The Blockchain Revolution
History has very few instances that can be compared to the technological revolution unfolding in front of our eyes in the blockchain technology department. These rare occasions offer some similarities but have little else in common. These #innovations happened based on the utility they provided and not the technology itself.
A common theme among these innovations is that they are all still in use today but provide rails of utility which make them useful. The #technology itself did not solve the dilemma it was the rails they sit on and exploit.
Utility The True Innovation
The first of these innovations we must discuss has roots from a much earlier era dating back as far as 600 B.C. It was not until 1804 A.D., though, that it revolutionized the world through the utility it provided. This utility quite literally laid the rails that propelled the industrial revolution forward and interconnected large parts of the world in ways today we likely take for granted.
Imagine waking up tomorrow and being transported back to 1803. You would wake to an entirely new world which lacked the ability to send large amounts of goods easily and efficiently. Forget about crossing borders, just shipping 10 tons of iron ore to the neighboring town becomes almost unfathomable.
Enter the [Penydarren[(https://en.wikipedia.org/wiki/Penydarren) or “Pen-y-Darren”. Built-in 1804 it was a steam-powered locomotive and was built to haul iron from Merthyr Tydfil to Abercynon, Wales . The first train carried a load of 10 tons of iron and opened the door to many of the luxuries we enjoy today.
What is unique about this revolution is the #utility it provided. These Rails once pioneered and laid, allowed entire industries to be built around its utility. One's world expanded exponentially and people could now touch and affect parts of the world they had only dreamed of. This was entirely unimaginable prior to this revolution. What is more unique is this industry did not just create its own value but created enormous value worldwide via the industries it interconnected and the commerce and trade it started to feed.
This unique situation raises some interesting questions. Let's start by asking a very simple question. How can this utility truly be valued?
Valuing Utility
In honest term,s we can not even comprehend this answer due to the vastness of industries it changed and supports even to this day. Our lives depend on millions of products shipped on these rails. Our jobs depend on them, and so does the delivery of our food. The value this one industry has created is unfathomable.
A quick look at the numbers is actually quite impressive, with one of the largest of today's railroads posting a market cap of 86.8b dollars. While it is a very large number, when you think of the underlying utility it has created it is minuscule. The average daily movement of goods via train in 2015 was roughly 49.3 million tons with a daily value of $52.5B. This translates to an estimated yearly movement of $19T of goods from an industry that has a market cap that is much smaller in comparison.
When you take this number of good and apply it to all the industries it touches you realize how massive the equation truly is. The massive utility driven by the innovation of the Penydarren was only made possible by the rails it sits upon. Truly calculating the commerce it has created worldwide becomes a daunting project that swallows entire sectors.
Innovative Utility
There are new industries which have created additional rails that leverage new innovation on a greater magnitude. Phone lines are the rails of the phone company. Roads are the Rails of the auto industry. The internet hosts the rails of this biggest technological revolution to date. If you follow each of these innovations through their progression you will find the underlying utility it provides cannot be supplied by the market cap of the industry itself.
So how does this relate to today?
New Innovation
There is a great debate waging over a new revolution. One so great it rivals the Penyddarren. It is built on the back of the internet and creates the rails for what some have deemed the (I.O.V) or Internet Of Value. The #IOV will allow money to move as information does on the #internet with a built-in level of #security that is unrivaled. Imagine money moving across borders as email moves throughout the world today.
There is an Important take away here which many have likely missed until this point. You can not actually calculate the effect these rails have provided to the market. There are too many variables that are entirely untracked or completely unknown. Take roads for an example, how do you track all the industries they affect? People going to work, mail delivery, trucking, and transportation the list goes on. The true market cap of these rails are ginormous and affect almost every industry in virtually every sector. Calculating their true affects are Impossible which means there is a market cap there that is nearly impossible to fathom.
DLT And Blockchain
What is more interesting here is the internet of value can actually start to automate this entire process. Through the use of what is referred to as D.L.T. or Distributed Ledger Technology (blockchain) tracking these previous innovations can be completely automated. We are years away from having a society that can fully embrace #DLT and realize its full potential but the rails are being laid today by forward-looking companies like Ripple and it’s use of the #XRP ledger.
This is actually where it becomes interesting. Ripple is a company and historically through accounting practice, a company’s market cap is easily identified and calculated. Xrp is a utility, and like the above innovations, calculating it’s true market cap moving forward is nearly Impossible to measure. Yes, you can say there are 100b tokens valued at X amount of dollars to arrive at the market cap of what those tokens are currently worth. The true value of these tokens, however, should be measured by the utility it provides and is currently unmeasurable as we have not realized all it will encompass.
Valuation
Like utilities of the past, knowing how this current revolution will affect each of the industries it touches walks us quickly into the unknown. This particular innovation can easily add value to the above-listed utilities (rails) by automating the tracking of each thus multiplying their effectiveness and benefits to society as a whole. This further complicates the equation as the rails of our earlier innovation and their full potential have not been realized. This is due to Inefficiency of the accounting processes, documentation, and payment protocols currently in use today. The automation of said practices will streamline these already life-changing innovations.
We are on the cusp of a new technological revolution that will embrace the prior ones and propel them forward by creating efficiency’s that were never possible before. If you live in the mindset that these utilities are limited by the market cap’s we traditionally apply to business, you will likely be limiting your ability to honestly seek the true value they create. This will lead you to a lower valuation of said utility and likely cause you to miss the exponential upside that has historically not been investable assets.
For the first time in history, we have the ability to own these rails and not just invest in the companies that historically created or control them. We have entered into an unprecedented time which appears to be a crossroad of economic efficiency. The question now is will you limit your investments through historical precedence? Or will your eyes open to the future potential on the horizon?