This past week, I was lucky enough to participate in a small business networking event in St. Pete. The goal of the golf tournament was simple, have fun, meet new people, and most importantly network. We had participation from every industry, from financial services to information technology, sports medicine to electrical engineering. A lot of topics were discussed, a lot of beers consumed, and overall a fantastic event. So why the hell am I writing about it?
Following the round, all the participants really started dividing into business networking. Who are you and can you do something for my business?
Maybe it was the beer or maybe it was the bourbon but the discussions went all over the place. From lending nightmares that business owners went through, to dealing with personnel issues during COVID. But one surprising topic was cryptocurrency. I expected to hear about this from the IT guys or the advisors, but these discussions completely came out of the left field.
Construction companies were looking to potentially accept projects for customers looking to pay with cryptocurrencies. Bankers were discussing accepting crypto as a sort of deposit to collateralize loans for their clients. Whatever the industry, I was thoroughly impressed by how many individual businesses were even considering crypto in their business model.
Even in a legacy industry like Electrical Engineering, I heard business owners talking through using Ethereum or some smart contract platform to ensure jobs are paid for as work progressed. No longer waiting for legacy Human Resources departments to review the work or cut a check, but rather paid as their work was completed in stages. Is it possible the crypto industry can disrupt these legacy industries?
Most people have followed Web 1.0 with the creation of the internet. This takes us back to 1999 with companies like AOL, eBay, and Microsoft office. From the initial launch of Web 1.0, we moved from physical files to computer files. From phone messaging to instant messaging, and the beginning of software entering our markets.
For Web 2.0, we got a massive launch of software companies. From Facebook launching one of the most successful marketing platforms in history to Google creating a “God-like” messaging system to figure out the answer to everything. Where Web 1.0 built the infrastructure, Web 2.0 built the scale.
So this brings up to Web 3.0, another name for what tech insiders are considering the crypto economy. It is still VERY EARLY DAYS but we are beginning to see the next evolution of where the internet is going.
Now to this point, I still believe the majority of the crypto market is a waste of time. There is a significant amount of froth in the NFT space, the alt-coins market is full of shit, and even some of the major coins are striving for success. This past week, a fake news article was circulating that Walmart was using Litecoin as a payment system. Within about 20 minutes, Walmart denied and an outpouring of negative reviews from major crypto backers crashed the coin. These pump and dump schemes are never going to even but they do hurt the legitimacy of some areas of this market.
That said, there is an insane amount of potential with smart contracts. Just as Facebook will automatically send you an ad for some product you saw in your Instagram feed, it’s entirely possible to embed major financial transactions into the internet. Here are some ways Web 3.0 could change our financial markets:
- Rather than giving Apple your health data for free, you could be compensated for contributing your health data into some digital database each time you wear your device…automatically.
- Real estate transactions could settle almost instantly if everyones financial standing and credit was stored on a blockchain.
- Imagine eliminating the entire sales process from a car sale. A blockchain has all of your financials and payment methods organized before you reach the dealership.
These are only a few ideas but the thought process is all the same. Create a rule and exchange some means of value if the rule is satisfied. These nightmarish industries like the auto sales process or purchasing insurance could be systematized into a simple rules-based blockchain.
Now, we are still in the first inning and we have a LOT of game left to play. But, you need to not fight the future. Go into these insane industries and look for what could happen. Remember, it’s not the ones who are consensus who make money. It’s the investors who focus on what’s non-consensus…..and get it right