MONEY IN THE METAVERSE
Massively Disruptive Technology (MDT)
The Metaverse will spur the transformation of massive wealth from the grave (Boomers) to cradle (their offspring and grandchildren) via the blockchain. Home to NFTs, digital properties which revolutionize private ownership, to DeFi (HEX) which upends legacy banking and financial products. And of course, Bitcoin which has the power to defund nation-states themselves. The power to reign in Fiat currency proliferation, or even just highlight the difference in supply this giving currency holders a free choice as to how they allocate those soverign currency tokens upon receiving them
A global, nationless monetary base layer relieves the burden of a single nation to uphold a reserve currency. Which has historically been enforced through territorial and resource grabs. Warring tribal domination, economic policing through sanctions should be consigned to the history books in my opinion; it’s 2021 are we not enlightened yet?
The problem with the USD is its distribution network (plumbing) which is upheld by a cartel of inefficient legacy financial institutions. Bitcoin, Ethereum, and other future public blockchains could help to eliminate underbanked people as long as they have a smartphone. Everyone could have access to essentially free banking on a public trust network.
According to CEO Jack Mallers:
“The combination of the Bitcoin network, Lightning network, and Strike allows anyone to send any amount of money, at any time, for zero cost. We now have an open monetary network that can physically settle any amount of value, at any time, to any place, at virtually no cost. Combine that with an application that allows you to utilize this open monetary network with your bank account and you get monumental innovation and pure disruption.”
Indeed, Naval Ravikant’s prediction that 90% of jobs on Wall St will be gone could be an underestimation and which I believe will play out this decade, certainly by 2035. The Cryptographer is the new Investment Banker.
Younger generations tend to trust and embrace newer technologies since they often grew up in an environment where the internet is the backbone of everything, information, social engagement, education, entertainment, shopping, entire careers have been built around the Internet.
Blockchain is becoming an integral part of the internet’s DNA. In fact, it could be argued that the blockchain should have come first rather than an afterthought, in an ideal world. And have been a foundational protocol layer. But the world is messy and blockchain is fixing a lot of the problems of 25 years of Internet adoption. Namely Cybersecurity, and overly powerful Tech monopolies.
Nature uses centralized decision makers for speed, and decentralized decision makers for correctness.
Millennials are more likely to have bought some bitcoin a few years ago, some even sub $1,000. Boomers are only a recent addition to this space. Millennials and Gen Z’ers stand to inherit more than $30 trillion in wealth in the coming years (just the US stock market alone).
A large portion of this wealth will be funneled into digital stores of value such as BTC, ETH, HEX, and other cryptocurrencies. Owning a piece of the metaverse makes more sense to the younger generation, than something as archaic as gold, or paper securities.
Indeed many have already become Bitcoin millionaires. This picture illustrates the enormous growth that Btc has achieved and the wealth generated for those early adopters and hodlers. Investors who foresaw all the recent developments and viewed the Blockchain as digital property. May have foregone the cost of owning a physical home and funneled that ownership carry cost into BTC. Just $500 a month would be worth $1.6 Million today.
The correct determination of the primary trend is the most important factor in successful speculation.
I caution anyone that charts alone tell the whole story. Careful of all the “Technical Analysts” that youtube has enabled to appear in front of everyone's eyes myself included! It is not the end all be all.
You must have a fundamental thesis as to why you are putting money to work in a particular asset or class of assets. Blockchain like the internet stocks before it had a fundamental driver. DISINTERMEDIATION and S curve adoption of new Tech. The iPhone created the demand, not the other way around. Landline anyone?
As information is democratized, you get rid of information middlemen. Think newspapers and journalism as a profession. Now anyone can be a journalist. No formal qualifications needed, which brings about its own set of issues — Fake news & who to trust? Indeed unedited, unpaid content may be more emotional, but it is subject less to paid distribution of information by special interest groups.
Newbies chartists draw lines connecting high and low points calling them trend lines then claim it means something. Without formal training and a track record. Buyer beware. They make up a story explaining the significance of it all. The reality, however, is without the required knowledge they are just engaged in curve fitting. Technical analysis is useful, but one must also capture the language of the market.
The coconut will tell you the weather day to day. But it won't let you know that you are entering Hurricane season.
Unless a man can anticipate future events his ability to speculate successfully is limited. Speculation is a business. It is neither guesswork or gamble. It is hard work and plenty of it. — -Jesse Livermore
If you need advice, training + a community to embark in a career of investing & trading look to the
It takes a special type of mindset to be a speculator and is not a lifestyle choice that I encourage. As it comes with a lot of emotional burdens to speculate, and that emotional toll generally spreads out into your relationships. You have been warned. So if you still feel the need to scratch that itch… seek training. Just like you would before embarking on any professional career.
Gold suffered a twenty-year bear market from 1980 to 2000. Once the asset was repriced sufficiently, from a point of no free market action, and a clear mispricing ($35) to the point there was no new demand at the given price of $850.
Gold is not a business. So too Bitcoin at some point will experience a long drawn out decade plus Bear market. But not before it has become the “gold” standard of money as Bitcoin is scarcer than Gold, and introduces unique properties that Gold cannot replicate.
Digital Worlds the Standard
The creation of digital worlds for the masses which simulates the physical world is accelerating. What started as a small subset of geeks in the early 1980s with the first RPG games for the PC and multi-player LAN games (remember network gaming parties, bring your own tower) it has been spreading exponentially globally, and now can be facilitated by blockchain tech to take ownership of in-game “assets”. If your kids are going to work 20 hours a week on a game, they may as well as have something to show for it at the end of it all.
Upland is a great example of this. Where physical real estate has migrated onto the EOS blockchain in a virtual world. Brooklyn brownstones are overpriced and out of reach for nearly all young New Yorkers, and generally a local marketplace only, foreign investors although active are generally a small percentage of the property marketplace outside major cities.
A Blockchain-based Brooklyn rental property portfolio is achievable and accessible to all across the globe. I have around 26 properties, earning rental income at far greater ROE than their real-life counterparts. No agents, No taxes, No upkeep. Deeded and Titled on the blockchain. It makes me not want to own an actual house in the “real” world. Own Assets, rent your lifestyle.
There are no numbers nor letters in the future Metaverse
Human beings have codified their existence through their writings to bring life down to human size to make it comprehensible. But this oversimplifies reality. Words can be illusory.
In Nature, there are no numbers and no letters for plants and animals, just the here and now, innate knowledge in their DNA, learned behaviors, and a connection to the multidimensional and multiversal telepathic supermind.
Think how Mushrooms communicate in a connected tribe across a forest floor. Is reading, writing and Maths just a transitory period for Humans as we evolve beyond our musings and use new Technology to plug back into common natural truths of the universe?
The magnitude of what is coming is therefore incomprehensible to most. Blockchain, AI, telepathic communication, and life in the Metaverse are still a few hops away before a full understanding is reached. Until then, such possibilities remain largely unfathomable. Bitcoin could be a stepping stone to a Star Trek world where money is an archaic barbaric relic of the past. If basic needs are already met at birth, then what need of money. Resource-driven tribal domination of territories is clearly not the way. With mutually assured destruction the culmination and endpoint. Wakanda rather, than Mad max would be my choice. At some point global standards, that eliminate fraud and corruption and push cooperation is a more natural being.
As with all S-curve technologies, once understanding is reached, mass adoption will come.
We have some of the sharpest minds on the planet driving colossal sums of capital that are driving young crypto companies. What was worth just 2 billion Dollars in Jan 2015 is now a $1.6 trillion-dollar space. It could become, a $100 Trillion dollar space by 2030.
Bitcoin at a Million dollars would itself alone be around $20 T. I’m still confident bitcoin can reach $100,000 this year and have a general target of around $118k-$128k. $1 per satoshi has been the long-term target for many in the cryptosphere. John Mcafee unfortunately will not be around to see it.
$100k was the play for me sub a thousand dollars. It has been a roller coaster ride, but I believe we are on the home stretch of the race. It could be a momentous 6–9 months! I say this currently as a non-bitcoin holder, but still a keen follower on the progress the code has on people’s and institutions' world views. Bitcoin code, is kind of like a virus, as the chain continues to grow so does the number of people it touches.
The asymmetrical upside of cryptocurrencies is unfathomable. Not even counting its first year of operation, $100 invested in bitcoin in 2011 at an avg cost of $4 is worth more than $875k ten years later. The same $100 invested in Apple is worth $1,000 a decade later.
Indeed there is evidence that Bitcoin can make the push on to $100k+ sooner rather than later.
- “The macro monetary landscape supporting the case for Bitcoin became globally apparent in 2020, increasing miner conviction.
- Miners have access to vastly superior financing options such as coin collateralised debt, and liquid options and futures markets to hedge risk.
- Reduced ASIC miner production due to constraints on global chip fabrication capacity. As price rises, existing hash-power becomes increasingly profitable as little new competition can come to market.”
Efficiencies of Scale
How many employees beyond the initial launch of a platform, protocol, and front ends does it take to maintain it. How many does it take to run a smart contract? How many bankers are needed to enable transactions on DEXs such as Uniswap, Sushiswap, or Pancakeswap when the liquidity is provided by the user’s, and the algorithm makes the appropriate adjustments.
How many loan officers does it take to approve your DeFi loan? How many executives does it take to maintain a Decentralized Digital Autonomous Organization (DAO)? How many admin staff does it take to operate peer-to-peer file sharing?
The platforms can continue to operate via p2p without intervention. This makes crypto orders of magnitude more efficient than traditional centralized organizations such as the tens of thousands of employees in traditional banking and finance. Coinbase alone has over 1,000 employees.
The internet built Wikipedia with no economic incentive to do so. Don’t underestimate what the internet can build as DAOs.
HEX at the moment is the prime example in my eyes.
Uncensored, Secure, Decentralized Digital Economies
Crypto protocols enable services to happen with higher security and less cost. Meanwhile, equally efficient structures can be built on top of the new structures for added utility. The amount of productivity generated is already soaring but the end result is beyond our wildest dreams. The impact on GDP will be immense and is the one white swan variable that can mitigate the catastrophic effects of record levels of debt and low-interest rates as many Market commentators, economists, Traders, and Investors have to contemplate whilst they allocate their dollars around traditional financial investments.
As the expectations for economic growth rise, interest rates should surely follow along. Legacy markets may well jitter along the way, but the crypto markets and the participants in Crypto are well versed in crashes which have only served to strengthen the industry and give it robustness. Liquidations and removal of leverage from the system are healthy as they provide real-life stress tests with no external party there to lend a hand in times of need.
May 19th saw the most drastic intraday move. The peak to trough move of ETH was approximately 41%, from $3441 to $1850. (on centralized exchanges, there were prints of as low as $1700 with some experiencing “technical difficulties”)
In Defi, the majority of the liquidations are non-stable crypto asset collateral against stablecoin borrowing. It is also important to scale the total liquidated volume against the total supply of each asset. The scaled liquidation volume ranking is:
- YFI (5.6%)
- WBTC (3.2%)
- LINK (2.4%)
- WETH (2.3%)
Projects come and go, ideas and experimentation are welcome, and as participants who weather the many seasons of Crypto get smarter and stronger with each cycle. New diamond hands and brains get forged.
Boomers again may fall foul of bringing legacy portfolio management (diversification, rotation & profit taking) to crypto at the wrong time.
First, they are too late to Crypto, then they exit too early. S Curves are hard to ascend. Because the boom/bust nature of Crypto knocks people off the upward path. Crypto bear markets have historically been quiet periods when there appears to be not much in the way of activity and projects & companies can build for the next wave of excitement and new users to the space.
Yet the main Blockchains will continue regardless, oblivious to what goes on around them. Confirming transactions and minting new rewards.
Web 3.0 = The Metaverse
Web 3.0 is the foundational layer on which these technological developments will take place. Clearer regulation is coming so countries such as Singapore can crunch through their growing backlog of companies waiting to take advantage of the blockchain-based cryptocurrency ecosystem. They all see the orders of magnitude in efficiencies gained by moving into such technologies.
Bitcoin vs. Crypto
Bitcoin is disinflationary thus is a good inflation hedge against the giant wall of fiat money that has been printed.
Crypto creates utility which boosts productivity, which should boost GDP which boosts the price of the long bond which tames inflation as actual demand becomes a vibrant part of the ecosystem again and spills over into the “real” world.
Crytpo.com is a prime example, just recently inking a $175 Million 10 year partnership with the UFC, which itself recently went public and has experienced unparalleled growth in the past 15 years. Crypto is here to stay obviously.
Tether USDT Current Status as of June 2021: The audit of Tether shows 65% of their reserves are in commercial paper which are bonds issued by companies. New York is the strictest state when it comes to crypto laws, so given that they have so far signed off on Tether’s required quarterly audits is a good sign that the 65% in commercial paper is acceptable.
Keep in mind that fully regulated USDC makes a great substitute for USDT in the unlikely event things go pear-shaped for Tether.
The original NY Attorney General’s $850M probe of Bitfinex, & Tether ended in an $18.5M settlement. An agreement was reached that Tether must provide all records going forward every quarter.
Tether has been able to account for all Tether created since 2018 and more recently has provided reports satisfying the requirements of the AG since they reached an agreement. FUD-based news articles on Tether ignore the facts or choose to engage in clickbait.
Why do I continue to invest in HEX?
Because it is better designed than Bitcoin. Why it wouldn’t it be, after a decade of network activity, the pros and cons of the Bitcoin protocol are clear to all observers. No bugs in the code, No pollution, No centralised exchanges (majority of HEX is to be found Uniswap), No Liquidations, No politics, and No internal infighting.
But let's not bash a piece of software, its inert and can't fight back :)
Transparency. Being the first major Dapp that empowers the users to take control of their money and plan their future would be enough. But given we are in a yield-starved environment awash with Central Bank-issued currency. The importance to create yield at a faster pace than the banks can issue is of most importance. Simply put if you are standing still, you are indeed going backwards.
The users and their economic input become the network. This is extremely important for virality and engagement in a thriving ecosystem built solely around a piece of software may indeed seem strange. But when you consider it rewards a certain set of behaviors (namely delayed gratification, less speculation, asset accumulation, honoring of contracts) then it begins to make sense why a certain group of people would begin congregating around it.
The monetary gains also give reason to promote this product to friends and family. Knowing that in the vast sea of crypto coins, HEX is one of the few (maybe only) that actually fulfils its design intention.
Savings contracts on the Blockchain.
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