The news of the week was the on again (after the off again) deal by Elon Musk with Twitter. It looks like, for the moment, it is going through. For this reason, we will presume that Twitter will be in the hands, at some point in the future, of Musk. It will only cost him and the investors supporting him $44 billion.
Many feel this is a massive overpay for a company who spent the last decade going sideways in terms of its stock price. Without digging into the financial statements, it is hard to know how the company performed. Safe to say, by looking at the way the market dealt with it, the numbers are not that impressive.
Here is where Musk needs a plan. Make no mistake, he is not entering this blindly. We also need to put to rest the altruistic, freedom of speech idea. He might value that. However, he is going to use this platform to make money. Even if Musk does not care about the money he puts up, his backers do. They want to be paid.
As mentioned in the past, Musk is part of the "PayPal Mafia". These were the tech billionaires who got involved with that company early on. For that reason, we can conclude that Musk understands payment systems. This is one of the main premises of the future of Twitter.
Billions In Transaction Fees
A few months back, Musk gave us an idea of what he is looking to do. It was widely overlooked by most since it really is not headline grabbing. Nevertheless, for those who are involved in Hive, this is something that stands out.
We know that fast and feeless is one of the important selling points of Hive. In fact, one of the main benefits to cryptocurrency is the elimination of financial intermediaries, entities that serve as gatekeepers for the world of finance. As a part of the "service" they provide, they rack up large amounts in fees.
It seems that Musk is going to take into this playbook.
There is little doubt that having a platform (application) with hundreds of millions of dedicated users provides a pristine opportunity to leverage that for greater financial gain. This is exactly what Musk is looking at doing.
Here are some numbers that are being tossed about.
His goal in 2023 is to have $45 million in revenues come from payments. This is a rather modest amount and, quite frankly, nothing to pay attention to. The challenge is that it is the starting point.
By 2028, Musk has set a goal of $1.3 billion. Now we are talking about some serious cheddar. If he can build the "Everything App", something akin to WeChat, he will have the standing to amass fees in the area he is targeting.
Of course, if we project out another few years, what do the numbers look like? Can he get that number over $2 billion per year? Either way, we could see the platform generating $10 billion in fees over the course of a decade.
Now we are talking about some serious money when it comes for the right to financially transact on Twitter.
Hive Tops This
Here is where Hive, overlooked by the entire world, is able to usurp the vision Musk has. As we know, there are no direct transaction fees on Hive. One only needs enough Resource Credits to send a transaction through. The advantage here is the fee is not lost. When one "spends" resource credits, they recharge daily.
On Twitter, @theycallmedan wrote that Hive is the everything protocol. Many of us are starting to realize that, as people like Musk and Jack Dorsey, discuss decentralized social media, they are really talking about Hive. While their goal is to build something they can control (and profit from), we are able to keep plugging along.
In the end, decentralization beats centralization (the subject of an upcoming article). The problem is we do not see this in the short-term. The benefits are further down the road. This is one of the reasons why Hive appears to be moving along slowly.
It is safe to say the merging of social media, finance, and commerce is the future. We saw some of this with the integration of marketplaces into applications such as Facebook. The reality is this is only going to accelerate as the idea become commonplace.
Here is where Hive is well positioned. Blockchain provides the distributed ledger to keep track of all transactions. By using cryptocurrency, the system provides built-in payments at the core. There is no need to integrate or construct this mechanism. It is standard to blockchain.
Thus, the challenge is to develop the social media applications. This is a concept that Dan Larimer wrote about years ago. His ideas was for social media to serve as the feeder system into the financial realm. This is becoming a rather standard vision with all that is taking place.
Actually, there is another layer to be constructed. Not only should the goal be entry into the financial realm but to create Wall Street on Hive. When you have a ledger based system, the services provided by the largest financial institutions can be constructed on top. Again, they are nothing more than glorified gatekeepers. Much of what they do can be built upon decentralized infrastructure.
Of course, this is something that Musk does not appear to be considering. As profitable as payment can be, financial services like what Wall Street offers makes those numbers look small. If Musk can target a billion in 2028, Hive can go after a trillion. When it comes to financial products via synthetic assets, we get into the realm of some very large numbers.
PayPal 2.0
Musk basically is trying to develop a more advanced version of PayPal. The issue is that a billion dollars is a lot of money. When we start to look at how much is being taken from people, to provide an automated service, we see how it is Web 2.0 all over again.
One of the premises of Web 3.0 is that the community benefits. If there are Web 2.0 characteristics, it is best to offer them with a benefit to the users. For example, Leofinance is running ads. However, the goal, by the end of the year, is to have those who stake LEO get the revenues from the ads. This is a Web 3.0 mindset.
Having the idea of generating billions in payment fees while sending that money to venture capital firms or banks is not in alignment with this. Here is where Hive now has a face of what to go after. Whatever Musk wants to create, we simply set out to top him.
After all, the basic infrastructure is in place. He has a lot of money and resources. However, does he have thousands of people willing to work towards that end?
With Hive, any success we have in this race ultimately benefits anyone who is holding or staking HIVE. Anyone looking at this should see how there is incentive both on the base and second layers. We have coins and tokens that will really benefit from us moving into the realm that Musk wants to occupy.
He wants to build the "everything app". Since we have the "everything protocol", we can build a couple dozen of these. On Hive, front ends can incorporate whatever else is on chain. At that point, it becomes a numbers game.
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