The Startling New Revolution in Money

Alexander Green
by Alexander Green, Chief Investment Strategist, The Oxford Club

Money is about to undergo the most massive change since the advent of banks in Florence in the late 1400s.

A new innovation is altering the global economy, the world financial system, everyday payment processing, even how you will eventually buy and sell.

This revolution will create thousands of jobs... and render millions more obsolete. It will slash trillions in financial fees, offer exciting new possibilities for billions of people around the world without bank accounts, and bring about a radically new decentralized system for making transactions. It is destined to alter your finances - making them more private and more secure.

And, of course, it will create enormous investment opportunities.

It’s all part of The New Golden Age for Investors I’ve been talking about lately. Yet most investors still don’t understand what’s happening - or what it means...

I think you’ll agree that money is indispensible to modern life. It’s how we measure what we earn, what we save, what we buy and how much we have.

Historically, money has been a store of value, a unit of account and a medium of exchange. But the digital revolution that has already altered our lives in countless ways - with desktops, laptops, tablets, smartphones, and limitless software programs and apps - is now upending the monetary universe too.

You’re probably familiar with bitcoin, the digital currency created six years ago. Yes, it has its drawbacks. And I have never recommended it as an investment. But it is one of the most powerful innovations in finance in the last 500 years.

And it’s about to get a lot better.

Bitcoin is a different kind of currency. You cannot hold it in your hands. Bitcoins exist purely as entries in an accounting system, a transparent, widely distributed and completely public ledger known as the “blockchain.” This ledger - kept up to date by thousands of competing and independently owned computers known as “miners” - is a disruptive technology.

In our current monetary system, banks and other financial intermediaries determine whether customers have the credit to write checks, charge credit cards or wire money. And while we don’t always see it, they are constantly levying fees and gathering data that they keep on their private, in-house ledgers.

Digital currencies threaten to make them obsolete.

To purchase something, bitcoin owners pay - with complete privacy and almost zero fees - from an online, passcode-protected “wallet.” More than 82,000 merchants - including big vendors like Microsoft (Nasdaq: MSFT) and Virgin Galactic - already accept bitcoin payments.

The downside?

Some critics point out that bitcoin isn’t backed by anything tangible. Note, however, that the dollar hasn’t been backed by gold since August 15, 1971. The intrinsic value of a $100 bill is a fraction of a penny.

At its essence, money is a system for keeping track of who owns or owes what. The blockchain offers an online, decentralized and fully public mechanism for recording those shifting balances.

However, bitcoin is not without its drawbacks. Digital wallets have proven vulnerable to cyberattack and pillaging. New iterations will have to make the currency far safer from theft.

(On the plus side, bitcoin’s groundbreaking core software is open-source, copyright-free, and constantly being improved.)

Bitcoin price fluctuations are far too volatile, too. After a spectacular run-up, the currency crashed and burned last year, losing two-thirds of its value in 2014 and an additional 44% just in the first two weeks of January. Who wants their costs to gyrate 10% to 15% from one week to the next?

But Chris Dixon, a partner at venture-capital firm Andreessen Horowitz, suggests that the developers currently working on bitcoin - of which there may be as many as 10,000 - are some of the smartest people in the world. They have now developed military-grade encryption to make bitcoin wallets more secure. And new trading tools will help stabilize the price.

In other words, the problems with digital currencies are being resolved.

Thousands of specialized apps are being built on top of the blockchain. New digital-currency tools are being created for the world’s 2.5 billion “unbanked” individuals in emerging markets. (This will bring them into the world financial system.) Digital “smart contracts” are being created that won’t need lawyers. Developers are building electronic voting systems that can’t be rigged. Many hundreds of other innovations are in store that will both reduce financial costs and render obsolete millions of jobs in traditional intermediary services.

As is generally the case in this Golden Age for Investors, special interests and middlemen will lose... but consumers and risk-takers stand to win big.

Bitcoin has had a messy, complicated start, something not unusual for innovations ahead of their time.

I still don’t recommend it, just as I wouldn’t have recommended that you take a ride in the Wright Brothers’ first plane.

But even Wall Street bankers and Federal Reserve officials concede that this new technology will ultimately make the financial system more private, more secure and more efficient.

That means digital currencies are here to stay.

Good investing,


 Have thoughts on this article? Leave us a comment below.

P.S. As Alex wrote above, the Internet and mobile technology are radically transforming our financial landscape. While it will probably be a while before bitcoin is adopted by the masses, there is one innovation that investors can profit from NOW. In fact, we’re barreling toward a $662 trillion event that will totally disrupt America’s money supply. Click here to learn more.

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This 93-Year-Old Company Is Setting Its Sights on Securing the Internet

When it comes to safety and privacy, bitcoin still has a long way to go. And you could argue the same is true about the Internet at large. Hardly a week goes by without news of some massive hack (including a $5.2 million heist from, one of the world’s largest bitcoin exchanges, earlier this month).

But crisis breeds opportunity, which is why we’re recommending you look at Raytheon Company (NYSE: RTN)...

A defense contractor with roots that go all the way back to the 1920s, Raytheon is currently positioning itself as a leader in cybersecurity. In fact, JPMorgan noted during an earnings call last summer that the company used the word “cyber” 24 times. And in the past seven years, it’s made over a dozen cybersecurity-related acquisitions.

At the same time, the company has continued to reel in lucrative defense contracts from governments all over the world. Here’s what Alex had to say in a recent note to Momentum Alert subscribers:

This morning [Raytheon] announced that it has acquired privately held Blackbird Technologies, a firm specializing in cybersecurity, surveillance and secure communications to spy agencies and special operations units, for $420 million.

Yesterday Raytheon announced a $174.5 million contract from the U.S. Air Force to provide field support for high-altitude reconnaissance flights. And Thursday it was awarded a multiyear contract worth over $200 million to provide a new weapons system to Japan’s Maritime Self-Defense Force...

Expect Raytheon to report more defense contracts in the weeks ahead... And experience more share price appreciation as well.

- Alexander Moschina with Alexander Green

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