Why Blockchain/Web3 is the largest wealth creation opportunity in recent history
The Bitcoin Whitepaper, written in the wake of the 2008 financial crisis, opens with the weaknesses of the prevailing “trust-based model”.
It then elegantly brings together cryptography, compute power, networks, incentives and a new rationale for intermediary-less value exchange into the idea of an entirely new, revolutionary concept of the Blockchain.
Blockchains have made it possible for the first time in human history for people to
represent value of any kind digitally, as a token,
program the behaviour of the token,
exchange it globally,
without the need for a trusted intermediary
Web3 disintermediates Economic Middlemen
This is significant because the story of the world economy since the dawn of global trade is the story of such trusted intermediaries
Banks as the intermediaries for monetary deposits and credit
Card networks as the intermediaries for local and global payments
Ratings agencies to manage financial reputation
Educational institutions to verify credentials
Cloud providers to hold your life’s private data
Social media companies as the intermediaries for our online existence
Marketplaces for real estate, cars, other assets
and so many more. These are our brands. These are our icons. These are our multi-trillion-dollar market caps.
Such intermediaries enabled today’s global economy and the dramatic rise in standards of living across the world. In doing so, they captured – justifiably – massive value facilitating transactions by ensuring trust, taking on risk, providing credit, executing contracts, and so on. This value accrued to the equity shareholders of these companies.
Now for the first time, it’s become possible to disintermediate many of them. To have individuals and systems interact with each other, to provide services across industry sectors and uses, and compensate service providers without the need for intermediaries to be trusted.
“The value unlocked by the disintermediation of trust in centralised entities is now captured by the tokens of the decentralised projects that replace them.”
Web2 rewards shareholders, Web3 rewards tokenholders
This change has immense consequences for wealth creation and is directly relevant to FNDX’s foundational principles.
So far, only select individuals and institutions with access were able to share in the value created by and captured by these giant intermediary companies. Even when such intermediaries went public, usually only people in the country where the company was listed were able to buy shares in that company, concentrating wealth creation by geography.
In contrast, any individual, any institution anywhere can hold tokens of any project from the very beginning of the token offering. They do not need permission, they cannot be locked out of their holdings, and they cannot be blocked from transferring these tokens to/from other people.
“Not only is blockchain/Web3 the largest, fastest wealth creation opportunity in recent history, it’s also the most global and the most democratic.”
Unlike with any such wealth creation wave previously, participation does not require preferred deal flow. There is no access or information asymmetry.
★
Photo by katie manning on Unsplash