Many talk about creating money out of thin air. This is, after all, a social construct, something we created to replace barter.
That said, we are embarking upon a new era where digitization has come to money. Certainly, this was the case decades ago, yet we were dealing with a closed system. The introduction of Bitcoin opened up the doors to anyone with some coding skills. This means that money creation was in the hands of a wider group of people.
A decade later, we see this at an even higher level. Through the ease of use, we now have the ability to great assets on many different chains. This often requires little computer expertise.
While the focus is on money creation, what often gets overlooked is value capture. This is something that is going to be explosive going forward. When capturing value, we see not only is that which was lost monetized, there is also the potential for further growth.
This is what Web 3.0 is all about.
In this article we will look at it and how a blockchain such as Hive could end up being transformative.
Some have termed this the social layer.
If we think about most companies, financially there is equity and debt. These are the two assets people purchase when getting involved in a company. Both are monetized with stocks and bonds being the common form. Here we can see how value is given to the company.
But what about the social layer. Every company has value there. A company like Tesla has enormous social value as evidenced by the "fanboys". The same might not be true for something like Home Depot.
What about the value created by those entities that are not revenue generators? For example, what is the value of those who volunteer time to work with the elderly? By the same line of thinking, what is the value of sharing information that is vital to many people?
None of this is captured under the current system. We see how there is a lot of value lost. If we couple that with the ability of the financial system to leverage that to even greater levels, we see how a lot of economic productivity is being sacrificed.
Some might wonder what I mean by this.
Let us take the idea of helping the elderly. This is really an activity that is done for altruistic reasons. Without pay, this is non-compensated efforts. Other than the feeling and good will one receives, little else is given.
Of course, there is productivity here. So what can we do to capture this? Tokenization is naturally the answer. If there was a token tied to the volunteering to assist the elderly, now we have the capturing of value.
Something like this that is freely traded would have a market price. Suddenly, we have an asset that could be used as collateral. This enters us into the financial realm. Perhaps these tokens could be used to finance the start of another business.
Here we see how lost value is captured and turned into a potentially economically productive asset.
That is capturing value out of thin air.
Hive is a unique animal even within the cryptocurrency realm. The fact that it is focused upon social media reflects this sentiment in this article. We know that online activity has value. The question is what is being captured?
Clicks and data are the two things that stand out. Entities such as Facebook and Twitter are known for selling advertising and data. In fact, both are tied to each other.
But what about the value of the interaction itself. Outside of the clicks, is there any value? I believe there is yet it is not captured on those platforms.
With tokenization, this becomes a possibility. Whereas the activity surrounding sports versus basket weaving is the same on Web 2.0, it carries a different meaning on Web 3.0.
Over there, a click is simply that. On Web 3.0, the community has the potential to be an economy. Thus, we have factors of dedication, size, marketability, and distribution. On Instagram, it is only the posts and activity on it. The platform doesn't care about the content or what it is tied to.
Within the world of Web 3.0, and we see the foundation be laid with Hive, there is a different structure that takes place. Once a community (or group) is tokenized, it can operate under a different framework.
Suddenly, the value of the social layer is captured. People are free to build around that community as they see fit. Over time, if the group is successful, we will see the value of the token appreciate. This creates access to even greater economic resources, furthering the potential impact.
It all ties in together.
Here we see the ability to capture hundreds of billions (if not trillions) of dollars in value. The present system is completely overlooking this. The loyalty of the Star Trek fans (Trekkies) is more than the merchandise they buy and new films they see. Outside of economic activities like that, it is not realized.
With a token is it.
Now consider all that has a following. Take a second to ponder the loyalty that is exhibited. Sports is a prime example of this. Other forms of entertainment can also apply.
Basically, we could see a situation where the social layer is worth more than the equity of a firm. While the latter is based upon revenues and profits, the former is simply dedication. We know how this can get insane.
To give one more example, what is the value of the fanbase for 'Bama football? It is seen in attendance at games and things purchased. There are also broadcast rights. However, a token of this nature could have a market capitalization into the hundreds of millions of dollars.
Not multiply that across all college football programs in the United States.
Can you see how big this is? When talking about capturing value out of thin air, we are simply garnering what is already there. However, by monetizing it, suddenly our fandom is worth something to us.
This is a very powerful concept and one that should be explored. Once it takes hold, it will spread like wildfire.
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