While the value of an actual bitcoin or ethereum has gone down this year after last year’s bubble, the amount of intelligent people working hard behind the scenes to create web 3.0 is strong and growing – Ethereum has 150,000 developers currently working on building applications for the blockchain!
Last week, Open Law became the first company to launch a platform on the blockchain to enable copyright owners to create fractional ownership of creative works and subsequent smart contract royalty payments.
It may take a few years for these solutions to become optimized for use in the mainstream market, but they are coming.
The three things currently in the way are –
1) lack of computing power to process enough transactions – being built every day.
2) applications which are valuable to the consumer – being built every day.
3) consumer comfortability – this will come from utility the same way it did with the internet – Your grandma used to not know how to work a computer and now she orders on Amazon with ease!
I predict in seven years, all recorded music industry accounting will be supported by the blockchain.
Some artists will go as far as to offer partial ownership of their royalty streams as Chuck Inglish just did with Vezt, but I am unsure if this process will ever be mainstream as opposed to an alternative solution used by a select few.
While there will be extreme value in the few unicorn companies from the tens of thousands attempting the feat of achieving market adoption, I have questioned whether investing in the pipe aka the crypto currency which powers these transactions (ethereum being the current leader) will be a good investment too.
At Summit LA this past weekend, I got to ask several crypto experts including Mike Novogratz, the first wall street billionaire to get involved in crypto, that very question reworded here for you –
If you believe there will be unicorn companies on ethereum (or hypothetically on any other currency), it will surely be difficult to spot and get the opportunity to invest in these unicorns.
Assuming the currency is needed to power the transactions taking place on these applications, could it be a safer risk with still substantial reward to invest long-term in the currency itself the same way Warren Buffet would invest in a consumer brand for 30+ years?
Not even the experts, including Mike, know for sure. However, it’s an interesting angle nonetheless – He mentioned the demand curve for these transactions will likely go up at a rate faster than the cost of mining them goes down, which will likely result in increased value of the token.
In case you believe blockchain will not impact your business, Galia Benartz, co-founder of Bancor Protocol, used the metaphor of your local bakery – They probably didn’t think they were ever going to be in the internet business. Now, they probably do some form of online delivery, may accept payments with Square, and are definitely concerned with their rating on Yelp!