Hive: Can We Build A Hyper-Local "Stock" Market?
We are moving closer to the day when Hive will have the infrastructure required to create some innovative shift in financial and the markets.
It all starts with smart contract ability. This is what allows for the process of tokenization, something that is going to be crucial going forward. At the same time, exchanges are also important so that markets can form around the assets that are created.
One of the major benefits to Web 3.0 is the removal of intermediaries, reducing costs in most instances. When we look at the money associated with taking a company public, it is, for the most part, enormous. This is why there are only a few thousand companies listed of all the millions in existence.
Why don't we open up the markets to everyone?
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Creating A Hyper-Localized "Stock" Market
How would you like to invest in your local grocery store? Or perhaps you feel the corner bicycle shop is a good business? A farm on the outskirts of town?
At present, outside of a private offering, these are excluded. There is no way these entities could take themselves public. Even on the low side, it is going to run hundreds of thousands of dollars. It is more likely to cost millions and even then, not much is gained.
Tokenization can change all this. We know the ability to buy a token related to a restaurant is the same as buying Bitcoin. As long as there is the ability to swap, the transaction can be completed.
Naturally, these are not necessarily stock since it might not carry the same rights. However, it could be a way to usher in the concept of a DAO, applying it to real world assets.
All of this ties into the process of pushing things further out to the edge. We most commonly discuss this with technology and compute. Chatbots are an example of how some of that capability is more further away from the center.
With tokenization, we are applying the same principle yet focusing in the financial realm.
Of course, in most countries the securities laws would have to change, something that we can expect to be resisted.
Technology Usurping Governments
One of my overriding theories is that our present government system is woefully equipped to deal with the age we are in. The idea of governance based upon geographic region is pretty foolish in light of what took place the last 80 years.
To start, we had globalization to a degree never seen before. Companies no longer operate in a single country. In fact, there are times it actually employs more people outside the country it is headquartered (and achieves more sales).
The second major change was the shift to digitization, specifically the Internet and all that comes with it. Again, people are selling to and interacting with people all over the world. Cryptocurrency adds another layer because we now have digital assets that are not tied to any nation. In fact, they do not have any geographic ties.
This means we are dealing with assets that are completely in the digital world. There are also entities, i.e. businesses that are the same. They have no physical locations yet governments want to claim dominion over them.
Here is where the establishment of financial services of this nature expand past governments. The idea of banning Bitcoin is absurd at this point. For this reason, in my view, the move is to control it by having Wall Street take over.
Nevertheless, this is an isolated case.
The ability to do that to the entire digital asset space is impossible. Open source software means that more DEX can be spun up. The key is the development of protocols. Once these are released, it is game over.
A prime example is the EVMs. Ethereum has different token protocols such as ERC-20 which can be used by anyone. These are duplicated on the EVMs. These can be picked up via different DEX, providing the opportunity to trade, even if not direct.
What happens when this is repeated on a number of different networks? On Hive, we know of a few of smart contract platforms in development. This is fanning out similar to the EVMs.
Governments Overwhelmed
A localized business obviously has an issue since there is a physical location, providing jurisdiction. Here is where the laws are working against this concept.
However, we can presume, at this moment, the tokenizing of a pizza shop is not high on the SEC's priority list. The key is to keep it that way.
Here is where system overload enters.
We often discuss the idea of exponential growth. When people are intent on doing something, governments cannot stop it. At this point, it becomes simple math.
Governments are overwhelmed. The numbers are against them.
It is like the debate in the United States regarding cannabis. What a stupid issue? If an estimated 90% of the country has tried marijuana, why even have it illegal? Going one step further, it is impossible for the government to arrest everyone who is dealing an ounce here and there.
Hence, the solution is to try and make an example out of a few high profile cases and scare the rest. When it comes to digital assets, the numbers could get overwhelming. Imagine a time when millions of businesses are tokenized. Who does Gary Gensler go after then?
History is repeating itself.
Do you remember the Napster situation? People were being sued for thousands of dollars. What happened? There were a few cases that made headlines but, for the most part, technology changed everything. Today, more than 20 years later, music is everywhere.
The government and its laws were of no assistance.
We are going to see the same thing. When tens of millions of people in the United States, as an example, are regularly using and involved with digital assets, what is the government going to do? Are they going to be able to stop it especially when the technology allows people to interact without the centralized entities the government controls?
The answer becomes clear.
All of this opens the door for the tokenization of local businesses. The laws will change simply because the prohibition isn't working. We saw this with the U.S and alcohol (something repeated with cannabis). In the end, it is all about money.
The difference is that, with digital assets, we are literally talking about money. Our present financial system is so exclusionary that the masses are ripe for an alternative.
We can work towards a time where any company, no matter what the size, can be tokenized. This would allow people from anywhere in the world to invest in it. Of course, the appeal might only extend to those in the local region.
Essentially, we are looking to bring the Internet to finance. Commerce saw this in the sense where anyone, no matter where he or she is geographically located, can set up a website. Through that, products could be sold to purchasers on a global scale.
This idea is simply moving it to finance. We are repeating what the Internet did for commerce.
As millions of retail businesses found out, when the Internet arrives at your door, devastation can happen.
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The idea sounds interesting, but there are a lot of things to be aware of. It is not only the going public, but if you invest in a company, you would like to know, what happens with your money. Is it a good bussiness, is it growing, do you get feedback about the company?
Do they comply with rules, laws, ...
Are there any difficulties, problems, threats?
Have there been profits or losses in the past years?
What is planned for the future?
How ist the financial situation, debt?
What about competition / competitors?
eating friuts with empty stomach is more healthy
Our present financial system is so exclusionary that the masses are ripe for an alternative indeed we are. Medium business tokenization will be a boomer. In short, I have plans for this project personally. Hoping to execute soon. Thanks for the update
Adding a current challenge, my leoglossary back links are no longer showing on inleo frontend, any update or suggestion. Thank you.
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Yes. Hive circular economy, or should I say d-conomy translated in RL, should focus on "cosmolocalism", in local markets and between individuals from the same regions even, from freelancers to local contractors that can get paid in Hive or HBD. Excellent input.
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Wow, I did not knew hive.blog could become a front for e-commerce someday as well.
rePOSTed
UNLESS you're Hyper-Localized
Kind Regards
One thing I really believe is the fact that hive has so much to set the standard for a lot of things and projects to come in the future
You've done a tremendous job at highlighting the transformative potential of digital assets especially at revolutionizing finance and democratizing investment opportunities.
By tokenizing companies, it could indeed open up access to investment for people globally, similar to how the internet transformed commerce.
Hive's decentralized nature could potentially facilitate the tokenization of local businesses, allowing individuals from anywhere to invest in them.
While I strongly agree with your overall premise, I feel some of the assumptions you make along the way create vulnerabilities that are insuperable, and therefore will create dangers for investors.
It's not even difficult. The key to transacting in BTC is the internet, and the owners of the internet are eminently skilled at restricting access to it. The EU has been making inroads towards restricting cash, and anonymous wallets have joined their targets. If the EU tells ISPs not to transmit data to anonymous wallets, or encrypted data they don't have the keys to read, privacy of transactions ends, and it won't even cost any money. It would be similarly trivial to censor BTC. If transactions can't be transmitted, they can't occur.
Only through a private network crypto users themselves control - and given willingness to defy government orders - such transmission of transaction data could be continued despite government orders, at least until gangs of armed thugs kick down doors to enforce those orders. Reticulum aims to be such a private network, but it sure isn't ubiquitous yet, nor does it even propose to be immune to law enforcement.
You cite the triumph of streaming services like Spotify and Netflix over Napster as proof that government laws are incompetent to restrain data transmission over the internet, but I suggest that money is a lot different than music, movies and books, and also that people are paying for streaming services today, rather than tuning into free radio and TV broadcasts. Seems to me the copyright lawyers ultimately prevailed. Napster doesn't exist anymore. One of the primary reasons people get their videos taken down is because there is copyrighted music in the background. Copyright is alive and well, the sharing services are gone, and censorship is ever more oppressive.
In your analogy Napster is like BTC, and Napster failed.
Censor them, like it did the doctors and research that promoted Ivermectin and Hydroxychloroquine, and that the jabs had far higher fatalities and adverse effects than c19. The government is STILL censoring people over this, using social media platforms to do it. Associate Supreme Court Justice Ketanji Brown Jackson expressed concern the First Amendment got in the way of the government controlling narrative and public information. While I dearly hope her views - that directly contradict the First Amendment - are not in the majority on the court, Murthy vs. Missouri (formerly Missouri vs. Biden) hasn't been decided yet.
The ability to download music, and to access dissident views on jabs and repurposed medications, still exists, but it is not generally available. You have to break the law to get free music downloaded, and pick the corners of the internet to access dissenting information regarding c19. In the event BlackRock comes out with a competing digital money product to BTC, the best thing that could happen to BTC is that, and then only criminals would be using it.
Law abiding investors would not, just as they do not invest in bricks of cocaine in Colombia, heroin from Pakistan, or organs stripped from Chinese convicts, despite the profitability of those markets. While BlackRock probably does, they're not going to sell ETF's for any of those products, and they're not going to enable BTC to compete with whatever CBDC they create when they release it.
Thanks!
I agree that most of what you said is true, but eventually the governments are gonna push too far and reap the consequences. Won't happen fast enough for me or maybe even in my lifetime, but if I had to guess, I would bet on significant resistance to government around the world in the next 5-10 years.
I don't say these things because I want people to give up. I can shoot revenuers from my wheelchair. I want people to make realistic assessments and take steps to be free to transact that will work. Relying on the internet to transact freely in BTC isn't going to work. Maybe Reticulum can, but we'd better be building that network out so it can. It won't take over BTC transactions in a censorship immune network if we keep transacting over the internet.
We don't get to have a say in how the world is going to turn out if we just do what we're told. We have to make our way if we want things our way, as free men always have.
I agree. I also see tokenization of businesses, even small ones, as the future. With people losing jobs to AI and robots, there can be UBI. Businesses offering tokens to their patrons help them reward their loyal followers and offer their products to the holders.
Freedom is everything. Gathering funds for business is confined mainly because of regulations but distributed systems is somewhat invulnerable to attacks of dangerous minds.
Tokenization of institutions specially companies those which would try to be on the track of globalisation and use the already tools available can turn the extra benefits out of it.
All depends on how the smart contracts are made and crypto being added for monetary transactions. Liquid money added and form of other expenses rather than money could pull out the gap and help the market revenues to grow and improve better financial position easing economic part.
Yet internet would be the prime factor which would be useful in this approach. Rest would depend on forthcoming technologies most probably.
Your exploration of the potential for a hyperlocal stock market within the Hive ecosystem is truly thought-provoking. The idea of leveraging blockchain technology to democratize investment in local businesses is innovative and could revolutionize the way we support our communities. It’s exciting to consider how this could empower individuals to have a direct stake in the success of their local economy. Your insights into the challenges and opportunities of such a system are enlightening and open up a dialogue on the future of decentralized finance. Great read!
Technology usurping governments and the doors opened by digital assets, these two are good and great music to my ears.