Why am I buying Ankr (ANKR -1.13%) coin? I see a possible future where this tiny blockchain actually disrupts the massive Big 3 cloud providers -- Amazon (NASDAQ: AMZN), Microsoft (NASDAQ: MSFT), and Alphabet (NASDAQ: GOOG).
Does that seem unlikely to you? Well, it might be unlikely, but it's definitely possible. The blockchain is a disruptive force. And there are reasons to think that the massive data centers will be supplanted by peer-to-peer networks (i.e. blockchain). Here's why the Big 3 might be in trouble -- and why a small investment in Ankr today might be worth a huge amount over the next decade.
George Gilder has a vision
In his book Life After Google, futurist George Gilder lays out what the future might look like when Google -- aka Alphabet -- becomes irrelevant. For those who don't remember, back in the 20th century Gilder predicted that the telephone companies would have to adopt fiber optic technology, because their networks were too slow for the internet age. The entire stock market got super-excited about what Gilder was saying. Optical stocks like JDS Uniphase -- now Lumentum (NASDAQ: LITE) -- skyrocketed.
It was not to be. The stock market crashed in 2000, taking a lot of high-flying stocks with it. At one point, Amazon (NASDAQ: AMZN) lost 94% of its value. (Google didn't even exist back then). All the internet high-flyers got killed. Many companies went out of business. And Gilder's optical stocks, unlike Amazon, crashed and never saw their highs again.
Now Gilder is back -- and he's predicting that crypto is the future
In my opinion, you don't read Gilder to get stock market tips. Historically, he is pretty lousy at telling you what stocks to buy. But he is really interesting on the science. And Gilder has some warnings for people who are invested in the cloud providers like Amazon, Microsoft, and Google. Specifically, his warning is that these massive tech companies with their huge data centers are going to be overrun by peer-to-peer networking (i.e. the blockchain). These centralized power structures -- the data centers -- cannot compete with networks powered by millions of computers. There's just no way.
You might say, "Gilder was wrong on the optical stocks, why should we listen to that guy?" Well, one reason you might listen to him is that the crypto universe has exploded, and many crypto investors have made a ton of money -- way more than the people buying the stocks of the cloud providers.
Many people who don't understand technology at all -- rich guys like Warren Buffett -- tell people there is no value in the blockchain and it's all a big waste of money. But Gilder is saying that the blockchain will replace data centers. While Gilder might be weak on specific stock ideas, he's terrific at spotting technological shifts.
Now, you might doubt this. After all, nobody can predict the future! But if you own shares of Amazon, Microsoft, or Alphabet, and you are super-confident about their cloud monopoly, you might think a bit about disruption.
Technology (and tech stocks) are constantly being disrupted by new forms of technology. The blockchain is a new form of technology. And if you pay attention to this sector, you will notice that more and more tech companies are getting involved in the crypto universe. Fintechs like Block (NYSE: SQ) and PayPal (NASDAQ: PYPL) are deeply involved in crypto now, and Meta Platforms (NASDAQ: FB) wanted to issue its own coin until it got cold feet.
You might also think about the 50 million Americans who have invested in crypto, and how much power they have as a group. While Gilder's optical vision was defeated by a handful of powerful telephone companies, I suspect this time that Big Cloud is not going to be able to hold its fort as peer-to-peer networking disrupts their entire business model.
Why I'm making tiny investments in Ankr
Ankr a tiny crypto operation. Its coin trades for pennies ($0.07). It has a $600 million market cap. But unlike a lot of tiny crypto operations, Ankr trades on the Coinbase (NASDAQ: COIN) platform. So it's easy to make small investments in Ankr if you want to. And there's a reason the people who run Coinbase wanted to add Ankr's coin. Venture capitalists and other intelligent investors are backing the coin, and management is very, very smart.
Ankr was founded by Chandler Song, whose first job was working for AWS (Amazon Web Services). While doing that job, he got the idea of using peer-to-peer networks (blockchain) to power cloud networks. One of his bosses, Stanley Wu, was one of the engineers who designed the AWS platform in 2007. Those two men quit Amazon and co-founded Ankr.
It's very exciting to read their story. Over the last two years, Ankr coin has gone up 5,000%. So far in January, it's down 27%. But these short term moves are pretty irrelevant. Ankr is still tiny, and it's very early. But I want to own this blockchain in case Gilder is right and Big Cloud networks are successfully disrupted by peer-to-peer blockchains.
I have no idea if Gilder is suggesting that people should buy Ankr or not. I don't actually trust his specific stock picks (or crypto picks). But I do think Gilder is a very provocative and interesting thinker. And his warnings about the limits of the data center approach struck a chord with me. So I spent some time looking for crypto that might disrupt the Big 3 cloud providers. Ankr is my pick here.
My position is very small. Because Ankr's coin is way under $1, you can easily and cheaply buy thousands of coins. I went ahead and bought 20,000 of them. That's a way smaller investment than it sounds like. It's partly motivated by greed, sure, but it's also motivated by fear. My family has sizable investments in Amazon and Microsoft. If peer-to-peer networking crashes Big Cloud, those stocks will take major hits. So I see my family's tiny investment in Ankr as a way to protect us in case this blockchain tsunami ultimately takes out the cloud providers we have now.