Pretty dope article on the web3 financial infrastructure from CityAM… Most blog posts on financial blogs are pants, but this is one was actually pretty daaaaaycent…
Extra cool points for the cool photo:
The Metaverse will spur the transformation of massive wealth from grave to cradle via the blockchain, home to NFTs which revolutionise digital private ownership, and home to DeFi which upends legacy banking and finance. Indeed, Naval Ravikant’s prediction that 90 per cent of jobs on Wall St will be gone in several years is still on track.
Younger gens tend to trust and embrace newer technologies since they often grew up in such an environment where the internet was standard, so are more likely to have bought Bitcoin which became an integral part of the internet’s DNA some years ago when it was under $1000, and if they don’t already own it, stand to inherit more than $30 trillion in wealth in the coming years which will more likely be put into digital stores of wealth such as Bitcoin and owning a piece of the metaverse over something as archaic as gold.
The creation of digital worlds for the masses which simulates the physical world is accelerating. What started as an infinitesimal fraction in the early 1980s with the first role playing games for the personal computer and multi-player ascii games at 300 baud has been exponentially spreading globally, and now, is facilitated by blockchain.
Human beings codify their existence to make it comprehensible. Words are oversimplifications of a deeper, holistic understanding. Words are often illusory. The magnitude of what is coming is therefore incomprehensible to most. Blockchain, AI, telepathic communication of which empathic communication is a subset, and life in the Metaverse are all still many hops away before a full understanding is reached. Until then, such possibilities remain largely unfathomable.
But as with all S-curve technologies, with understanding, mass adoption will come.
We have some of the sharpest minds on the planet driving colossal sums of capital that target young cryptocompanies. What was worth just a few billion dollars six years ago in 2015 is now a trillion dollar space. It will become, dare I say it, a quadrillion dollar space in time. But then I called for Bitcoin to reach $10,000 when it was still in its teens, then $1 million for my keynote at the Geneva WealthTech before it had broken $10,000 in 2017.
The asymmetrical upside is unfathomable. Not even counting its first year of operation, $1 invested in bitcoin in 2010 at an average cost of $0.007 is worth more than $60 million today. And it is just getting started.
Question: How many employees beyond the initial very few to launch the platform or maintain the front ends does it take to run smart contracts on DEXs such as Uniswap, Sushiswap, or Pancakeswap? How many employees does it take to approve your DeFi loan? How many employees does it take to maintain a Digital Autonomous Organization (DAO or DO)? How many employees does it take to operate peer-to-peer file sharing?
The platforms can continue to operate via p2p without intervention. This makes crypto orders of magnitude more efficient than traditional centralised organisations such as the tens of thousands of employees in traditional banking and finance. Coinbase alone has more than 1,000 employees.
Crypto protocols enable services to happen with higher security and less cost. Meanwhile, equally efficient structures can be built on top of the new structures for added utility. The amount of productivity generated is already soaring but the end game is nearly incomprehensible. The impact on GDP will be immense and is the one white swan variable that can mitigate the catastrophic effects of record levels of debt and low interest rates as I have written in prior reports.
The price of bonds at the long end of the yield curve will rise as the expectations for economic growth rise.
Web 3.0 is the foundational layer on which these technological developments will take place. We need clear regulation so countries such as Singapore can crunch through their growing backlog of companies waiting to take advantage of the blockchain-based cryptocurrency ecosystem. They all see the orders of magnitude in efficiencies gained by moving into such technologies.
Bitcoin is disinflationary thus is the perfect inflation hedge against the sums of fiat money being printed.
Crypto creates utility which boosts productivity which boosts GDP which boosts the price of the long bond which tames inflation as actual demand becomes a vibrant part of the ecosystem once again. Buckle up. We’re going into a new era.