There are many correlations between the evolution of the Internet and cryptocurrency. Unfortunately, in my view, this isn't really the best of comparisons since cryptocurrency is merely an application built upon the "next generation Internet", also called Web 3.0.
Therefore, it might be better to compare crypto to the progress of email. Nevertheless, since we are dealing with things such as market capitalization, people are drawn to the parallels.
For that we reason we will indulge in a bit of speculation and look at where things are as compared to a couple decades ago.
It is easy to get lost in how long it took the internet to evolve. Most remember the DotCom Bubble yet forget the sentiment that was present at that time. When markets crash, obviously the attitudes are in the toilet. During that period, since much of the hype was surrounding internet stocks, we saw the outlook within that realm being completely abysmal.
Sound familiar?
The crash was leading some to believe this was nothing more than a fad. We saw hype to the point where it was absurd. Promises of a glorious future with incredible capabilities were promised. Again, does this sound like something we heard recently.
So what happened?
We know the Internet changed the world completely. While many of the promises were not delivered upon, what is available to us today is truly mind-blowing.
Therefore, all proclamations that the internet was a fad or that it was dead were very premature.
When we look at it from a financial perspective, we really see how underestimated the potential was. This chart was put out by [Architect Partners](file:///C:/Users/melbb/Downloads/Architect-Partners-Family-Ties-Report.pdf):
It is mapping the market capitalization of the internet (stocks) versus that of cryptocurrency. Notice anything similarities between the two?
What was the life of the Internet like in 2002-2003?
We know from history that it was in its infancy. Actually, even now, 30 years after the World Wide Web was introduced, we are still dealing with something rather immature. Nevertheless, we know that today's online activity is vastly more advanced as compared to 20 years ago.
Basically, we had two decades of evolution.
It is important to note that was build upon more than 15 years of development before the dotcom crash. In other words, these things take time.
Cryptocurrency, or rather blockchain, has to come of age. It is still in diapers and not advancing quickly towards walking. We still, according to the above chart, have a few more years of still trying to figure it all out.
As stated in other articles, the challenge is we are still lacking services. Blockchain is offering some wonderful potential yet is not really being utilized for much of anything practical. It is why so many are questioning the validity of Web 3.0.
For those old enough to remember, it was the same mindset many had regarding the Internet. It is good to remember that, during this time, Mark Zuckerberg was still in college. That is how embryotic it all was.
Today over 70% of the world’s population uses the Internet daily. Its value is undeniable in everyday personal and professional lives. Over $19T of value has been created over the past 28 years, driven by the existence of the Internet.
What do you think will happen over the next 28 years?
The final thought is to realize nothing in the digital realm is linear.
When it comes to value generated, we simply do not duplicate what went before. The $19T over the last 28 years is small potatoes compared to what is coming.
Today, we have a number of platform based companies that are worth over $1 trillion apiece. At some point, we are going to be discussing $10T organizations. Digital assets, i.e. tokenization, is changing everything. Why do you think the banks and Wall Street entities are so anxious to get involved? This is so disruptive it will upend their entire industry. The Blackrocks and Fidelitys of the world see this.
My view is this is an order of magnitude higher than what went before. Market capitalization of these types of assets are going to reach the quadrillions. The tokenization of everything assures that. We have value creation awaiting that we cannot even fathom at this moment.
In the late 1990s, the idea of a company selling online books would be one of the most valuable in the world was insane. Yet that is exactly what happened.
Blockchain based entities are going to realize values far beyond what we saw before. To achieve this, the industry needs a lot more maturing. Builders are required to provide services that people utilize. The age of speculation regarding the industry has to come to an end. Those who simply talk about price are going to get run over.
The Jeff Bezos, Mark Zuckerberg, and Serge/Brin types are before us. This generation will develop its new celebrities Internet billionaires (trillionaires?). The entities they create will make the Web 2.0 titans looks childish in comparison.
Cryptocurrency is the value capture mechanism.
For this reason, as the exponential nature of digital development takes place, we will see that reflected in the markets.
Do not be surprised if we hit the $10T in total market capitalization within the next 5 years, long before the parallel timeframe for the Internet.
Also, remember this the next time someone mentions how cryptocurrency is dead.
