People do not realize how big cryptocurrency will become.
This is going to be the greatest wealth generator in the history of humanity. We are going to see numbers that simply astound people.
To say we are embarking upon the Age of Abundance is not an overstatement. The value created through an assortment of technologies will be captured by cryptocurrency. Essentially, this is going to gobble up every asset class.
Here are the 5 reasons why cryptocurrency will be worth quadrillions
1. Real World Assets
We can almost reach $1 quadrillion when the tokenization of real world assets takes place.
Humanity already achieved a great deal. When we add up the value of all markets, including real estate, we are well into the hundreds of trillions of dollars. This is going to be a major shift.
There is already discussion by the major financial firms of using blockchain for this purpose. The tokenization of something like real estate will lead into hundreds of trillions in value converted over. Smaller experiments took place, a process we can expect to expand.
Stocks, bonds, and derivatives will all undergo a similar transformation.
2. Reduced Extraction
The present financial system is filled with companies that do little other than extract value. While they might perform some basic services, it pales in comparison to what is removed.
This alone will generate trillions in value as it process is streamlined and these entities are removed from the process. The ability to transfer value on a peer-to-peer basis is a major step forward. It is actually revolutionary for the digital realm. Now longer is a 3rd party required.
Applications are going to provide a large number of services normally handled by companies. They will do it for a fraction of the expense, further driving down the cost of transacting. Ultimately, this allows for more investment and funding of projects that actually generate a return as compared to lining the pockets of entities that positioned themselves in the middle of everything.
3. The Social Layer
This is one of the most crucial elements to this transformation.
We basically have two ways of investing: buying equity or debt. For most, it is either stocks or bonds. It is a discussion that occurs on the mainstream financial networks regularly.
What happens when we add a third layer?
This is what happens with "social" tokens. When capturing the engagement, interests, and activity of individuals, we are entering a new realm. This is all quantified by the market activity which tracks the growth.
One of the most obvious is to look at a corporation and its "fanbase". This could be Tesla, Disney, Apple, or Macys. We then can isolate it to specifics such as a particular movie or product.
Whatever the interest, we can have tokenization. This can extend to hobbies. Those who are involved with cooking, knitting, woodworking, or basket weaving can enjoy the benefits of tokenization.
Of course, the ultimate comes from sports fans. We know how rabid these people can be. What about a token related to Real Madrid? The Los Angeles Lakers? New York Yankees?
What is this worth?
It is something we are going to find out in the future. However, we are again dealing with trillions in value that already exists.
The difference is monetization.
4. Web 3.0
This is another factor that is going to change society.
The concept can go by other names such as Industrial Revolution 4.0. Whatever it is called, the idea is clear: technology is going to, once again, alter society.
Web 3.0 might include many potential technologies. Some examples are:
- AI/Robotics
- Quantum Computing
- Blockchain/Cryptocurrency
- Biotech
- Nuclear Fusion
- Nanotechnology
- Mixed Reality/Metaverse
We naturally have no way of knowing which of these will become part of our everyday lives. The point is we will see a convergence of a number of innovations that move society in a different direction.
All of this could send economic output skyrocketing. This harkens back to the idea of capturing the value. Again, tokenization can enter the picture.
Let us take robotaxis. What happens if these become the standard? Who will own them? What will the structure look like?
A simple design could be the tokenization of each taxi, allowing for individuals from all over the world to own a portion of it. This is not something that can occur under today's system with any efficiency.
Also, for a variety of reason, much of this should be tied to a blockchain. We are looking at the ability to weave decentralization throughout many of our system. This is crucial when dealing with security and resiliency. Certainly, not everything will be housed here but there will be a large portion of activity tied to blockchains.
5. Enormous Sums of Money
This can be phrased a few different ways.
Basically we are talking about the ability to fund trillions of dollars in research, expansion and growth. This can come from money creation or, as we often discuss, collateralization.
Go back to the robotaxis idea for a moment. Where will people get the resources to invest in these? Most likely it will come from the tokenization of another aspect of their lives. It could be the ownership of pages on the Internet, i.e. digital real estate, payouts from staking, or compensation for some activity.
At the same time, perhaps the money is garnered by taking out a loan against a token or coin that is owned. Here is where billions can be participate in the financial process.
Ultimately, most can become venture capitalists, helping to fund further technological progress. This can, naturally, spread to all areas such as medial research.
When value is captured and monetized, it can be used to generate more value. As noted above, much of this is presently being lost such as with social layers. Unless it translates into sales of goods or produces more advertising money, it is lost.
Tokenization alters this completely. When the value is captured it can be used for further expansion, resulting in even greater value in many instances.
The Golden Rule
Wall Street looks at cryptocurrency simply as another asset class. This is not the case.
The Golden Rule of crypto is as such:
Cryptocurrency is not another asset class. Instead, it is what will eat every asset class.
Over the next couple of decades, we are going to see individual platforms worth tens of trillions of dollars. In a world where networks are abundant, consider what the numbers can look like.
Actually we just did: they will be in the quadrillions.