It was an exciting week for our tech expert here at Legacy Research, Jeff Brown.
Jeff is best known for his research and recommendations on 5G, self-driving cars, gene editing, and cloud computing.
But on Wednesday, he hosted his first-ever crypto livestream event.
He showed the more than 17,000 of your fellow readers who showed up for his livestream how they could multiply their wealth many times over. It’s down to a new way of investing in the booming cryptocurrency market.
Jeff’s new advisory, Unchained Profits, identifies the most promising niche investments in the blockchain tech underpinning cryptos.
He also revealed how this new tech is disrupting some of the biggest tech monopolies on the planet – Google (GOOG), Facebook (FB), and Twitter (TWTR).
If you missed it… there’s still time for you to catch the free replay of Jeff’s event.
Later in today’s dispatch, Jeff teams up with another blockchain bull at Legacy, Teeka Tiwari, to answer a question that’s been at the top of your fellow readers’ minds: Will the next generation of supercomputers – aka quantum computers – allow hackers to hijack the blockchain?
First, we return to one of our favorite positive asymmetric investments – stock warrants.
A positive asymmetric investment is one where the upside potential greatly outweighs the downside risk.
These are the investments you want in your portfolio.
As Casey Research founder Doug Casey says, in investing, “Symmetry is for suckers.” Here’s more from Doug…
An asymmetric bet is one where the potential upside of a position greatly exceeds its potential downside. If you risk $1 for the chance of making $20, you’re making an asymmetric bet – especially if the odds are very good you could be right.
Amateur investors too often risk 100% of their money in the pursuit of a 10% return. These are horrible odds. But the financially and statistically illiterate take them. You might do better in a casino or most sports betting. It’s one of the key reasons most people struggle in the market.
That’s what makes stock warrants so great…
You can use them to pick up exposure to stock moves for pennies on the dollar. That makes them a great way to get in on the upside of the continuing bull market… while strictly limiting your downside risk. (Find out more here.)
Colleagues Dave Forest and John Pangere have been recommending warrants at our Strategic Investor and Strategic Trader advisories for two years now.
So far, they’ve given their readers the chance to close out wins of 393%… 2,805%… and 4,942%.
Now, with market volatility picking up, one reader is wondering when to sell…
Reader question: Thank you for your wonderful advisories. I’m very happy that you’ve showed us about warrants.
Should we wait for guidance on when to sell? Will you send your subscribers an alert? Or should I just wait for the highest price and use my judgment? I’m anxious to know what to do and when.
– Suzanne M.
John’s response: Hi, Suzanne. We’re glad you’re enjoying our warrant recommendations.
I can’t give you personal advice on when to sell. But Dave and I will always inform you when to sell via sell alerts to our whole group of subscribers.
When we deal with warrants, we often recommend taking some money off the table early on. That’s because warrants tend to move much faster than stocks. If a stock moves up 20%, its warrant might surge 100%.
When this happens, we usually recommend our subscribers take a “Casey Free Ride.” In other words, we recommend everyone sell enough to recover their initial investment.
What’s left is risk-free. You have none of your original capital at risk. So your remaining position is pure profit.
It’s important to remember that we won’t always profit from our warrant trades. We’ll take some losses along the way. That’s normal with positive asymmetric bets.
Warrants have built-in expiration dates. So in some cases, we run out of time to exercise them. We may also exit a position because of a downturn in the industry or a problem with the company that issued the warrants.
But when our warrant trades work out, the gains more than make up for any losses along the way. We’ve given readers the chance to make 50x their money on Purple Innovation (PRPL) warrants and 29x in Blink Charging (BLNK) warrants. We’ve also recommended numerous triple-digit winners and “Free Rides.”
Whatever happens with each trade, rest assured. We will always provide you with guidance.
You can find out more about how to access Dave and John’s warrant recommendations here.
Switching gears, a reader wants to know if the next generation of supercomputers will be able to crack the encryption of blockchain tech.
For insight, I reached out to two of our blockchain and crypto experts, Teeka Tiwari and Jeff Brown.
On the threat of quantum computers, they agree – there’s no need to lose any sleep…
Reader question: Could you share your thoughts on the impact of quantum computing on crypto? I understand Google may be only a few years away from functional quantum computing. Wouldn’t this render private keys useless?
– Kathleen A.
Teeka’s response: Thanks for your message, Kathleen.
Quantum computing allows for simultaneous calculations. By contrast, digital computers are linear. They can process only one calculation at once.
When multiple calculations can happen at once, you obviously can do many more calculations. If you can do more calculations, you have a much more powerful computer.
So the fear is: What happens when quantum computers get powerful enough they can do all the calculations necessary to break current encryption?
This is a valid concern. And it’s a huge one.
But what’s odd is that the group most worried about the quantum threat is the bitcoin and blockchain community. I’ve gotten endless emails asking, “Will quantum computing break the blockchain?”
Let me be very clear with you: Once quantum computers get powerful enough to break blockchain encryption – and the best guess is that’s many years away – they will be able to break any encryption.
That includes the encryption used by the Federal Reserve, any brokerage firm, the Depository Trust Company (which records who owns what stocks), and online databases that hold real estate title deeds.
They ALL use encryption that quantum computers could, someday, break in an instant.
So I’m more concerned about the impact of quantum computing on traditional assets. There’s much more money in traditional assets than there is in cryptocurrency.
But let’s say quantum computing has gotten to the point where it can break encryption. If you’re a bad actor, do you go after the crypto market, where value depends on unassailable security?
Well, if you break unassailable security, you collapse the value of the asset. It’s not a smart use of your digital “skeleton key.” As soon as you break the lock, the assets you’re after will lose their value. It’s like stealing a piece of treasure… and as soon as you walk out of the treasure chamber, it turns to sand.
But if you use your skeleton key to hack into the Federal Reserve, steal $100 billion, transfer it someplace else, and convert it into cash… well, you can run away with that money. It’s not going to dissolve into nothing just because you violated the security of the Federal Reserve.
The Fed has already been hacked this way. In 2016, hackers stole something like $81 million from the central bank of Bangladesh via the New York Fed. But you didn’t see the U.S. dollar crash in value.
It’s important to be concerned about quantum computing. But again, you should be more worried about its threat to traditional financial assets than to crypto.
Some blockchain developers are already taking steps to create quantum-resistant algorithms in their blockchains. And as technology improves, security improves, too.
Do you think the custodians of global capital are going to stand by and let quantum computing get to the point where it can make their encryption worthless?
No. They’re going to create quantum-resistant encryption. This is why, in the pantheon of concerns you can freak out about and lose sleep over, you should shift this one all the way over to, “What happens if I walk out of my house tomorrow and a meteor kills me?” level.
It’s possible. But it’s highly unlikely. I think you’ve got more of a chance of an IRS audit than you do of getting hit with a meteor.
Jeff’s response: Hi, Kathleen. Thanks for writing in.
This is a topic that has worried people ever since Google achieved quantum supremacy back in September 2019.
That’s the point at which a quantum computer can outperform the most powerful classical supercomputer on earth.
Google ran tests on its 53-qubit quantum computer. Researchers gave the quantum computer a task that would take the world’s most powerful non-quantum computer, Summit, 10,000 years to complete.
The quantum computer solved it in 200 seconds…
So your concern about quantum computing is legitimate.
Blockchains are cryptographically secured against digital threats. But the worry is that a quantum computer could hack the cryptography that secures blockchains.
For some background, a 53-qubit quantum computer such as Google’s has the potential to crack our current standard, 256-bit encryption, in as little as a couple of days.
The bitcoin blockchain is designed to be a decentralized, immutable ledger. In other words, it was designed to be immune to digital hacking attempts.
But could a 256-qubit quantum computer “crack” bitcoin?
Yes, assuming the bitcoin blockchain is in its current state. A quantum computer could pose a threat to most blockchain technology… and pretty much any form of encryption we have today.
But there’s an important thing to remember about blockchain technology. It’s software. And like all software, it can be upgraded.
There are already blockchain tech companies working on solutions to make blockchains quantum-resistant or quantum-proof.
There’s even one blockchain project called Quantum Resistant Ledger. It’s developed a blockchain from the ground up to be quantum-resistant.
That’s all for this week’s mailbag.
If you’d like to hear more about what blockchains can do… and how you can profit… you can watch the free replay of Jeff’s Click for Crypto event.
Jeff spent months preparing for it. And it’s a master class on the opportunity ahead and how to take advantage.
Remember, if you have a question for anyone on the Legacy team, be sure to send it to [email protected].
Have a great weekend.
Regards,
 |
Chris Lowe
August 27, 2021
Dublin, Ireland