The other day I was watching a video of someone who deals with technology and other topics related to the future. He usually does have a pretty good grasp on things. Unfortunately, when it comes to cryptocurrency he is completely off base.
Of course, he does have an economics background which could explain a lot. He also has taught courses on blockchain at a well known university, which should be a lesson to everyone about the "experts".
One of the reasons he tells people to shy away from cryptocurrency is he believes you only need around 10. Outside of that, the rest are not necessary.
"Why do you need all those cryptocurrencies".
This is where I diverge from the individual. It is evident he has no conception of what is going on. If I had to guess, he looks at cryptocurrency simply from the perspective as a medium of exchange.
In this article we will dive into this and see why we do, indeed, need millions of cryptocurrencies.
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Why We Need So Many Tokens
This discussion starts with networks.
When we look at the basic infrastructure of the Internet, it is the network. After all, the Internet was really the connecting of a series of nodes (personal computers) to enable machine-to-machine communication. Of course, humans could do the same although their percentage of the traffic is on the decline.
Our present Internet is dominated by a handful of networks. The same is true for the financial industry, with a large number of household names standing out. In fact, one, Visa, is being sued for anti-trust.
This is a centralized system. Web 3.0 brings the hope of decentralization.
Here is where the world shifts. Instead of one with few networks, we are entering a time where networks will be abundant. This would not be a radical change until we pull in the idea of ownership. Who is going to financially benefit from these networks?
Under the present system, it is a small percentage of the population. With tokenization, we can see billions of owners.
Which shows the first flaw in this thinking. If we are only to have 10 cryptocurrencies, that would likely mean only 10 networks. That is Web 2.0, part 2. Why do we want that?
Digital Platforms
The idea of digital real estate is upon us. coins tied to networks are one aspect to this.
Another are the digital platforms themselves. We see this with applications built on top of these networks. Tokens can represent a stake in the platform. While this does not convey any of the legal requirement of stocks, the framework does bring a bit of mental clarity.
Value of networks is driven by network effects. This is something that we can easily see. Presently, the shareholders, who tend to have nothing to do with that, benefit. With Web 3.0, tokens capture the value generated. Since the token holders can be the users themselves, this move things to a completely different level.
The ownership proposition is completely changed.
Even at its most basic form, we can think of this as quantifying the social layer. Depending upon the tokenonmics, there might be a direct feed of revenues generated. However, this is not mandatory.
Token could represent the social layer, i.e the accumulation of fans or users. For example, Taylor Swift would do well to bring out a token that gets distributed to her fans. There is an entire ecosystem built, both social and financial, that she could leverage.
Many would think of using the token for payment. Here is where the individual mentioned at the start of this article goes wrong. The Swiftie token would represent the value of her social base. While payments might be part of the equation, there is so much more to it. An entire cryptonomic system could develop via her fan base.
Again, the idea of 10 tokens seems a bit absurd in this light.
How many digital platforms are there? When we think about artists, companies, and entertainment franchises, what are the number of fanbases out there?
Tens of Billions of AI Agents
Cryptocurrency is AI.
Coinbase did the first Ai-to-AI crypto payment. This is the future and shows how things are going to change quickly.
When it comes to payments, the future of crypto is not human. AI-to-AI payments are going to make up the majority of these transactions. This might seem a bit unsettling to many at first. However, keep in mind that most stock trades are initiated by computers.
We are going to see tens of billions of AI agents created over the next few years. They will be even more plentiful then YouTube or OnlyFans channels. People will spin up dozens of them.
Many will be for personal or isolate use. There will be some that are hubs of activity. Here is where tokens come in.
Again, moving past the idea of payments, who is going to own these agents. Naturally, they could be individuals. We can presume that corporations are going to roll out billions of them. For the latter, the ownership is evident.
That said, how about AI agents that are owned via a DAO. This is the true use case for decentralized autonomous organizations. The problem with this area, so far, is the automation. People are trying to establish DAOs without automation. It doesn't work.
AI agents are ideally suited for a DAO. It is an autonomous agent that can operate without human intervention. The value of this agent could be captured via a token. Many individuals could have stake in this.
It also brings a new governance to the table. Instead of your typical corporation, the DAO is a new business format that is open to all.
To repeat, are you going to capture the value of billions of AI agents with 10 cryptocurrencies?
Crypto Is Not Payments
The problem with cryptocurrency is the name.
What we are dealing with is digital assets. Most cryptocurrency is not suited as a medium of exchange. This is where people are misled.
This role is being captured by stablecoins. The design of these can be debated. Nevertheless, the price stability that these tokens achieve makes them ideally suited for this purpose.
Crypto is value capture. This is the main utility. There are, naturally, other use cases such as access. Have you seen a platform that provides access to certain features based upon the number of tokens held. This is a concept that has not been fully exploded as of yet.
The idea that innovation is going to be limited by 10 tokens is truly absurd. Here is someone who professes to be knowledgeable about cryptocurrency and yet misses it completely.
This is the problem with "experts". As always, be careful where you get your information.
A simple processing of the potential utility shows how this will easily grow into millions of tokens.
Posted Using InLeo Alpha
