Blockchain is creating a new world. It is enabling a foundation to be laid that will disrupt almost every industry. Existing power structures and institutions are all going to be replaced. We are seeing a complete reversal of what took place over the centuries.
The innovation behind blockchain is truly powerful. With the forming of Web 3.0, society is going to operate on a different realm. We will see entire governance system erected that we never thought possible.
One of the biggest innovations is that money is native to Web 3.0. Unlike the rest of the financial system, both physical and digital, money was a construct that was built on top of the base layer. Even the original Internet was missing this from its protocols. It required the addition of an ecommerce layer tied to fiat currency (PayPal for example).
The biggest transition is that networks are being replaced with markets. We live in a world that is run by networks. Religion, social media, nations, and mobile are just a few of the networks we see. Many of them are controlled by corporations who has the winner take all mentality.
Many networks are closed. Some are open but they tend to not be based upon merit. Instead, they are run by elites such as with the University and banking "networks". Power comes from connection in many instances as opposed to what one contributes.
Money is also a network. We see different currencies around the globe where people gather around. This is often based upon geographic location but not always. Whatever the currency, a network forms with people constructing a host of other applications (businesses) around said currency. Other interact based upon an agreed upon set of rules. Of course, there is an overseer, usually the elite who run some of the other networks.
The Internet offered something different. It has the promise of altering how networks were run. This was the opportunity to shed the elites.
To a degree, this was accomplished. The only problem is mob rule resulted. Without an adequate system of governance, the entire system was ripe for exploitation. Ultimately, the secondary layer of ecommerce took over, meaning the corporations assumed control. Even at its base layer, the Internet, like all networks of this nature, lacks efficiency.
Market networks are the most powerful ones in existence. They operate well where money is committed. These have the ability to take out governments, cartels, and anyone else who tries to temper the results. Stocks, commodities, and credit all come under this heading. They have a perpetual voting system that is always in action.
These type of networks are open and based upon merit. Blockchain allows this all to be brought together. Since there is a native currency, the dependence upon outside money is eliminated. This removes the manipulation that is often associated with that realm.
At the same time, it negates the power of the existing institutions and entities. Payouts are dependent upon what is provided to the network. This is a different kind of merit. On Bitcoin for example, people are rewarded for securing the ledger. SIA pays to used storage for its decentralized network. Auger compensates for predictions.
In other words, people are rewarded for advancing the network. Mob rule is eliminated due to the monetary component that is native to these systems. Each market has its own set of rules that all participants abide by.
Credit markets, for example, reward those who effectively used credit in the past. At the same time, those who abused it are penalized by the markets. The monetary component means the later pays a higher rate than the former.
Oil markets operate outside the cartels and other power brokers. While OPEC can wield a great deal of control, markets still supersede this entity. Regardless of the power, markets often disregard what the power brokers want. OPEC cuts production yet prices still go down. How does this happen? Those with skin in the game, i.e. playing with money, decide something outside the context of what OPEC wants.
This is why markets are their own entities.
Blockchains operate according to the same mechanisms. Each network chooses what it rewards. Those who are helping the process forward, according to what work the blockchain wants done, get rewarded. Thus, it combines the openness of the Internet with the merits of markets. It replaces the governance of kings, elites, mobs, and governments.
Networks create some of the most powerful people in the world. Mark Zuckerberg runs one of the biggest networks we ever saw. His reach is incredible. Unfortunately, this is subject to abuse. Facebook has committed a host of activities that are counter to the users of the network (and humanity in general). However, it is capable of continuing this since it is a network, subject to the control of the Facebook elites.
Markets are beyond control. They can be manipulated at times but, ultimately, they will break down if it continues. There is a self correcting mechanism built in.
The Network Effect makes companies very powerful. Facebook, Google, AT&T, and the banking system all were able to leverage this concept on their way to substantial power. The backlash against all of these shows how powerless people are against networks. They complain and fret yet still are stuck using those services.
Markets, on the other hand, do not create the same power structures. While there are temporary winners, that can change in a heartbeat. Some of the biggest losers in markets are those who played with the most. Markets do not gain from each new participant. They operate based upon the choices by every single individual involved. It is a true meritocracy. Play the market properly, and one benefits; operate on the wrong side of things and pain results.
Blockchain has the power of network effects. This is what will allow for the incredible growth in value. Web 3.0 is going to create numbers we never saw before.
However, it also has the market effect in play. The monetary component of a market is always in operation on each decentralized blockchain. No matter what the system, moment-by-moment voting takes place by the decisions of all individuals involved with the market at that time. Over time, people are entering and exiting based upon their individual whims.
Markets are highly efficient. The present real time information for people to make decisions. When market conditions change, i.e. the allocation of resources (money), people have options. What they do is dependent upon how well they read what is going on.
Bitcoin miners have to alter their behavior based upon the price of that token. The currency is trading 24/7, 365 days a year. It goes up and then it goes down. Depending upon the price, miners need to decide whether to expand operations or condense them. This is not dependent upon a policy change or edict from somewhere. The market says where the price is and each adjust accordingly.
Markets often force people out.
Networks tend to remove choices. As they get bigger, monopolies ensure. Markets keep offering up options. Stocks, bonds, real estate, commodities, Bitcoin, art, used Mustangs, and baseball cards are all markets that are open and in operation. Some are not liquid but they do exist. Anyone is free to enter or exit the market as he or she sees fit.
Web 3.0 having money as native to the system shifts everything. The original intention of the Internet changed since this point was omitted from the initial protocols. Hence, we see a system that is wrought with a ton of abuse, both by giant corporate entities and individuals.
For example, there is no penalty for trolling on the Internet. People post what they want without any payback. Sure, there are times when public figures post something that hurts them but that is an outside matter. In terms of the network, there is little to no penalty.
With markets, there is always feedback. Those who go against the tenets of the market end up paying a price. Again, abuse the credit markets and one suffers with higher rates or, perhaps, being cut off from credit. The market determines how it treats individuals and companies who are operating there. Companies with heavy debt loads who are using it to survive understand this when they are paying junk bond rates for money.
Web 3.0 is going to monetize everything. We are seeing a convergence of our physical, digital, and biological worlds. All is going to be operating on a market dynamic. Hence, there will not be the controlling entities we see today. Success is going to depend upon how one interacts with the market dynamics resulting from the tenets of each market. As blockchains grow and evolve, people will be afforded opportunities to participate in whatever arena they want.
Over the next decade, we will see billions of people accumulating all kinds of different cryptocurrencies. As the number of networks expands, people will be deciding with their money what they support. Those with influence on individual blockchains will find how the system is not set up for power and control when it is suddenly wrestled away from them by the market. A growing chain could see a flood of new entrants who are able to alter the market dynamic from what it was. Distribution can change rapidly when the numbers start to show up.
Watch any market to see the pace of change when either a ton of buyers or sellers enter. This can move very quickly.
Web 3.0 will turn everything into data. We know the market for data just keeps growing. Hence, everything will have a market in the future. Blockchain is going to allow us to own said data and swap it for what we want. This is something very radical.
It is also very powerful. The monetary expansion we are going to see due to increases in value is truly mind-boggling. Distribution is going to take place across all aspects of society. Markets are going to enter areas where networks cannot reach. As billions are accumulating, Web 3.0 will be a continual ebb and flow based upon the reactions of people to what is taking place.
Fortunately, we are already starting to see this shift take place.
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