We are entering a new era.
Tokenization is going to radically alter the distribution of economic productivity. To me, this is going to eventually rival the corporate state in value. We are seeing a massive shift in the evolution of the digital realm. Of course, with technological advancements, this is expanding a great deal, blurring the line between the physical and digital.
The Laws of Information Technology are very powerful. It is something that many are going to take advantage of. This has the potential to create an entirely new economy.
What is most interesting is the fact of compounding. The digital realm expands exponentially. It is multi-layered, providing financial opportunities where they were previously not available.
In this article we will focus upon the Hive ecosystem. This epitomizes how things can compound over time.
Taking Advantage of a Compounding Machine
This quote is often attributed to Albert Einstein. There is debate about that as John D. Rockefeller is stated by some to be the author.
Whomever is responsible, most are aware of the power of compounding. It is a financial mechanism that exemplifies the concept of exponentiality.
When we look at a compounding chart, this is what we see:
The early stages are like watching grass grow. It is very boring and it is easy to give up. We often conclude that nothing is happening, hence direct resources elsewhere.
This is a mistake.
As we dig deeper into this, the most important factor is time, something that cannot be rushed. It is often said that "time takes time".
For most, the idea of compounding, at least financially, puts us on the wrong side of the equation. Instead of benefitting, many are crushed because they are compounding debt. Credit cards are a prime example of this. They are designed in such as way that, if you only pay the minimum, you will get eaten alive. The processes is accelerated if you do keep making the base payment, they raise the limit to ensure you get further behind.
Look at the chart again and, instead of 10%, think about 22%.
Web 3.0: A New Approach
Web 3.0 has the potential to change things on many levels. Since we are in the very early stages, much of what we discuss is mostly theory.
That said, we find a few nuggets where the process is starting to appear.
Multi-faceted layers present enormous opportunities. When we look at something like Hive, we see infrastructure, content creation, and curation. Within this, there are both base and second layers. The main chain is supplemented by sidechains.
All of this incentivized which means potential returns for people.
This is also enhanced by the ownership proposition that having stake provides. It is a marked difference as compared to the present structure of the Internet. Few have any stake in what takes place other than as a user.
The starting point is naturally to get some income capital going. We can do this by concentrating on the different offerings provides. Again, this can be base or second layer. The best approach is a combination.
Over time, we turn to the idea of staking capital. Here is where the assets are put to work, seeking to generate a larger return.
Media Based Operations
If we look at the history of the Internet, it starts a massive shift in media. Granted, this took place over 30 years so it was not obvious from the start.
Text was the first format to get disrupted. Due to sites such as Wordpress, anyone could become a journalist. Blogging became part of our language. The traditional purveyors of print media, newspapers, saw massive disruption. Many went out of business.
Music was the next to see the industry change.
Due to a new distribution system, it became easy to transfer songs, often in violation of copyright laws. That said, the technological ability caused enough of a hit to the revenue streams that many record companies went under.
Over the last decade, video accelerated. YouTube is one of the most visited sites. The amount of video that is uploaded in two days eclipses all the ours of television for a year.
This is causing major headaches for the media companies.
What we are looking at is much bigger than social media. Instead, we are dealing with a reorganization of the entire entertainment world due to the advancement of technology companies.
Here is where Web 3.0 benefits.
Due to the realm it operates within, we are dealing with technological entities. There is nothing physical about what we are talking about. This is what sets the exponentialities in motion.
When media activities are tied to tokenization, new monetization models can arise. This will only accelerate the compounding.
Micro-earning
I am a firm believer that the future is one of micro-earning.
Before cryptocurrency, micro-payments were not feasible. The present financial system, run by the banks, makes this impossible. With so many intermediaries, the cost is simply too high. A micro-payment ends up being a net negative.
That is not the case with a network that has zero direct transaction fees. Suddenly, micro-payments are possible. What this means is micro-earning is also realistic.
The idea behind micro-earning is to garner small amounts, potentially hundreds of times per day. While the impact of any single transaction is minimal, the totality adds up over time. This is enhanced by the idea of compounding, such as staking.
Essentially, we are looking at the monetization of data. That is what ledger based money really is. For this reason, as more data is generated, value increases are realized.
All of this can build upon itself.
Over the last 18 months, we learned how valuable data really is. While most of us had an idea, the emergence of chatbots due to LLMs really drove the point home. We are seeing multi-million dollar deals as companies scramble for the data.
Unfortunately, under the Web 2.0 scenario, this is not of benefit (financially) to most. It is the companies that own the platforms that are benefitting.
Web 3.0, in my view, is going to be the opposite of what most people experience.
Today, the majority of the population gets its income from one source, i.e. a job. Web 3.0 is going to provide small amounts of income from many different sources. All of that can be enhanced either through staking or by adding more layers.
Over time, if people follow the concept of a compounding chart, we can see how this can accelerate. After all, that is what compounding does.
Hive is a network that is already putting this into operation.
Posted Using InLeo Alpha