Technology is a hungry bear and it takes a lot to feed it.
We live in a technological age, more so than at any other point in human history. As we advance forward, we are only going to see this situation accelerate.
Technological breakthroughs do not magically just happen. Innovation requires a lot of effort on the part of companies and individuals. It also needs money, lot of it.
This is something that is often overlooked in our world today. Since we have so much going on, we are continually having to feed this beast. The technology bear is large, meaning it takes a lot to satisfy it. As we move further along, the appetite is only growing.
Any entrepreneur is cryptocurrency knows that developers are expensive. Creating software is not a cheap proposition. While this will not rival the GDP of Ecuador, anyone who has to pay these bills knows they add up.
Marc Andreesen said that "software is going to eat the world". If that is the case, how are we going to feed all these software developers?
Of course, that is just one facet. Can you imagine the bill that companies rack up for machine learning engineers? How about for rocket designers and scientists? Everywhere we look, at the center of technology, are a bunch of smart people who cost a tidy sum.
There is also prototyping as well as experimentation. SpaceX blew up another Starship last week. How many tens of millions of dollars goes up in flames each time they do that? Keep in mind it is not the first time this happened. In fact, it occurred with each Starship they build. Call it the cost of progress.
Unfortunately, that cost is going up. When we consider the internet of energy, bio-tech with all its facets, quantum computing, and the construction of the entire Metaverse, we are looking at tens of trillions of dollars. Those are just a few of aspects of the technological beast that is going to need feeding.
So where is all this money going to come from?
The obvious answer is the Central Banks. Since they are printing like there is no tomorrow, obviously they are going to provide enough capital to fund whatever is needed.
On the surface this might look plausible. However, the reality is that the central banks, along with their political counterparts, are just creating debt. This means that the cost of servicing is increasing, even with low interest rates. Ultimately, this siphons the money away from the productive aspects of the economy and funnels it to the rent-seekers, aka parasites.
Over the last decade, we saw the growth of the global economy fall behind while tens of trillions of dollars in "stimulus" was generated. The recent increase in this is being done as the global economy looks like it is contracting.
When more money is going to debt, especially government, we tend to see a poor return on investment. This is precisely what is taking place at the moment. Unfortunately, since we are in "eternal easing", this situation is not going to change.
It is also a situation that sees the bear starving. While it would appear we are spending plenty of money on innovation, the reality is we are falling behind historic trendlines. Too much of our economy now concentrates capital on unproductive aspects. For example, we see hundreds of billions of dollars being funneled to zombie corporations, money that could be used elsewhere.
Here is where cryptocurrency has the ability to step in and solve an ever expanding problem. Since the present system appears to be maintaining course, a change is needed. Cryptocurrency has the ability to fund what is needed to re-ignite the innovation curve.
Cryptocurrency offers the ability to remove friction from the system. By offering the ability to easily get money, we could see a massive build up in innovative ideas that are pursued. This is obviously going to start small but could accelerate as the industry get bigger.
At present, we have roughly a $1.6 trillion market cap. That is a lot of money. We saw the first major, non-Wall Street corporation, Tesla, buy $1.5 billion in Bitcoin a couple months back.
This is helpful since Tesla is one of the innovators right now. As that $1.5 billion grows, it can be collateralized and leveraged for more productive purposes. It is helpful since that is almost the amount that the company spent on R&D in 2020 ($1.491 billion).
We can see how this works. The more value that cryptocurrency has, in total, the greater the amount available to fund projects. Anyone who is building within the cryptocurrency world knows that it is easier to finance projects now with the prices going higher.
What happens when the crypto industry is worth $10 trillion? Or $20 trillion? Remember, this is not debt so there is nothing to pay back in the formation of the currency. Distribution takes place from the blockchains without an IOU being attached to each token.
There will come a day when we see medical, AI, or quantum research funded through cryptocurrency. Since we are dealing with a technology, as that follows the exponential curve, there will be a lot more resources available to invest in these productive fields. No longer will a growing proportion of the economy be sucked out by the parasitic rent-seekers.
Viewed this the technological innovation lens, it is easy to see how sick our present system is. The misallocation of capital is destroying our forward progress. How come most are questioning why we have abysmal economic growth in an era of unparalleled technological advancement? That is a huge warning sign that something is amiss.
Since this went on for so long, we are looking at a patient who is terminal. There is no way to restore health. That is why many feel it is vital to construct an entirely new system, one that is removed the bankers (and other parasitic entities) from the core of the system. This will provide a better allocation of capital which is desperately needed.
The timing is ideal because the innovators are in need of tens of trillions of dollars.
Fortunately, we are building a system that can provide it for them.
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