The Inevitable Future Enabled by Crypto Assets
I remember reading quite a while ago that one of Google’s design policies for new products was to imagine a world with unlimited bandwidth and ever decreasing cost of computer memory. They knew that technological advances would keep making Internet speeds faster and that, similar to Moore’s law, computer memory would become cheaper and cheaper every year. I.e. by realising the inevitable road ahead they could focus on designing the best products for this future world.
In a similar vein, Balaji S. Srinivasan, former CTO at Coinbase, recounts how the Internet was mocked back in 1988:
The Onion didn’t see the inevitable future of cheaper bandwidth that 20 years later would make streaming services like Netflix ubiquitous.
I’d argue that when Bitcoin was launched in 2009, Satoshi Nakamoto had showed the world the inevitable future of non-government based money. This was something that Nobel Prize winner Milton Friedman had foreseen 10 years earlier in 1999:
With the realisation that money is not something arbitrary that humans choose to adopt but rather that money with the best properties tends to win out over time — Bitcoin’s future looks bright. Fiat currencies have been inflated over time as governments can’t resist printing more. Secondly, security is unprecedented for a decentralised digital system like Bitcoin:
Many may dismiss Bitcoin due to things like:
Volatility — Crypto is known for being highly volatile
Custody — Doesn’t fit into existing custody models
Hard to understand — Crypto is a new paradigm that takes time to grasp
Poor UX — Crypto is a new technology where UX hasn’t been prioritised
We should ask ourselves are these really things that can’t be overcome with enough time and engineering effort? We won’t get into the details here but we certainly believe that the above issues can and will be solved over time.
Just as Bitcoin made non-government money inevitable and unstoppable, Ethereum showed us that smart contracts are inevitable. Smart contracts are contracts executed by software instead to humans. Some of the use cases of smart contract might take a long time to play out and some more exotic versions of the future enabled by smart contracts might never come to fruition.
However, what is exciting to us is that you can see a first glimpse of a new, more decentralised world, powered by smart contracts. Early applications include things like Ethereum based Compound where you can borrow and lend in a trust-minimised way:
With trust-minimisation we mean that we don’t have to trust the solvency of a financial institution. Compound and many other emerging applications in the Decentralised Finance space are built with smart contracts on Ethereum. While these platforms are still not mainstream, you have to on-board people to Ethereum and in many cases install a browser app like Metamask, having global access to financial services flowing as freely as information on the Internet is a glimpse into a more inclusive financial future.
The book The Inevitable lists 12 verbs that will define our future: Becoming, Cognifying, Flowing, Screening, Accessing, Sharing, Filtering, Remixing, Interacting, Tracking, Questioning and Beginning. Thanks to crypto assets like Bitcoin and Ethereum, we would propose to add the verb Trust-minimising to the list of inevitable forces that will shape our future.