Many feel that cryptocurrency is worthless. There is a sentiment out there that it has no inherent value and is nothing more than a scam. This resembles the talk track that was prevalent during the early days of the Internet.
Yet, to date, the global network of computers might be the most powerful creator of wealth in human history. Certainly, Amazon, Google, and Facebook are all Internet companies that were, at one time, worth over $1 trillion. That doesn't even factor in the Chinese counterparts, which were some of the largest entities in the East.
It is impossible to imagine the wealth that was generated by the Internet so far. Whatever it is, it might be mild compared to what is about to come.
Cryptocurrency is going to set off the next evolution of human wealth, only orders of magnitude larger.
Digitization Taken To The Next Level
Most are aware that we are embarking upon what is termed Web 3.0. While we can debate what the characteristics will be and how it will look, we cannot counter the fact the Internet is undergoing a revolution. It is the early days but the next generation is upon us.
We can surmise the "new Internet" is going to have a much different medium of exchange, ownership structure, and utility. Just like Web 2.0 was a marked difference from the early days of static webpages and one-way text communication, we can be certain the next iteration will be as equally stark in comparison.
This means a lot more wealth.
We also have to understand the potential for disruption. Few of us were aware that an online bookstore was going to decimate the entire retail sector. Yet that is exactly what Amazon did on its way to becoming one of the largest companies in the world.
It simultaneously made Jeff Bezos, for a time, the richest person in the world.
We know this is par for the course. Larry Ellison, Bill Gates, and Steve Jobs are just some of the names of billionaires who achieved it through technological development. Of course, there were many others who were right there with them, such as Paul Allen and Steve Wozniak.
The difference is that cryptocurrency opens the realm of participation. Today, we have people in nations such as Nigeria who are accumulating holdings in particular projects. If some of these end up being 1/10,000th of what those other companies were, we are dealing with life changing money for thousands of people.
Multiply this across the entire spectrum.
The Ability To Monetize Anything Is The 9th Wonder Of The World
Many call compound interest the "8th wonder of the world". If that is the case, we are seeing the formation of the 9th.
The ability to put value to work is immeasurable. Some credit Michael Milken, the former junk bond king, with ushering in an organizational change that set off a huge amount of economic growth. By getting the assets of traditional businesses into the market, it set of an enormous productivity surge.
Just think of the vast potential of tokenization. We are about to set off another wave of economic productivity simply by monetizing anything and everything. This will results in markets forming, capital that is suddenly available for other revenue producing prospects.
Today, it is difficult to distinguish the economy from the financial sector. The pretty much are the same. Through financialization, we unleashed an economic powerhouse that has seen GDPs around the world move to all time highs. Unfortunately, the growth rates are slowing for a variety of reasons. One of them is the inability for capital to be properly allocated.
Cryptocurrency solves this problem. It simultaneously brings money creation and intermediation to the table. The key difference is it separates the two. At present, the money creators and intermediaries are the same: banks. These for profit institutions allocate money where and when it is most profitable. Since they are responsible for both, this forms a barrier to providing resources when and where they are needed.
Monetization through cryptocurrency radically alters this path. We are starting to see the infrastructure in place which will allow for the development of platforms to leverage this. We could easily see 100x growth in under a decade.
A rising technology built upon another rising technology is sure to have a compounding effect.
Holdings Of The Financial World
Being a technology, it is no surprise that cryptocurrency is moving in alignment with large, publicly traded technology firms. This is one area where we can project future value.
There is another that is equally as impressive. If we look at the major financial companies around the world, their holdings are enormous. This is an area that cryptocurrency, along with blockchain, is going to disrupt. Consider the wealth that banks, hedge funds, and insurance companies all have. The numbers, if we added them all up, are truly staggering.
Fortunately, that is available to all of us. Decentralized Finance (DeFi) is already showing its merit. Certainly, we acknowledge the early stages of the process. However, we can see how the ability for open participation along with the decrease in friction can radically alter the wealth landscape.
Just think of what the growth rate has to be for DeFi to reach tens of trillions in holdings. Now consider who the different players will be in that arena. The reality is that people who will be using Web 3.0 applications will, by default, be involved in DeFi.
This would be akin to everyone who uses Facebook and Youtube being a part of the hedge fund and banking industries. The amount of wealth that would generated if that were the case would be 3x or 4x higher than it is now.
With cryptocurrency, this is going to be possible.
If we feel the changes the Internet brought about were impressive, we have to believe that the next generation will continue this path forward. Digitization is not something that is going to stop. With cryptocurrency, we now have a way to monetize what is taking place natively.
This is going to result in a radical transformation for society. Like most paradigms shifts, the resulted in the creation of enormous sums of wealth. Unfortunately, the distribution throughout history was rather poor.
With cryptocurrency, this is not going to be the case. Everyone is going to be participating in the DeFi world which is going to unleash a massive wave of economic productivity.
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