What Banks And Others Are Missing About Crypto Transformation
Elon Musk gets it, at least in part.
The rest do not appear to have any clue what is taking place.
Not Just Another Asset
The world is treating cryptocurrency like it is just another asset. They buy and sell it like any other. Governments want to regulate it using laws believing it is just a newer version in a long line of securities.
Unfortunately for them, this is not the case. In fact, this is much bigger than that.
Here is what is happening:
Cryptocurrency is not another asset to invest in. Instead, every asset will become cryptocurrency.
If we wanted, we could substitution the term digital assets. Either way, the point is clear. This is going to consume the entire financial world. The fact that countries are talking about Central Bank Digital Currencies (CDBC) shows where things are heading.
Here is the first major blunder that people are making.
Tokenization allows for the capture of just about anything. This is a radical different from the existing financial system.
Let us take a company like Netflix.
These are the two layers that exist in the financial arena.
What about the social layer? The customers and other stakeholders with Netflix? The is no way to monetize that level until tokenization is implemented.
The social layer is captured in a token. This is where the userbase can interact and gain a financial benefit. Of course, few are talking about this since it is overlook. This is the second blunder.
Here is where the big money can reside. While the equity markets are huge, the social layer of some of these companies can be worth a lot more.
What is more social than social media?
From this perspective, what is the social media that most companies, including financial institutions utilize?
They have a department which handles their activity on the major platforms, ensuring the company is engaging with the public. This is a fine use of it, in a Web 2.0 world.
Things are changing.
What Elon Musk realizes that no other CEO in the financial arena seemed to notice is that social media and finance are merging. The fact that Musk set a goal to become the largest financial institution in the world should be a wake up call. Notice he didn't mention YouTube or Facebook.
Tokenization puts this concept on steroids. Musk is immersing himself, at least from outer appearances, in the Web 2.0 world. This appears to be the opening for alternatives.
Web 3.0 is a multi-technology conversion that will change society. Within this is Web3, something that we are seeing formed with blockchain and cryptocurrency. It is also what the world appears to overlook.
The social layer is worth trillions. It is something that will be captured through tokenization. What happens when all that value resides in assets that can be openly traded and carry a market price? How do things change when infrastructure is put in place that enables people to collateralize these assets and utilize them for the funding of other projects?
Do you see what this can potentially affect?
Some sectors that will be under attack:
- brokerage firms
- depository institutions
- venture capital funds
- mortgage brokers and lenders
- investment banks
We can even extend this to things such as art galleries. FinTech has altered the financial system. The major impact, so far, was new players disrupting things while the banks incorporated a lot of the technology.
Tokenization completely upends this.
Where are the social media aspects to companies?
What is the difference between a technology company and everything else.
A non-technology firm operates within a particular business sector. They are in retail, automotive, or shipping. Technology companies, on the other hand, can target any industry they want. Have you noticed how Apple and Amazon started to stream sporting events?
There is no limitation to where technology can travel. Money is not fully technological. The introduction of bitcoin altered everything because it started the process to a technology that not only affected the ledger but also completely altered the monetary system. This is going to extend into all niches of the financial system.
Remember, at some point, all assets will become cryptocurrency.
Much Bigger Than People Think
The cryptocurrency transformation is much bigger than the average person thinks. This includes most of those working within Wall Street firms.
If I was running one of those companies, I would start setting up a social media platform under my company's name. Why? Because this is going to be the feeder system for the entire industry. Over the next decade, this aspect of our lives is going to expand. While the social media platforms will change, the idea of people assembling in the digital realm is going to continue. Consider what happens when we enter some mixed reality with, perhaps, full immersion Metaverse.
This is what Web 3.0 is really about.
Yet, for the time being, people are looking at the green sprouts coming out of the ground believing it is just another tree popping up. I can assure everyone, this is like nothing seen before.
In the past I put the value of cryptocurrency (digital assets) in the quadrillions. When we add up what is out there, factor in the social layer, have increased in all assets, and tradeable markets, the numbers will get insane.
This is not as straightforward as people think. At the same time, the tentacles of disruption are much wider than being advertised.
Posted Using LeoFinance Alpha