Crypto is a $2 Trillion asset class.
When I see critics still saying it’s a fad or that NFTs are meaningless, I laugh.
Naive minds never get access to the best opportunities.
What Bitcoin started is never going away. In fact, it’s created some incredible things you’ve probably missed because of all the deafening online noise.
In 90 days’ time something big is happening
Ethereum is the second-largest crypto asset in the world.
The problem is it’s complex, so many dismiss it and choose to listen to society about whether it’s good or not.
Never listen to crowds.
Always do the research instead so you don’t get brainwashed.
Ethereum is a currency that currently has an inflation rate of roughly 4.2%. This means 4.2% more Ethereum tokens (coins) get created and added to the network each year.
In 90 days’ time Ethereum’s inflation rate drops by 90%. And once all the updates for the new version of Ethereum go live it will actually be deflationary. That means the supply of total coins will go down.
Scarcity in financial assets that have significant value and a real purpose means higher prices.
This blows my mind. Most people are walking the streets and not knowing about this fundamental shift in Ethereum.
Bitcoin has a capped supply of 21 million coins. Ethereum is about to have a total supply that goes down every year. The difference is subtle, yet it’s going to create insane levels of wealth for those who understand.
Boomers and younger generations are divided
My parents’ generation only wants to own physical things — like real estate — that help them limit losses.
The younger generations aren’t interested in owning physical assets. We want digitally scarce assets we can store on our computers. Physical assets limit our upside, and we don’t want that.
The divide is astonishing.
The boomer generation has their wealth tied up with institutions that have proven to be dishonest. The younger generation has their wealth stored on their phone, anonymously, and in a decentralized way to ensure trust.
One group will be right. One group will be wrong.
The Ukraine War is being fought with a new weapon
The focus of the war has been on the tanks in the streets and the violence.
Behind closed doors is a financial war. The US tried to impose sanctions on Russia to force them to retreat. Russia expected sanctions so right before the war they legalized cryptocurrencies.
Now they’re saying they might use cryptocurrency to accept payment for their gas and oil. On the other side of the war, the Ukrainian president has received more than $100M in crypto from the community to fight their Russian invaders.
This is the first time a war is being fought with cryptocurrency. It’s mind-boggling if you think about it.
The shift in economics is amazing to see
Crypto expert Balaji Srinivasan says during each decade there is a scarce resource.
The 2000s started with bandwidth, then in the 2010s it was attention, then in the 2020s it has been blockspace thanks to the rise of blockchains. He thinks the 2030s scarce resource will be loyalty.
I believe the 2030s scarce resource will be community, amplified by loyalty. Right now building a community is difficult.
The platforms that enable community building control the rules and siphon off most of the value for themselves. They don’t even give us access to the data of the communities we’ve built. Pain. In. The. Ass.
There’s no doubt this will change. Traditionally businesses have had to use ads to pay for access to their communities. Web3 and blockchain technology has disrupted that dumb idea.
The new economy will be built on top of communities. These users will self-identify and be controlled by no one. The community will outlast the businesses that may or may not serve them products/services.
Most people haven’t figured this out. If you’re into community building, like I am, you’re done with big tech and the games they play.
Bring down the internet’s Berlin Wall. Make online communities free again.
Crypto will enable this revolution through digitally scarce assets, NFTs that prove ownership, and a decentralized network of users.
The savings account is dead
We’re tired of earning 0% on our savings.
It blows my mind people don’t know they can earn 10% interest on their US dollars with apps like Crypto.com.
In the crypto world it’s called staking or yield, which really means interest. I’ve been staking my Ethereum and US dollars for ages.
In the future people will slowly migrate from the old financial system that robs them blind, to the new financial system that pays them fairly. It’s already started. Word of mouth is accelerating.
Why earn 0% on your money?
Crypto is a digital country
Naval Ravikant says, “Crypto is the smartest people in the world exiting into their own economy.”
This idea hasn’t caught on yet. What if crypto is a different economy not controlled by institutions? What if democracy is reinvented with the voting rights blockchains enable?
Some even dare say crypto is a nation state (country).
As the world becomes more digital, countries in cyberspace aren’t such a radical idea. Maybe we’re already there and just don’t realize it.
There’s no need to use your real name
Many people don’t like to use their real names online.
Using a real name can cause issues at work or get you canceled. I get it. Many people don’t know that identity in the crypto world can be anonymous by default. There are no workarounds needed or special tools.
Made up names and barcodes for usernames are all part of the awesomeness of the crypto space. The use cases for anonymity haven’t even been thought of yet. Pretty epic.
The most requested new Airbnb feature
Brian Chesky, the CEO of Airbnb, confirmed the most requested feature Airbnb users want is to pay for accommodation and get paid for renting out their homes using crypto.
He says, “Like the revolution in travel, there is clearly a revolution happening in crypto.” Airbnb accepting crypto solves a much bigger problem. It’s a pain to make payments for Airbnb bookings internationally.
It’s a slow process that incurs high fees. With crypto, costs would come down and instantaneous payments would become a feature.
When money moves faster so does the speed of the global economy.
It’s now possible to understand how to value crypto
Working out the value of a particular crypto used to be based on hype.
There was no formula or data to back up prices. The same happened with tech stocks. You’ve likely heard for years from adult babies that “tech stock prices are too high because their PE ratio (price to earnings) is way off.”
But we’ve learned recently that traditional valuations done by grandpas in penguin suits on Wall Street don’t apply to tech.
The value of tech equals the value of the network. The growth of the network determines what the price should be.
Still, in crypto, things are a bit more complicated.
Crypto and traditional finance expert Raoul Pal came up with a formula:
THE VALUE OF A DIGITAL ASSET NETWORK IS DRIVEN BY DAILY TRANSACTION VOLUMES (IN DOLLARS OR UNITS OF VALUE)
X NUMBER OF ACTIVE USERS
The formula means that Bitcoin could hit $600K if the network continues to grow the way it is. And Ethereum could hit 5 figures based on its network effects.
The smart people on the Bankless podcast have even been able to work out Ethereum’s discounted cash flow, a traditional metric the old school business gurus swear by.
The conclusion is the same: 5-figure Ethereum prices.
Final Thought
What’s happening in crypto is incredible, and it’s hard to ignore. Don’t be naive. This is the future of the internet and tech being built right in front of your eyes.
The most important takeaway from this article is to understand what happens to Ethereum in 90 days.
