I was asked "what am I buying" in regards to Bitcoin today by a colleague, and I was trying to explain that what is being bought is the infrastructure of web 3.0 that has to be built in order for the value to be applied. This is a little bit hard for many to visualize, so I likened it to the development of the oil industry - where at the start "striking oil" didn't mean insane riches, it meant there was now the possibility to work.
In the early days of the modern oil industry, there was no infrastructure in place, so finding oil required entire supply chains and development of tools to take place in order to mine the potential. But there was more to it than that, as even if one was able to extract the black gold from the earth, there was no infrastructure in place to really use it, so entire supply chains and products had to be developed in order to bring utility to the resource. Things like diesel cars, roads and service stations - as well as all of the other areas that oil was applied.
Without infrastructure, there is no was to shift the "energy" of a resource and transform it into something useful. When asked what this meant, I explained this through an industry a little closer to home, the internet.
On October 29, 1969, ARPAnet delivered its first message: a “node-to-node” communication from one computer to another. (The first computer was located in a research lab at UCLA and the second was at Stanford; each one was the size of a small house.) The message—“LOGIN”—was short and simple, but it crashed the fledgling ARPA network anyway: The Stanford computer only received the note’s first two letters.
Okay, so that is 52 years ago this year - so the internet isn't exactly "new" - but it was between those two nodes that the internet first started to make real its potential, even though the first transmission famously failed. But at this stage, it was potential only and even when it started being valuable for the US government, it wasn't until decades later that it really started to realize financial value as an infrastructure.
The value of the internet isn't the infrastructure itself, it is everything that is built upon it that is not possible without the infrastructure to enable it. Pretty much every business now has ties that leverage the internet in some way, with many of the largest companies in the world, wholly reliant on the infrastructure - making the likes of Amazon, Facebook, Apple impossible without it, at least in the form and size they have taken.
But, this is web 2.0 and the infrastructure that is to come is an additional layer that exists between the physical infrastructure of the internet and everything between. Blockchains and crypto leverage the same infra as web 2.0, but empowers it further through the way it is able to manage data, as well as track and distribute data across the world.
This layer allows for an increasing number of users to be their own data center and gateway, an owner of a node, an account, a business or a digital experience of some kind that will generate interest and value as part of the product creation possible through the new infrastructure. It is like the decentralization of the products surrounding oil mining, even though the oil itself was in the hands of the few.
But, the difference is that this layer of the infrastructure isn't in the hands of the few, it is owned and operated by the many at the infrastructure level, making it highly resistant to widespread manipulation from a single source. And, even if it some sector does get corrupted, the usage of it can be reduced to zero, while an identical service with a different governance structure takes its place in the network.
At this point, what we are doing is still in the discovery and mining phase, where we are finding and creating new resources, even though there are very few vehicles available to use them, let alone roads to make the cars practical. However, these are being built, where the logic is in place and developing, but the secondary supply of usecase products is being developed, even though the hype is on the buying of the infrastructure itself.
What will bring value to blockchain and crypto is as the businesses and the people who create and consume for them, start moving their activity onto the new infrastructure layer. This will mean that in the process, value generated will be split between the old and new, with increasing shift to the new, driving value up, as transactions of all kinds increase.
While for many, this process seems painfully slow, this is the way industries are formed.
A Pennsylvania oil well in 1859 fueled kerosene lamps. A 1901 gusher in Texas would fuel autos.
That is 41 years to that point, but in the last 120 years, oil has fueled a great deal of growth, innovation and wealth, albeit not necessarily all positive development, considering some of the side effects. Yet, all industries, whether the future of electric cars, or the development of digital cameras take time to build and even more time to adopt into mainstream usage.
I believe though, that due to the nature of the internet itself, web 3.0 is going to spread at a much faster rate, as communication of information moves virtually instantaneously, speeding up the process. Not only this, much of the technology is opensource with the core blockchains being available to leverage by anyone interested, who will use them in increasingly innovative ways, after first replacing what is already being done on web 2.0 with a better process.
Just like the internet itself, web 3.0 s going to impact and disrupt every industry on earth, every business, every person. It doesn't really matter if a person chooses to take part or not, but as Elon Musk has come to realize, it is inevitable.
So, what are you buying into?
The future of life as we will know it.
[ Gen1: Hive ]
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