Bitcoin — As Foreign as a URL in the 90’s to Reserve Status
I feel alive every time I see this sticker on a store front. But what is it really going to take for people to stop calling Bitcoin — internet money, monopoly money, dark money — and refer to it as a Global Reserve Currency?
On a macro level, it takes time, which will allow society to reach a social contract regarding Bitcoin. This is a critical component because throughout history no person or entity has been able to take control of the monetary system without experiencing some kind of physical or political struggle. The only way to avoid this is to bring everyone along for the ride. This certainly helps put the prolonged crypto winter into perspective, while the underlying infrastructures to support these cryptocurrencies are built out.
On a micro level, there are several different elements that need to take place that will help accelerate mass adoption. Mass adoption is not if but when. Think about this conceptually — Every single child born after 2010 won’t know a world without Bitcoin or cryptocurrencies. Let that sink in. The entire population of the world will already be preconditioned to view cryptocurrencies as totally normal. This paradigm shift will be the tail wind pushing us forward as we establish the following components:
Increasing Fiat to Crypto Onramps
For cryptocurrencies to reach center stage we need to make interacting and using them as simple as possible. We have to make it so seamless that individuals don’t even realize that they are using a blockchain based network.
Well, what’s the first step to allow individuals to interact with these blockchains? Uploading fiat onto them!
Right now, there are only a handful of speciality cryptocurrency platforms that act as fiat to crypto onramps. Platforms that your typical consumer today wouldn’t go to for depositing money. However, let’s say tomorrow you could do this from a local bank or drug store. This instantly would reduce a major barrier to entry, simply by providing onramps at venues that majority of people already visit.
Additionally, this also makes uploading other legacy and future assets like equities, debt products, & real assets to the blockchain a more seamless process. With the cryptocurrency market cap. at around $200 billion, we still have a long way to go until we scratch the surface area of fiat or commodity markets. Increasing fiat to crypto onramps is the first step towards accelerating the mass adoption of these blockchain based networks.
Partnering with Enterprises
There are many things that first got me excited about blockchain technology and cryptocurrencies. But there is one that fascinates me the most— Cryptocurrencies represent an intersection of so many different disciplines. At its core, the implementation of the technology not only represents engineering and cryptography, but also economics, finance, sociology, psychology, and many other disciplines. This is why so many different industries are going to become impacted by this emerging technology, which eventually will force them to evolve or die.
Right now, enterprises find themselves in an interesting place amid this blockchain revolution. I can tell you that the overall sentiment within major corporations is that DLTs will absolutely provide a fundamental shift in the way their business is conducted, similar to the advent of the internet. With that said, very few of them actually know where fact and fiction begin with this new technology. That is why a partnership between cryptocurrency platforms and traditional enterprises will be advantageous for both parties.
It will give traditional enterprises a better grasp of what they can actually build internally and implement, versus what they should outsource. At this point in the market cycle, majority of things enterprises want to accomplish will have to be outsourced to existing cryptocurrency platforms. This ultimately will allow enterprises to participate in the growth of DLTs, while allowing their existing user base to seamlessly interact with blockchain based networks through a reduced friction point.
I think one of the more recent partnerships that could help accelerate the reduction of friction points to accessing these blockchain based networks is the collaboration with the ERC-20 based token, Enjin, and Samsung. I absolutely love the fact that starting in June every single user with the new Samsung Galaxy S10 phone will now have the ability to interact with Ethereum tokens without having to do a single thing. That will have incredible network effects for the entire ecosystem.
Another net positive for the cryptocurrency ecosystem is the introduction of Facebook’s coin. Although it really isn’t a cryptocurrency it gets people comfortable with the idea that they can move tokenized value across borders without having to trust a bank. The goal is to slowly condition consumers into thinking that the current financial system is outdated and slow, then provide them with alternatives, and at that point they’ll make the decision themselves. Getting them to that point will be key.
Finding Ways to Increase Token Utility
One of the main headwinds for cryptocurrencies today are the lack of different use cases. I will be the first to admit that the only current cryptocurrencies application exists in the form of speculation. However, this will quickly change as additional infrastructure and usage is introduced.
For example, at Consensus this week, Gemini announced a newly minted partnership with Flexa, the strip of crypto. Through this partnership individuals can deposit their cryptocurrencies into a wallet and spend their crypto at Caribou Coffee, Barnes & Noble, Baskin Robbins, Jamba Juice, Whole Foods, Starbucks, etc. They are turning HODL into SPEDN. Flexa’s goal — to get every merchant to accept crypto as payment, now that’s increasing token utility.
As the world moves forward more and more avenues to use these crypto tokens will be created. This disruptive technology will slowly trickle across different industries from supply chain management, healthcare, government, banking, cross border payments, and so on. Even today in Ohio you can use Bitcoin to pay your taxes! It’ll only get better with each passing day.
Seamless Process For Building New Applications
As incredible as blockchain technology is, I actually feel that it will ultimately act as the underlying infrastructure for machine learning. Primarily because blockchain technology represents a new cost effective form of computing, which is often an overlooked component of the network. This is very interesting because every 10–15 years a new type of computing power comes to market. In the 60s it was mainframes, in the late 70s it was PCs, in the early 90s it was the internet, in the 2000s it was smart phones, and right now its cloud computing. I would argue that the next 10–15 years there will be a new shift towards blockchain computing power.
Awesome! So we have this new type of computing power, but what can we actually do with it? Because right now every single Dapp built on top of these DLTs suck. Dapps have been so terrible that only a few have been able to even obtain 100 monthly active users, while a centralized blue chip application like Facebook messenger has 10mm. I believe that the biggest reason why is developing Dapps right now is a very painful experience.
If a software engineer wants to start spinning up a Dapp, there is no central place for them to start. They will literally have to begin by Googling strategies and using blog posts as a main driving force behind their development process. Does a developer start by using Truffle, Drizzle, Ganache, or something else? I think building a central hub with information that has clear step by step instructions on how to go about developing a Dapp would be surprisingly helpful.
To provide a more relatable example, imagine having to set up your own internet connection every time you wanted to develop a new website or start a blog. That’s so ridiculous to even think about, but those are the types of obstacles Dapp developers face on a daily. I will add that there is Infura, but that API isn’t meant for enterprise use and constantly has issues. However, a new project called Alchemy, https://alchemyapi.io/, is now providing an enterprise grade API connection to the Ethereum network. They already have an impressive roster of clients like: Augur, Binance, Radar Relay, Kyber Network, 0x, CryptoKitties, OpenSea, as well as big name investors backing them like Coinbase, Reid Hoffman, Jay Z, Charles Schwab, and Paypal founders.
By taking out the tedious tasks that exist in developing Dapps today, developers will be able to concentrate on improving important things like UI and UX. People want to use technologies that make their life easier, being idealistic is not going help drive adoption and growth.
I’ve spent a lot of time thinking through this goal and the process it will take to get there. Ultimately, all these different components discussed would be great but I don’t think that it will be the primary reason it occurs. I think it’ll be the deep rooted phycology of our society that will cause the paradigm shift. With each passing day cryptos are becoming more embedded into the fabric of our society.
As we head into the turn of the decade our monetary system is at a major infliction point. For the first time in history of the US Federal Reserve Bank, the US Dollar will experience the complete collapse of its original value from 1913. Pair that with the $22 Trillion of debt the US government has racked up and the trade war with China, it’s more or less the perfect environment for cryptocurrencies.
Shout out to Ray Dalio!
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