Cryptocurrency Will Expand Due To The Abundant Network Economies

Many feel that cryptocurrency is going to die or that it is nothing more than an asset class meant to be fed to Wall Street. This is, after all, what Gary Gensler is doing his best to do.

Here is where there is an evident disconnect to what money is along with how it affects the economy. It is also a lack of understanding as to how limited the present monetary situation is. Many seem to believe the ideas that were theorized a century ago. Few talk about the evolving nature of things especially when it comes to technology.

Cryptocurrency is not going to fail. In fact, it is guaranteed to succeed. The only way I see it going away is if we completely remove the Internet from existence. Barring that, cryptocurrency is going to be the medium of the future.

There is a vital point that is not mentioned in all this. It has to do with the basic correlation between money and the economy. It is also what we are confronted with at present.

So let us see what this is all about.

Source

Web 3.0 And The Network-State

We are entering a period where Web 3.0 is upon us. This term is designed to capture the next phase of technological advancement and how it affects humanity. To distinguish, this is different from Web3 which is a part of Web 3.0.

Web3 is the premise of decentralized blockchains and open databases. It is the moving away from an internet that is controlled by silos, i.e. a handful of mega corporations.

Web 3.0 is the inclusion of a number of technologies that affect the digital world, which is merging with the physical. Some of these could include artificial intelligence, robotics, quantum computer, renewable energy, mixed reality and bio-tech. The path forward still is unwritten so we are not sure of the evolution of each. However, we simply have to mention we are seeing a number of technologies converging.

All of this, in my view, helps to establish the concept of the Network-State. We are no longer in a physical only world. In fact, the digital realm is becoming a larger portion of our lives.

Ultimately, Web 3.0 will transform society. It is another leap forward that will completely alter how we live.

The Economy And Money

Technology by nature is deflationary. Here is where the impact of cryptocurrency is required.

We are suffering from a shortage of money. This might seem absurd considering the actions of central banks but, if we understand what they create, the point is clear. That said, we have a valid reason for this.

If an economy is scarce, then money based upon this value is sensible. It is how life was in the 19th century. Economies were nothing robust since, for the most part, they were localized. We also saw a human-centric production. We had not even entered the mechanical age, let alone digital.

All that changed. We are now dealing with abundant economies. While growth rates can be seen as slowing, look at the raw numbers. A growth rate of 1.5% on a $100T economy is a lot of wealth generated.

Here is where the basics shows us the future.

Money is the mechanism that allows for the goods and services in the economy to circulate. Without that, or when it is limited, the economy is stifled.

As mentioned, if the economy is scarce, then limiting makes sense. However, when we are dealing with something that can expand every millisecond of the day, we see a much different situation.

Therefore, with cryptocurrency, we have to ensure there is enough money available to circulate the goods and services produced in the digital world. Can you see how we are rapidly moving towards abundance?

Here is where we see how money is actually the circulation of information. Blockchain exemplifies this greatly since we can see the transactions. There is no physical component to this. We are dealing with ledger based money.

We also have to face the fact we are going to require a lot of it.

Economic Energy

Money can be thought as economic energy.

If we want to drive economic growth, we need more money. It is the fuel, for now, that drives everything. It is the medium of exchange of all components that go into the delivering of goods and services. The entire concept of incentivization shows this.

An economy is more than simply the goods produced. We have a multitude of factors to consider. There is the education level of the population, the resources available, legal system, culture, technology, and anything else that impacts the ability to produce.

Here is the kicker: as any of this advances or expands, more money is required. A basic example is education. If a population becomes more educated, the ability to produce, develop, and create at a higher level is suddenly present. That means the money required for a manual labor based economy is much different from one with advanced professions.

In an era of technological advancement, we see how we are far removed from the labor based concept. When we delve into the digital realm, we can see how expansive everything instantly becomes.

We are facing a world of abundant network economies. There is few limiting factors to this realm. In fact, outside energy and computation, there really isn't much else. We are looking at automation on steroids.

Then we have to consider the bridge between the digital and physical. For this discussion, we will call them robots. These mechanisms operate in the physical world yet are driven by software. Hence, they fall, at least in part, under the laws of information technology.

This means that physical economic output can accelerate in some ratio to digital expansion. What that is exactly is still unknown. Nevertheless, it is light years ahead of the pace of producing a new human to enter the means of production.

Of course, all of this requires money.

The present system does not operate quick enough to keep pace. The banks have fallen behind since the Great Financial Crisis and have no prayer of catching up. Balance sheet constraint is affecting global trade to the tune of tens of trillions so far. This will only keep growing.

Cryptocurrency is the answer because it can expand to meet the demand. As technology keeps advancing, the deflationary pressures will mount. How can a system that is already lagging catch up when it doesn't even realize what is taking place?

Here is where digital assets will take over. We are going to need trillions to circulate the "goods" tied to these network states. Even if we simply focus upon the digital, ignoring the bridge to the physical, the numbers get enormous.

Where are we going to get the fuel for this?

The title says it all.

---

What is Hive

Posted Using InLeo Alpha