Cryptocurrency: Economics Based Upon Technology

in LeoFinance6 months ago

Technology is changing many things in the world. A large number of people feel we are entering a massive technological age where we will see an absolute explosion in how society operates. It will be interesting to see how different things are in 20 years.

Meanwhile, we see a lot of our established systems coming under attack. At the same time, many long held concepts are starting to be questioned. A lot of things that were taken for granted are now undergoing review.

For example, what will the world look like when many of the jobs are gone? Some feel this is a preposterous idea. However, Elon Musk is focusing upon building humanoid robots, ones that can be programed to handle many of the basic jobs we now occupy.

This creates an entirely new mindset. What happens if tens of millions of these are manufactured each year? As we can see, over a decade that will end up being hundreds of millions of robots. Considering they can go 24/7, it is possible each one replaces more than one employee.

We will have to see if this is achieved but it is worthy of note. It also alters how we look at the building blocks of our economy.


Technological Economics

What is technological economics? It is not economics that focuses upon the technology sector. Instead, it is economics that is based upon a technological system. In short, the two combine as the foundation for our economic world.

Technology is penetrating all aspects of our world. There are few sectors that are not confronted with this. How this all unfolds has yet to be fully realized. However, we can see how many of the old economic paradigms are becoming obsolete.

We cannot dispute the explosion in value of the technology companies over the last couple decades. These entities were able to surpass the largest companies in the world and did so in a relatively short period of time. It is also likely that they will keep growing at an accelerating rate as compared to the "traditional" companies.

Through these advancements, we were introduced to terms such as network effect. This is now a valid economic principle, at least in our new economic age. As we can also guess, part of the equation is incorporating less human labor.

Bitcoin is considered by many to be the first Decentralized Autonomous Organization (DAO). When we consider it, we truly have an automated system. According to Coingecko, Bitcoin has a $1 trillion valuation and processed over $50 billion in the past 24 hours. Yet, it did all that without people. They system is run by computers all over the world. Naturally, humans have to initiate the transactions, for the most part although many transactions are automated.

The value of the Bitcoin Network, according to many, is the computational power that goes into it. This is something that people feel provides its intrinsic value. Since energy is required, we cannot say it is worth nothing. While this is up for dispute, it does provide some fundamental backing. It also bases things on an entirely new economic model.

Technological Abundance

We often discuss the Age of Abundance. This is a concept that people still have a difficult time grasping. Due to decades of operating in an economic system that is based upon scarcity, we know this transition can be hard.

Nevertheless, economics derived from technology are not scarce. If we look at the core foundation, we can see how rapidly things grow.

For the last couple decades, the global economic growth rate slowed a great deal. We are now looking at 2%-3% being considered acceptable. Honestly, this is anemic and evidence that something is truly wrong with the present system. Nevertheless, it does give us the baseline for the conversation.

Why are returns in cryptocurrency so much higher? How can they being consistently generating returns that are, quite frankly, absurd?

The answer lies in the fact that all of this is based upon technology. For this reason, it is best to look at technological growth rates. Here we quickly see that the old concept of 2% or 3% is quickly surpassed.

Let us look at a few charts:

Data Growth Rates:


Processor Clock Speeds:


Total Bits Shipped:


Granted, some of these charts are a bit out of date. Nevertheless, they do exemplify how the growth rates far surpass what was mentioned above. When the basic infrastructure is growing at 50%-100% annually, that is a much different baseline to operate from.

This feeds into the global abundance that we are embarking upon. As the world becomes more digitized, everything builds off this. We are going to see the tentacles of technology penetrate most everything.

Declining Costs

The other major factor in all of this is that, in spite of the massive growth, costs plummet. We see similar charts but in the opposite direction when we add in the cost component. Hence, we have a cost per performance variable that is astonishing.

Let us again look at a few.

Average Transistor Price:


Computer Memory and Storage:


Smartphone Costs:


While some of these can level off, like the cost of a smartphone, that is still a lot less than the cost of laptops or personal computers. We saw a paradigm shift in personal computing with the introduction of this device. Fortunately, even as the smartphone levels out, there will be new technologies that follow the same curve.

Essentially, in an economy based upon technology, we can easily see how the foundation is get more for less. Every few years, the amount available for the same money grows significantly. When we apply this to a large economic system, the rates of growth become evident.

Cryptocurrency Immersed In This

Cryptocurrency carries a monetary component. This is evidenced in the fact the data (tokens transferred) carry value to them. There is, however, another important factor to this.

We know that cryptocurrency, itself, is a technology. It cannot be separated from what is being described here. We are fully immersed in technology with each iteration of cryptocurrency development. While we are seeing complex systems forming, much of it is derived, at the core level, from the coding that is being done. We cannot separate the two.

For example, as the costs of operating networks drop, we see an increase in the ability to process more transactions. This is keeping in line with the charts above.

Performance increases while costs decrease.

Another factor is we know long-term energy costs are coming down. This is not noticeable now with the cyclical run in energy yet the secular trend is clear.


When we look at the pace with renewable energy, we see an even starker picture.


While there are, admittedly, some challenges that renewables are encountering at the moment, we cannot deny that, overall, this is the path we are on. Over the next couple decades, challenges will be overcome with major breakthroughs being made. Ultimately, the cost of energy will keep pushing toward the zero marginal cost level. This is what technology does.

A recent example is El Salvador and the idea of Volcanic Mining. Here we see the energy that is produced by a volcano being used to mine Bitcoin. So, not only is the system nearly automated, the energy powering the rigs is coming out of the ground for free. Of course, there are costs associated with capturing and converting the energy to electricity. Nevertheless, we can presume the energy will be abundant for a long time and that costs are going to keep decreasing over time.

This is all forming the basis of our new economy. It is one that is truly based upon technology. This brings in a completely new set of economic models that were never considered before.

When we understand how abundance is unfolding, we can see how cryptocurrency perfectly captures this. Increases in automation, computation, and bandwidth are growing at extreme rates. This is why we can expect the returns from economic input to far exceed what we see now.

This is going to be clear in a decade or so. However, those who can see it now are able to benefit greatly. Overcoming paradigm paralysis is vital since we are operating under an entirely new economic system. The old is still with us yet that is just a timing thing. Within two decades, much of that will be phased out. However, we need to be forewarned, there will be a lot of upheaval in the meantime.

A conversion of this scale is not going to be without pitfalls.

The road will be much easier as more people embrace cryptocurrency and truly start to incorporate that into their lives.

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The cost of wind and solar seem to be decreasing quite fast and I wouldn't be surprised if we start putting more of it up to match the energy supply. I know that right now we just don't generate enough but how long do you think it will take for energy to be self-sufficient without coal/gas? The gradual transition seems better than the forced renewable transition we are seeing right now though.

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I know that right now we just don't generate enough but how long do you think it will take for energy to be self-sufficient without coal/gas?

If I had to guess, I would say we are looking to 30-40 years.

Personally I think we are going to have a host of energy sources outside of wind and solar. There is going to a lot of other options. Personally, I am very curious about geo-thermal energy (volcanic energy).

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For example, what will the world look like when many of the jobs are gone? Some feel this is a preposterous idea.

The "antiwork" movement is actually increasing at a dizzying rate! There's an antiwork subreddit that's one of reddit's FASTEST GROWING SUBREDDITS! The movement is HUGE. Young people do not want to take part in the system. They do not want to spend their lives toiling away for a paycheck. People are ready. The older generations certainly don't like it, but millenials and Generation Z are READY for it. The movement also has a lot of support by Gen X and some baby boomers too. People getting money from apps like @actifit, producing content, picking up litter, etc is well on its way as you've been saying. The population is READY and waiting for it. Gen Z feels a deep sense of despair and hopelessness at life and sees no solutions or end in sight. It's just a matter of them coming over here to these spaces and using them and learning the solutions.

My hubby and I are ready. We're tired of the rat race.. working 40 plus hrs a week just to make ends barely meet. That's why I love hive. We've slowly been stacking up along with few other tokens hoping maybe to get out of "their" rat race.

It's so outdated, and everyone is feeling it besides those who refuse to evolve.

Web 3.0 is going to radically alter a great deal. How all of this plays out is going to be interesting. A lot of turmoil will result as we transition through a lot of this.

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It is more than just the anti-work movement. There are technological progressions that are going to eliminate jobs at a growing rate. We are witnessing acceleration which is going to catch people by surprise.

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I was hoping to marry the two in my comment. The anti-work movement needs to marry the crypto movement. The technology is waiting for the population, and the population is waiting for the technology. But at the moment the general population is stuck in a sense of despair and hopelessness. They don't know what to look to. Crypto currency usually gets laughed at.

I look forward to a day when humans no longer toil for our basic needs - let the artists flourish, as robots do the hard labor!

There will never be NO labor, but many things can be automated, and society as a whole will benefit.

That is true. We are going to see a great transformation in how things will operate. We are going to have a lot of people who are out of a job. Is that a good thing?

Overall it will be a benefit yet we just are going to have to deal with a lot of issues that are going to arise.

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Geeze, with all the technological penetration no wonder there's so much transformation! It will be interesting to see what and how mass adoption will come about. I agree it is inevitable.

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I think we're experiencing the crumbling of our dinosaur system, and we would do well to look to the future and to solutions. Most people are caught up in the dying and crumbling part and see no solutions. I admit I get caught up in that and would do well to focus on the solutions.

Mass adoption in cryptocurrency is happening before our eyes.

The growth rate is incredible. How it affects everything else is going to be interesting to watch. We are also going to have to stay on top of things to ensure we are prepared for what is coming.

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For example, what will the world look like when many of the jobs are gone?

I was just having a conversation about this with a couple of guys the other day. I will be honest, it was because of your posts that I felt knowledgeable enough to even join the discussion. I feel like I held my own... Call me crazy, but I really feel like the advances in achieving nuclear fusion are going to help push us towards a lot of what you are talking about here. Cheap easily accessible energy will be a huge catalyst towards change.

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Ah nuclear fusion, the promise of always being 10 years away, for 50 years.

Personally I am interested in how we could use geo-thermal. That seems like it is something that might be coming into its own.

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I don't think 10 years is unreasonable in this case based on what I have been reading. Geothermal would be awesome, but for the common user it is too expensive. Especially if you are trying to do it after the fact in your house. Large scale... Who knows. I'd put my money on SMNR's before I guessed on that. NuScale has some awesome stuff in the works.

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Yeah the mini-nukes are very interesting.

The key is there are many pursuits in play. We will see which ones end up being utilized. I guess it is all good if it produces more energy.

Geo-thermal intrigues me because it can actually power plants. Sure it is centralized and not right for all areas. That said, it can alter the input into some pretty large plants.

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Great points!

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Information like this makes me excited for the future and at the same time scared for future because of the fear of unknown.

The fear of the unknown is what most people to resist what is technologically on its way.

We are looking at an entirely new economic system being developed.

This is going to cause a lot of pain in the process yet will end up helping more than it harms.

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I am kinda happy and kinda scared at the same time
I don’t know what will become of me if robots take over my Job as a realtor. Lol, I guess I have to make investments now

With a job like yours, it is more likely that an application will replace it.

Robots are for physical things, AI is for the mental stuff.

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Do the best for a good future

We all have a part shaping it.

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When we look at the pace with renewable energy, we see an even starker picture.

I guess you can see it even to the eye. When I was a kid, I fell in love with solar panels when I saw a calculator powered by the sun. It was a delight!) Nowadays, solar panels are able to provide electricity for an entire house, and it is cheaper and cleaner for nature. We live in a wonderful time!

Post 🔥!

We live in a wonderful time!

We are only at the start of things. We are going to see a massive improvement in many areas of technology. The first couple generations are not great but as more R&D that occurs, we see improvement.

And that moves us towards much greater adoption.

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This is a marvelous analysis. !BBH

no matter how much robots replace a large part of the staff of a company in the future, I would say that we will be adapting and the way to generate income will no longer be with physical jobs but more intellectual or precise, since a robot does not repair itself And that is where the human part would enter the maintenance of these, I do not think that technology completely replaces the human, we will always be ahead of it, well it is my point of life lol, I really liked your post, greetings.

Because this is such an awesome post, here is a BBH Tip for you. . Keep up the fantastic work

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Fear to think what will happen in 20-30 years. Apparently, the technology in the world is better, we have a lot of robots replacing people, although in the next 50 years I do not see the complete elimination of the human factor at work. (air and rail transport). Cryptocurrencies give an annual increase in apr, but now let's look at how many people do not know what Bitcoin is. How many people do not use payment cards and how many people only pay in cash. Of course, these are countries that are a bit lagging behind. Let's go back to technology. I'm glad she went up but ... The development of technology also has disadvantages. Let's look at young people, children who are addicted to technology. I consider that I had a better childhood without a mobile phone, computers and all these technological novelties. My relationship with my peers was very good. How about the black scenario when we step back from technology? destruction, degradation of humanity, inflation, poverty.🤔 Impossible? The economic crisis in the world also only a few people predicted .. ("The Big short") 😀Good day.

Wow , interesting as usual
Will translate it because that wayI will understand it better
If u dont want me please let me know

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