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How to Invest in ConsenSys and MetaMask


www.bitcoinmarketjournal.com 16 September 2021 18:48, UTC
Reading time: ~4 m

MetaMask, the crypto wallet, is a terrific product. Can you invest in it?

The short answer is no. The longer answer is yes, indirectly. The longest answer is ConsenSys, the parent company of MetaMask, will probably eventually go public—and then you’ll be able to invest directly.

In this article we’ll tell you how to invest in MetaMask and ConsenSys … for now.

What is MetaMask?

Unfortunately, the company’s “What is MetaMask?” video is terrible. (Top-rated user comment: “I just watched the video and now I don’t know what is MetaMask.”) They need some marketing help, so let me simplify.

MetaMask is a crypto wallet and global authenticator that can be installed as a browser extension, or downloaded as a mobile app.

Two functions: crypto wallet + global authenticator.

The crypto wallet part is easy: MetaMask safely stores your cryptocurrency, and allows you to buy, send, or trade (“swap”) one token for another. MetaMask only supports Ethereum-based cryptocurrencies (more on that in a moment), so you can’t use it to store plain old bitcoin.

The global authenticator piece is more difficult to understand, until you use it – then it seems like magic. (MetaMagic.) Instead of signing in (or “authenticating”) to your banking website, which usually requires a username, password, secret phrase, two-factor authentication, and identifying which of the squares have a blurry picture of a hobo at a railroad crossing, global authentication is one click.

I’m talking one-click, like Amazon 1-Click. (Okay, technically two clicks: one click to connect to your wallet, then click “OK” to give MetaMask access.) But it is such a mind-blowing change from the usual terrible login experience for most websites – especially financial websites – that you really have to try it to believe it.

Who’s Using MetaMask?

According to the ConsenSys newsletter, MetaMask currently has over 10 million active monthly users. To put that into comparison, there are about 2 billion online banking users, so there’s lots of room to grow. Like the early days of online banking, these 10 million MetaMask users are tech-savvy. They’re early adopters.

And they have money.

This means MetaMask will become an increasingly attractive acquisition for the world’s largest banks and financial institutions – which is why Mastercard, UBS, and JPMorgan recently plowed $65 million into ConsenSys, the parent company of MetaMask.

It’s ConsenSys, not MetaMask, that’s the real investment opportunity.

Can We Invest in It?

ConsenSys is one of the most interesting companies of our time.

The origin story starts with Joe Lubin, one of the founding members of Ethereum, the #2 cryptocurrency in the world. In The Infinite Machine, Camila Russo’s excellent history of Ethereum, Lubin is portrayed as the “grown-up in the room,” the guy who helps the team of hackers and misfits find big-league funding for their fledgling idea.

(Lubin also looks exactly like my brother-in-law Chris. One of my goals in life is to get them side-by-side for a photo.)

After Ethereum, Lubin founded ConsenSys, with the aim of turning it into an Ethereum venture studio. Since its inception in 2014, the company has created countless products around the Ethereum ecosystem, from Infura (think of it like Amazon Web Services for Ethereum) to CodeFi (which allows you to tokenize anything).

And, of course, MetaMask.

Like the wider crypto market, ConsenSys has gone through a few boom-and-bust cycles, hiring aggressively during market upswings and enduring layoffs during the downturns. (Current headcount is 350+ employees.) Like any startup studio, many ConsenSys products do not make it.

But occasionally, you produce a MetaMask.

ConsenSys is thought to have been privately self-funded by Lubin, who is (or was) likely a multibillionaire, given his early involvement in Ethereum. If this is true, he’s put his money to good use, by actively building the tools and products that have grown the Ethereum ecosystem.

Like MetaMask.

The real investment opportunity, then, is in ConsenSys.

Can You Invest in ConsenSys?

Not yet.

Unfortunately, ConsenSys is still a private company. Until we have a ConsenSys IPO (not guaranteed, but seems likely), the best way to “invest” indirectly in ConsenSys is to simply buy and hold Ethereum.

Because the fortunes of ConsenSys are inevitably tied up with those of Ethereum, buying and holding Ethereum is a proxy (or substitute) for buying ConsenSys. In fact, if and when ConsenSys does offer shares to the public, we can expect a big price bump to Ethereum (just like bitcoin hit an all-time high on April 14, 2021, the first day we were all able to invest in Coinbase).

You can use pre-IPO marketplaces like EquityZen to buy shares of ConsenSys, but they’re available only to accredited investors (read: kinda rich). Buying pre-IPO shares on these “secondary markets” is usually more difficult than just buying and holding Ethereum – which, in contrast, is easy to buy on a crypto exchange like Coinbase.

Or, you can buy Ethereum directly from within MetaMask.


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