GOLD RUSH
On January 24th, 1848, Swiss-born Johann Sutter was dismayed by the news that his chief mechanic delivered: Gold had been discovered on the site of Sutter’s sawmill.

Most readers are aware that this discovery kicked off the “California Gold Rush,” but few ever hear of Sutter’s immediate reaction: “From the very beginning I knew what the outcome would be. My property was entirely exposed and at the mercy of the rabble. I was alone, and there was no law.”

Within three months San Francisco schools were closed, because teachers and pupils had taken up mining. Within a year, the gold rush had impacted every corner of the country.

While very few miners found fortune or glory in their pursuit of gold, and Sutter himself watched his businesses fail; it was the utilities, merchants, saloons, hotels, banks and myriad other entrepreneurs that capitalized the opportunity at unprecedented rates. This led to demand for better information sharing and more robust supply chains. It spurred the telegraph, and fueled rail expansion. Despite the bleak fortunes of most mining pioneers, gold played an outsized role in the economy and financial system until Nixon famously closed the gold window in 1971.

Are we in a new gold rush?

Bitcoin and cryptocurrency spurred gold-rush hysteria that has ripped through popular consciousness, carrying with it a familiar story of fortune for a small few and losses for a great many. What can we learn from history – from our impulse to “chase the gold”?

“We can learn that opportunity stems from leveraging the underlying change – in this case the technology, not from chasing the story of gold “in them there hills.”

Cryptocurrencies may or may not linger in our society, but the underlying technology of blockchain will change the world forever, even if doing so in hyper boring ways. Warren Buffet famously notes that most people don’t have the patience to “get rich slowly,” and this skews their minds and efforts towards less-productive strategies, i.e. the get rich quick stories and hoax’s.

Yes, it’s far more exciting to pan for gold, but sometimes boring can create fortunes. Mark Twain reminded us that although “history doesn’t repeat, it often rhymes”. The initial Gold Rush phase of the blockchain revolution may be over, but to my eye the real opportunities are just getting started.