Cryptocurrency: What The Revolution Is Truly About
There is a lot of misunderstanding about cryptocurrency. This not only comes from the likes of Warren Buffett. It also is something that is commonplace among those within the industry itself.
Do not get me wrong, a lot of what we are dealing with is important. We cannot overstate the value of censorship resistant. Decentralization is vital to the path going forward. Technology offers the ability to construct powerful networks with nodes located all over the world.
This is the epitome of the Internet. Most focus upon things such as account ownership when discussing Web 3.0. This is not incorrect. It is, however, only a piece of the puzzle. The major shift is in the infrastructure. Moving out of the siloed system that is Web 2.0 is the innovation.
Cryptocurrency, tied to blockchain, is moving the world into the digital realm. This means instant globalization the second we log on. For all the talk about de-globalization, which most apply to manufacturing, what is overlooked is the Internet is growing as a percentage of our economies. Our daily lives, both personal and business, interact with this medium on an ever-growing basis.
First Major Shift in 400 Years
Cryptocurrency, or tokenization, is the first major shift since the 17th century. It is addressing a problem that has plagued humanity. While the present system is better than many centuries ago, we still are mired with the problem of distribution.
What we saw so long ago was the first publicly traded company. This, in theory, allowed anyone to have an ownership stake in the organization. Of course, the reality was few could get involved. It is something that changed over the last few centuries. The problem is those without means cannot partake. We see this today.
The percentage of people who own assets such as stocks, even in the developed world, is minimal. That means most have no ownership stake in the companies doing business. Hence, to a large degree, we still have an exclusionary system.
This is what cryptocurrency solves. What it does is alters the way the economy is organized and distributes the economic output. Read that again.
Cryptocurrency alters the way the economy is organized and distributes the economic output. Corporations and traditional markets only went so far.
Here we see the next step in the evolution. And it is a revolution in the making.
Value Out Of Thin Air
Innovation, especially related to technology, creates value "out of thin air". Nothing excelled better at this than the banks. They are the epitome of capturing that value. The ability to create products that capture activity by forming a market is what took place the last few centuries. It is also easy to see why that, while the economic pie was more widely held, inequality increased. This is compounded with each move forward of technology.
We are entering an age of enormous technological advancement. Many like to use the term exponential. This is carrying forward the last 30 years of innovation. To humanity's benefit, this is going to accelerate. We will see some pitfalls as change is difficult. However, much like the past, society will improve.
Of course, this brings us back to distribution of the economic output. It is wonderful is we have a massive increase but it is negated if people like Elon Musk and Zuckerberg make up the small handful of beneficiaries. Since most of the world does not have the resources to buy into this system, they are left on the outside.
The fact that we have something that is value capture means that whatever is created individually, or by a small group, can be tokenized. This seriously alters the economic distribution related to product or application. It is easy to see how this was not part of humanity's makeup even a few years ago.
Suddenly, we are dealing with an inclusionary system.
Let us take the concept of online advertising. We know the two major players are Google and Facebook. They generate billions from their online ads. While there could be revenue sharing models, most people who provide content get nothing of financial value for their efforts. We will leave aside the money generated from the data that is provided.
Web 3.0 instantly alters this premise. Here we can have a social media platform that has user engagement. However, unlike the major Web 2.0 entities, this is tokenized. All holders of the tokens can share in the economic productivity that comes in the form of advertising. The platform can take the revenue and distribute it to the token holders.
How do these token holders get the token? Naturally, they can purchase it on the open market. While this is effective, it is a replica of the existing exclusionary system.
With Hive, and the proof-of-brain (PoB) mechanism, we can see how token distribution is tied to activity. One has the potential to be granted financial stake in the system simply by being an active participant.
This is the revolutionary nature of cryptocurrency. It allows for a completely new distribution model related to economic productivity. Keep in mind, when talking about currency, this is ultimately what determines value.
Currency is directly tied to economic productivity. Hence, when we are dealing with cryptocurrency, this is a new model for the distribution of said output. It is something that is as revolutionary as the corporation, likely to generate even greater gains due to technological advancement.
Revolutions tend to be evolutionary in nature. The tokenization of everything is a way of phrasing how the economy will be structured. We are no longer dealing with a geographic basis, hierarchical system, or one that is centered in any particular region. This is global by default and exists primarily in the digital realm.
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