Cryptocurrency is offering enormous possibilities going forward.
Over the last 40 years, we existed during a deflationary super-cycle. Interest rates around the world have dropped from double digits to negative in many countries. Technology is creating an impact that is getting too large to notice. As we progress forward, our entry into technology is only going to increase. This is evidenced by the fact that we are beginning an era of digital expansion like we never saw before.
This steadily grew over the past few decades yet it was something that went unnoticed by the masses. Now, it is becoming crystal clear.
One of the most important aspects about money is that it is a tool for collaboration. At its essence, this is what money does. It allows people to interact and collaborate. Instead of using a barter system, money enables people to agree upon a unit of value and, thus, trade among themselves.
During the time periods I just mentioned, we saw a massive expansion of the money supply. This was really true over the past decade where the central banks doled out $23 trillion in "stimulus". Of course, this got people very nervous about global inflation especially in the USD since it is, for now, the world's reserve currency.
The challenge with all of this is the fact that global inflation was non-existent over the past decade. Sure there were certain pockets where it hit and different times where it reared its head. For example, after the oil collapse, we saw a run up in oil prices. Of course, this was more an attribute of the supply/demand issue than the monetary supply. Ironically, with rig counts collapsing, we are likely to see a repeat of this in 2021 where oil prices rise significantly.
@khaleelkazi hosts a weekly Tech Talk. This is a topic that was discussed last week and will be followed up in the next podcast.
One of the biggest challenges with this entire conversation is the fact that technology is accelerating. As it starts to consume a larger part of our economy, we see the deflationary pressures mount. This means that money is going to be required to fund all the technological expansion that we are undertaking.
Naturally, this becomes a very political issue. Monetary policy gets rather heated in public discussion even though it is under the domain of the central banks. President Trump made no bones about where he stood on interest rates and how he thought the Fed should proceed. In fact, he attacked the Fedsters the same way he does Congress people.
What this all means is that a lot of money is going to be required to fund the ongoing technological expansion of society. In other words, the money that is out there is already being sucked up. This will not only continue but the thirst will increase.
Thus, I maintain that if the current system is going to have difficulty due to its politics fulfilling the needs, eventually people will turn to cryptocurrency.
Of course, this is something ironic since the SEC has gone after the ICO craze, basically stopping that avenue as a means of raising funds. This is no surprise since that entity, like most regulators, operates in defense of the existing system i.e companies in control.
Think of the trillions of dollars that are going to be required to "build out" all the technologies that we are presently embarking upon. How much will it take to create the "internet of energy", a system where most consumers are also producers of energy? The estimates I saw came in around $1.25 trillion.
What about the idea of plasma as fuel? Human longevity? Zero-gravity manufacturing?
How much will it take to completely revamp our healthcare system away from something that is response driven to one where we see proactive action? This starts us delving into quantum computing and nano technology.
Ultimately, we are looking at a number that gets over $100 trillion. That is a lot of money, a total that is going to be difficult in today's political environment.
Here is where I can see cryptocurrency becoming a major player. It fulfills the role as a tool for collaboration. Paying developers in cryptocurrency is the same as USD (as long as they accept it). Thus, while I might only be able to pay for 2 months of development in fiat, there is the possibility I can get a full year with my crypto. It all takes on an added dimension when I can create a currency for the purpose sought.
Of course, I am likely to get more innovation out of a year of development as opposed to 2 months.
Now take this concept and extrapolate it out over both a decade and millions of different projects of all sizes. Suddenly we are talking about some real money.
All this starts to impact society due to the Economics of Technology. Technological advancement become like a vacuum, ever sucking up more money to keep progressing. Many studies are showing that we are actually falling behind the historical trendline of technological development. It is something that I feel will be corrected over the next couple decades.
Essentially it all comes down to funding the major advancements that society requires. This is going to take a lot more money than society, with its old ideologies, is willing to accept. Hence, we can see cryptocurrency stepping in and filling the void.
It is vital to the development of humanity.
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