The encryption wave is only about blockchain technology? Actually you are wrong…

“Blockchain will change the future”, many people’s overall understanding of blockchain is limited to this sentence. When you ask “why?” and “how to change?”, few people can give a decent answer, either to show off their incredible high returns, or to explain all kinds of new technologies. Almost no one tells you from a macro perspective, why the crypto world has such a rapid development speed? And what does it mean for the entire economy and society? Since 2017, Rhythm Translator has been tracking many of the world’s top macro investors to understand how they interpret the macro background of blockchain development and how to build the future macro structure of the crypto world. The following short article is a good summary of some of the macro ideas. It will tell you why your understanding of the crypto revolution may be wrong, and why this revolution will be much larger than you expected…

The encryption wave is not only about technology

In fact, the encryption wave is more than just a technological revolution. This is a fission of human reorganization of the future economy, and the blockchain may be just the tip of the iceberg. Knowing this will greatly help you understand and invest in the crypto world.

Many Bitcoin OG (Original Gangster) missed Ethereum because they did not realize the power of smart contracts. Many Ethereum OGs missed the public chains of Solana, Avalanche, and Luna because they did not realize the power of low cost and high speed. Similarly, in the future, many public chain OGs will miss the next big thing, no matter what it is. All these mistakes have one thing in common-a fundamental misunderstanding of the crypto revolution. The encryption wave is not only about cryptography or censorship resistance, but even decentralization. It is about how society organizes the economy and distributes the huge transformation of economic output. The value of any technological feature is directly proportional to the degree to which it promotes this transformation.

Markets and companies are two traditional methods of organizing economic activities and distributing value. The last major breakthrough in “value distribution technology” occurred in the 17th century, when the Dutch East India Company publicly sold shares of its own company, creating the first “listed company” in history, greatly reducing the threshold for the general public to enter the capital market. They were given the opportunity to “divide the cake”. This kind of innovation has triggered a rapid expansion of economic energy and at the same time brought about greater equality of wealth. Since then, the ownership model has not changed much.

It is undeniable that the distribution of economic output today is more equal than it was 500 years ago, but this progress has long stalled. Even in the United States, which has the highest share of equity, only half of the population owns stocks. Since the 2008 financial crisis, this data has accelerated its decline, especially for young and low-income groups.

The encryption wave is only about blockchain technology? Actually you are wrong...

At the same time, due to a variety of reasons, wealth inequality has been at the peak of the century, and the development of science and technology is still and will continue to exacerbate this severe situation in all aspects. How to get more people to participate in and benefit from the current over-abundant global economy is one of the most pressing issues of our time.

You may ask, what does all this have to do with a crypto investor?

The relationship is that the reason why crypto is expanding like wildfire is precisely because it provides a solution to the problems of this century, although it is still in the “experimental” stage. The scale of crypto’s future growth will depend on how helpful it is to solve this problem. In other words, the magic of the encryption wave comes from its contribution as a “Massive Open Distribution of Economic Values” (MODEV).

Bitcoin is the first MODEV project, it allows people to create value out of thin air, and can send and receive these values ​​publicly. Popular memes such as “anti-censorship” and “become your own bank” have successfully attracted a large number of loyal early adopters of liberalism. However, if you understand the ultimate growth driver of MODEV, you will know that the role of these memes related to Bitcoin is ultimately limited. After all, liberals are only a minority in society (accounting for 7 of American adults). -10%). To reach a wider audience, you need a different concept from technological utopia or unofficialism. At the same time, if you know MODEV, you will also know that strong holdings (as many people call Dimond Hands) are not good for the long-term growth of a project. Because it accumulates growth income disproportionately to OG, this is completely contrary to MODEV’s concept of “equal value distribution”.

Following this line of thought, you will find that smart contracts will be inevitable because they can use blockchain technology to bring more MODEV modes. You will also find that it is only a matter of time before PoS (Proof of Stake) replaces PoW (Proof of Work), because the former allows the economic value of the blockchain ecosystem to be distributed to all users through the staking mechanism (staking), that is, to enable more MODEV mode also has better environmental benefits. And if this idea can be implemented well, projects like Helium, Gala, and Render are almost certain high-quality investments, because they are essentially playing the role of MODEV in their respective fields. And public chains like Solona, ​​Avalanche, and Luna are destined to flourish, not because they are more decentralized or paying more attention to privacy, but because they can carry out large-scale value distribution (Scaling) at a lower cost and faster speed. , This is currently the main technical bottleneck for the realization of larger-scale MODEV through blockchain.

Looking ahead, we are bound to have more exponential growth MODEV waves and the investment opportunities that follow. If crypto wants to realize its historical mission of publicly distributing value to billions of people and bridging the old and new economic paradigms, it will be inevitable. Of course, the blockchain is only one of the potential technical tools for creating a new MODEV model. Once the official and Web 2 organizations realize the huge social benefits and economic energy of MODEV, they will also begin to seek different technologies to develop new MODEV business models.

The encryption wave is only about blockchain technology? Actually you are wrong...

The translator happened to see a similar point of view from Jack Dorsey (former Twitter CEO) at the time of writing

As an investor, you should not be confused by fancy technical propositions or mysterious Token economics. In the final analysis, the question you have to think about is:

  • In the long run, can a technology bring MODEV?
  • Compared with other competitors, does it have a better MODEV mode?
  • Are there any signs that MODEV is happening or continuing to happen in this project/platform/protocol?

If you understand that MODEV is the growth driver of all new technologies, you should know that being a “only theory” (Maxi) is of no use to you. The crypto world is developing rapidly, and its rapidly growing areas will continue to change. Although no one can accurately catch every wave, keeping an open mind will give you a greater advantage than most people.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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