The Growing Value of Cryptocurrency
We see many projections of how much the market cap of cryptocurrency can be worth. To many, the numbers tossed out are absurd. There is still a large percentage of the population, especially those from the financial arena, that believe cryptocurrency has no value.
Sadly, this shows how little people really understand what is taking place. They failed to learn the lesson of the Internet and how things can radically change. The next 50-100 years will see a complete transformation of human society. This is something that most are totally unprepared for.
Cryptocurrency is more than a monetary system; it also quantifies things. While not perfect, market mechanics, over time, reflect the value that is created.
Digitization And The Internet
We know the Internet is becoming a central part of developed countries. With more than 5 billion people online, this is spreading to all parts of the world. Within 3 years, it is expected most of the planet will have access to this technology.
It is also evident how this medium changed a bunch of industries. There are companies that no longer exist simply because the Internet offered a better solution. In fact, the United States Post Office encountered serious financial difficulty due to the fact that email replaced a large portion of physical correspondence.
Of course, the amount of information that was transmitted back and forth exploded. This is something that cannot be calculated in terms of value. Nevertheless, we can surmise that trillions in economic benefit were derived from this single technology.
Cryptocurrency enables us to quantify how much value is being derived. The market can decide what something is worth. Over time, as more use cases are opened, the expansion in value increases exponentially. This is what we are seeing with the entire cryptocurrency market.
So far, the present internet has created tens of trillions of dollars in value. While it is impossible to get an accurate valuation, we know that the largest companies in the world leverage this for high profitability.
What we are going to see with Web 3.0 is going to eclipse what took place so far, by many orders of magnitude.
Thus, when we think about it, the $2 trillion market cap presently applied to cryptocurrency is rather low. There is going to be enormous growth taking place over the next half decade.
Hundreds of Trillions
As technology advances, it solves larger and a great number of problems. Therefore, the economic impact is ever expanding.
We saw how the first iteration of the Internet, called Web 1.0, served some purpose. It made the acquiring of information easier. It was static and rather boring, yet it did provide a solid foundation for what would ensue. At the same time, there was an economic impact as people were able to do some basic online shopping along with more advanced communication.
Web 2.0 moved things further along. It allowed for the emergence of companies such as Facebook and Twitter. We also saw the massive expansion of Amazon. This moved us from text based to video and audio. Shopping, communication, and entertainment all changed.
Here we can see, even without concrete numbers, how the economic impact of Web 2.0 far surpassed that of the first iteration. This is in keeping with technological progress. Whereas the first stage of the Internet might have been worth trillions, the second was worth tens of trillions.
What do you think Web 3.0 will generate in value?
Based upon the trends we see, it is easy to understand how this will jump into the hundreds of trillions of dollars. In fact, we should not be surprised if this actually gets into the quadrillions.
This is a long way from the "no value" that many proclaim.
Cryptocurrency is a Technology
We are still in the early stages of cryptocurrency. While this is important from a financial perspective, it is even more imperative from the technological one.
Cryptocurrency is a technology. This is a new innovation that is still in the primitive version. Think of this as Cryptocurrency 1.0. We are just starting to experiment with the possibilities.
Understanding technological progression means that, as more development takes place, we see newer ideas that surpass what went before it. This brings up more use cases, increases the economic outcome. Since this technology has a market traded value, we can see how rapidly it can factor new innovation in.
Let us take the example of @podping. This is a simple program that is going to have enormous economic impact.
Here we see a project that takes the indexing of podcasts and ties them to the Hive blockchain. Through this process, podcasting hosting companies can update their feeds within a minute. This compares with the day or two for Apple™ using the present system. At the same time, computer resources are drastically reduced since the hosting companies aren't having to constantly scan RSS feeds.
How much is this single service worth? Again, it is hard to place a value but consider the fact that millions of dollars in server costs can be eliminated. That is a direct savings. Then we consider the fact that podcast indexing is now decentralized and cannot be censored by the major entities such as Apple or Spotify. How much value does that bring to the table?
Of course, this is a single application designed to solve one problem. If we extrapolate this out over millions of different issues, we can see how things can grow exponentially.
When viewed through the lens of how much the Internet changed things, we can see the next generation is going to affect so much more. Ultimately, Web 3.0 is going to change everything.
There will be no industry that is left unaffected. In a few decades, the way things are done will not resemble today. What we are doing today will seem archaic compared to the daily use cases in the future.
One of the biggest transformations we will see deals with custody. Blockchain is altering how assets are owned. The value that is contained in them is now often subject to the trust of a custodial agent. Blockchain puts custody in the hands of the individual. There is no third party required for this.
Consider how the idea of programmable money penetrates all we do. At the same time, value is, for the most part, traded on public markets. Therefore, we can look at it like this:
In the medium term, we are going to see real estate, research, charity, intellectual property and so much more tokenized. This is going to provide enormous value to each of these sectors.
Simply looking at cryptocurrency from the financial perspective is missing most of the equation. It is better to concentrate on the fact this is a technology, hence is subject to the expansion curves that other successful technologies follow.
Cryptocurrency is, at its core, code. This is something that can be duplicated and expand at the speed of the digital world. It is much faster than anything in the physical realm.
It is not hard to figure out the value software carries. Hence, it is likely that cryptocurrency, in general, will follow a similar path. This will be the basis for most online activity in the future.
Here we can see how the value of cryptocurrency will keep growing in value since it is a technology that is only expanding.
It is also something that cannot be stopped.
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