Dorsey - Six degrees of separation
3. Letters to Jack Dorsey - Steem Torch
4. Letters to Jack Dorsey - Beauty of the Steem Wallet
5. Letters to Jack Dorsey - Gift Economy