Technology always advances society. At the same time, it creates enormous wealth, improving the standard of living for most.
This is something that is clear the last 200 years. When we look at life in the early 1800s, it is not comparable to what we have today. In fact, much of what people utilize wasn't even available to the wealthiest among us 40 years ago.
Consider the fact that more than 5 billion people have the knowledge base of human history only a few clicks away. This is more information that is accessed easier than the President of the United States had in the early 1980s.
Just look at the "ages" we had:
- personal computing
- mobile
- the Internet
This created trillions of dollars in wealth. It also generate hundreds of trillions in value.
Now we see blockchain and cryptocurrency starting to accelerate. These are going to be key pieces in Web 3.0.
In this article we will discuss how we are at the early stages of the greatest wealth generation in human history.
Asset Generation
One of the keys to this is the fact that we are looking at a time where we will see incredible asset generation. This is vital to the progress that will be witnessed going forward.
Assets are how people build wealth. Unfortunately, throughout history, the access was enjoyed only by a select few. While technology has expanded the pool, with each generation growing, the present system is still exclusionary.
To start, there are billions around the world who simply lack the resources to be involved. Then, in developed countries like the United States, the system is designed to benefit only the select few. Accredited investor is claimed to "protect" individual when it really simply eliminates them from the outstanding returns enjoyed by those who are more "knowledgeable".
Digital assets are bringing something different to the table.
Here we see the distribution occurring in a manner never witnessed before. The idea of creating products out of thin air is nothing new. Wall Street had done it for centuries. However, the ability to benefit from this was isolated, ignoring the masses.
Cryptocurrency changes this. We are embarking upon a time when anything can be tokenized. This alters the entire spectrum of wealth.
More Powerful Technology
Another component to understand is that technology only gets more powerful. The digital realm keeps advancing. With each iteration in hardware, algorithms, software stacks, and open source ideas, the entire ecosystem is enhanced. This has a compounding effect as all facets tend to see improvement.
Semiconductors are faster than ever. Compression techniques never have been so efficient. Storage has grown at an exponential rate. Data is plentiful and cleaner.
The Internet was an incredible innovation. It was one of the most impactful technological development in human history. From this perspective, it ranks up there with fire and electricity.
To me, what we are dealing with something that is going to be an order of magnitude larger than that breakthrough. This is the Internet on steroids.
When it comes to the technological realm, 30 years is forever especially with digital technology. The Internet came to the developed world around 25 years ago. Consider now much things changed since that time. This is what underlies all that is being created.
It had an enormous impact in finance. Markets saw a huge surge in volumes over that time, resulting from technological advancements that brought more players in. We also saw the rise of banks, to degrees we never saw as communication systems improved. Global operations is commonplace due to the fact, in part, that everyone is only a click away.
This is an important concept to carry forward. Tokenization is going to accelerate this.
We Are All Bankers Now
What happens when everyone on the planet is a banker?
By this, I am not referring to the concept of a digital wallet and it being a bank. Instead, I am referring to the ability to create financial products with ease and for minimal cost. For decades, banks brought out financial products that generated trillions. Of course, they had a monopoly on that game.
While many look at digital wallets from the commercial banking side of things, it is the investment banking that holds the most potential.
Lending and funding are now being brought to the average user. Consider the world of venture capital. These funds have large war chests to invest. They go around to startup, taking on great risk in a quest for massive returns. Over time, most of these firms grow in size. While they lose quite often, their winners end up being huge.
Naturally, this is not something that most of us are involved in.
With cryptocurrency, this can change. People have the ability to fill their wallets with assets that have market value. This means that, once the infrastructure is in place, those individuals can leverage those holdings to invest in other projects. No longer is this simply the realm of the largest financial institutions.
People will be able to take even a couple hundred dollars in assets and use them to seek a greater return. This is coupled with the fact they each will be able to generate derivatives that can be used for liquidity, hedging, leverage, or transfer of value. Again, this is entering the realm of the largest banks.
Fortress Balance Sheet
JP Morgan is one of the largest banks in the world. This firm has thrived under Jamie Dimon.
Have you ever wondered why, whenever there is trouble, it seems like JPM is the one buying up distressed banks? There is a reason for this and it stems from Dimon's approach.
He preaches having a fortress balance sheet. To explain it, here is a short video:
Essentially he changed the way the bank approached risk. Having the liquidity that comes from a powerful balance sheet, i.e. asset base, means the firm can take action when difficulty falls upon others.
With cryptocurrency, this is something that each individual can follow. Markets have their ups and downs. Bulls rage at times, causing the bear to hibernate. This, of course, can turn on a dime, reversing the trend. We also have the business cycle to content with. There are periods of expansion, always followed by contraction.
Rinse and repeat.
Here is where billions of people can alter the plight. With asset becoming plentiful, tokenizing value that exist yet is not captured, we can see how this can be utilized to grow the wealth for hundreds of millions of people. Most, unfortunately, are not going to latch onto what is taking place for a long time. There are going to be, however, many who understand the opportunities and take advantage of them.
That is what is being offered.
Individuals are going to have to learn about risk, management, and markets. This is the fee paid to be involved. Sadly, human tendency appears to be wanting something for nothing. While we are seeing more opportunity to earn, personal knowledge is vital.
For those who do follow this path, huge fortunes are possible. Watching the banks for so long, it is evident to me what they generate. That said, this is stifled compared to what tokenization and digital assets are going to create.
We are talking about massive industries (in terms of market capitalization having the value not only grow but also be spread to millions of people not presently participating. This is a rather novel concept.
So if you think the idea of everyone being a content creator and being rewarded, consider what happens when anyone is essentially an investment banker.
It changes everything.
This is why cryptocurrency will eventually get into the quadrillions.
Posted Using LeoFinance Alpha
