2021: The Start Of The Tokenization Of Everything

over 3 years ago

This is a bit of a misleading title since we already are starting to see the process underway. However, as is apt to take place this time of the year, many of us look forward to the upcoming year wondering what will take place.

As we look towards 2021 through the lens of cryptocurrency and blockchain, we see a great deal of potential. 2020 was the best year in this industry which started with the release of the Bitcoin White Paper. Since that time, we saw a ton of experimentation, development, and many successes. Of course there were failures along the way but that is where the learning process accelerates.

When the Internet was starting to gain in popularity, many started to talk about the "New Economy". This was a distinction made from what had traditionally being taking place. The New Economy was the online world.

For many of the optimistic forecasters, this did not take place as envisioned. It was a prolonged process since people did not really understand the concept. Also, the adoption rate was slowed by technological drawbacks such as slow Internet speeds.

Today, we are living in a different world. At least 60% of the global economy is online and has an understanding of it. We also see a vast network of mobile users, a feat that is accelerating rates of adoption. In short, we might be nearing the time when a true "New Economy" is formed.

I firmly believe many of our old models are dying before our eyes. What was common just a couple decades ago will be obliterated in just 10 years. This is going to happen on a grand scale.

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One of the central themes of the New Economy is going to be tokenization. This is an alternative that is starting to gain a lot of steam. We presently see the infrastructure being developed that is going to enable this to take place on a mass scale.

Tokenization is widespread derivative creation. Wall Street held the monopoly on this for decades. They rolled out assets that were sold based upon whatever their minds could come up with. Today, nobody is really sure what the value of all this stuff is but many believe it is in the quadrillions.

The New Economy is essentially providing this option to anyone. We are seeing that anything can be tokenized. As we proceed further into what is called the "attention economy", tokenization is going to be vital. At some point, the masses will realize that it is not in their best interest to give their time away from nothing.

Essentially, whatever someone (or a group of someones) is interested in, that can be tokenized. We are beginning to see the idea of fanbases entering this realm. It only makes sense that a group of people who support a particular team or club get rewarded for their attention.

Thus far, that was not the basis of our economy.

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We are also seeing a radical change in what is termed a "producer". In the past, the producers and the consumers were separate. This basic economic model meant that there was a line between who paid, and who got paid.

Tokenization flips this all around. We see more of a circular, or collaborative, model being constructed. Consumers are producers. At the most basic level, there time (attention) is worth something. Instead of freely giving it, they are seeing that rewarded. At the same time, we all are data producers regardless of what we are doing. For the time being, that is to the benefit of platforms, to the exclusion of those actually producing said data.

It is time that change. Tokenization enables economic structures that tend to all stakeholders. The most active and dedicated are the ones who benefit the most. Those who are the outliers or disinterested do not share in the proceeds.

Much is made of income and wealth inequality. This is something that has grown in 2020 due to the pandemic-caused lockdowns. Millions of small businesses around the world were eliminated, with millions more teetering on the brink of collapse. This has put the larger companies in a much stronger position.

Of course, the net result is a much wider spread in the wealth gap.

Nevertheless, there is a lesson for those who were able to participate in this to a degree. It is amazing how much difference one year can make. Just ask anyone who has a decent number of shares in Tesla. Or, as we are presently seeing, those who have a pretty good stack of Bitcoin are seeing their fortunes changes rapidly.

The sad reality is this is still part of the old model. For the most part, those involved in these asset classes had some means to start with. In other words, one had to pay to play. Tesla and Bitcoin, for the most part, require money to get involved. This excludes the vast portion of humanity.

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Tokenization is not exclusionary. Instead, it is inclusive. When people start to realize they can tokenize whatever interests them, or at least get involved with those who already tokenized it, things will shift quickly. The New Economy will take off as tens of millions become aware of the economic potential that is before them.

Bitcoin is paving the way but that is not where the hundreds of trillions of dollars worth of wealth will come from. The big will not control it all like under the present economic system. Rather, the explosive growth will occur when there are millions of tokenized systems, representing everything from a local community to a fanbase of a club to an online hobby group. This will compliment all that is taking place in the traditional asset realm such as real estate, companies, and intellectual property.

History shows us what innovation can do for humanity. Much of the explosive growth over the past couple decades is due to the Internet. This medium allowed people from all over the world to provide opportunities that once were relegated to the largest institutions. Today, one with a laptop in a bedroom can create billions of dollars worth of value in just a couple years.

The greater the abundance we have, the more it expands. This applies to every area of life. We are seeing massive progress in computation, memory, communication, and economics. The later is being driven, in large part, by the advancements in the other areas.

Tokenization is a means to start tying many things together. 2020 saw a great deal of development. We also are watching many start to pay attention to what is taking place. Alas, like the Internet a few decades ago, most are still not aware of what is here.

Our progress is accelerating. This is natural and follows well established technological trend lines. The tokenization of everything is spreading.

The next 12 months should see a massive jump from where we are now. Web 3.0 is a multi-decade progress that is already unfolding. The rest of this decade will see this concept penetrate every area of human life.

Society is facing a radical shift. I surmise that we will not be in the same world by the end of this decade as we are today. Tokenization is going to have a lot to do with it.

We are only beginning to see what we can tokenize. This understanding is about to unleash billions of dollars in economic value.

The tokenization of everything will ultimately benefit everyone.

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