Financial capital outpaces the installation of new technologies, in part because financial capital is responsible for speculating new technologies into existence.
Speculation fuels capital growth, and with capital a group of people has resources to deploy towards a shared vision at scale.
We saw this with railroads, electricity, automobiles, computers and the Web, and crypto has been no different.
Cryptonetworks have capitalized themselves into relevance over the last ten+ years, with the space most notably reaching for the trillion dollar value mark in late 2017.
In the process of capitalizing itself into relevance, this boom of crypto capital has built a native financial system to account for its very own bootstrapping.
While the other revolutionary technologies no doubt led to evolution within the existing financial system, none of them built an entirely new financial system from scratch.

Instead, they remained reliant on existing financial systems, placing power in predictable hands.
Blockchains can be thought of as 21st century accounting and production systems owned by “the people,” and so it follows that the space has pioneered a new financial system to displace the old.
This cypher-financial system is targeting:

-a global audience
-macro-and-micro resilience
-cost-superiority
-services designed for the 21st century & beyond.
While this cypher-financial system will ultimately arrive at functional equivalence with incumbent financial infrastructure, it will not stop there.

The base is superior, and so too will the end products be.
GLOBAL AUDIENCE: Unlike companies that seek users nation-state by nation-state, in cryptonetworks users are sought on a global basis from inception.
GLOBAL AUDIENCE: Unlike companies that own or rent servers to provision their services, in cryptonetworks a global set of sovereign servers perform the work for the network based on economic merit.
MACRO RESILIENCE: On the macro level, crypto’s financial system needs to be resilient to attacks of all kinds...

“Given enough eyeballs, all bugs are shallow,” and the open-source ethos of these softwares works to their security advantage over the long-run.
MACRO RESILIENCE: There has always been a fixation in crypto on ensuring security budgets of base-layer hardware is sufficient to reliably maintain and append to ledgers at scale...we must protect against “double-spends” that could erode trust in the accounting system.
MICRO RESILIENCE: On the micro-level, resilience to attack is important for the owner of any kind of property. Protecting property is critical to creation in the capitalist-geared world we live in.
MICRO RESILIENCE: This is where public-key cryptography has been huge for protecting property, and digital creations, at low cost. Remote seizure is nearly impossible.

Crypto is building protection-technology, and micro-resilience, into the fabric of online culture.
Together, these macro-and-micro resiliences make it such that no army is necessary to defend a cryptonetwork. Instead, the economics and nature of the network make it such that it is resilient to all attacks, by design.
In the vein of The Sovereign Individual, the lack of a military needed to keep cryptonetworks resilient & operating, is key to allowing these economies to operate at lower cost over time.

They require less extraction, because they are lower cost to run & protect.
COST-SUPERIORITY: To use a deep dive example of crypto’s superior unit economics, it is now possible to run an organization that is functionally equivalent to an investment firm, enterprise, or sovereign democracy for ~$16 a month on Ethereum: https://www.placeholder.vc/blog/2020/5/7/aragon-daos
COST-SUPERIORITY: In this case, that software was built by Aragon and sent to Ethereum's ledger...While the software requires occasional maintenance, which does have associated costs, the “dormant but live software” on Ethereum incurs zero operational cost until it is called.
COST-SUPERIORITY: When called, the user pays for the operations & the cost of these operations is set according to the complexity of the transaction for the Ethereum Virtual Machine (EVM).

Costs that the consumer is charged are commodity costs, with hardly any margin added on.
COST-SUPERIORITY: One thing that helps the operators of services on Ethereum is their costs are also much lower.

You can think of all the applications on top of Ethereum as sharing the capex & opex of the machines that run their operations, lowering the burden for each.
COST-SUPERIORITY: Similar to Ethereum, users of Bitcoin are paying to access the commodity block-space of Bitcoin’s 21st century accounting system.

There's a fee market for this access, where global miners have competitive pressures put on them to keep margins and fees low.
COST-SUPERIORITY: I expect the margins of these miners to look similar to electric utilities once BTC is fixed-supply, socially de-risked, and a massively used transactional network.

This is a globally-set margin, for a globally-provided utility.
COST-SUPERIORITY LEADS TO UNIT VOLUMES EXPLODING🚀🚀🚀

Time and again, low-cost services have taken massive share within our economies. If you believe in the gospel of low-cost, then you better believe in the promise of cypher-space provisioned services over the long-run.
FUNCTIONAL EQUIVALENCE: The rate at which permissionless financial services are popping up and iterating on Ethereum is mind-bending.

And make no mistake, the DeFi community has functional equivalence as a north star that will be surpassed.
FUNCTIONAL EQUIVALENCE: Functional equivalence as a pursuit is clear from the breadth and depth of talent that I have seen pour into the crypto space from Wall Street, Silicon Valley, and all parts of the globe over the last six years.
FUNCTIONAL EQUIVALENCE: Some will claim that because these cypher-systems are not yet functionally equivalent, they are a toy that will never get there, and should thus be disregarded.

That would be a grave mistake, as it confuses an instance in time with the longer-term trend.
21ST CENTURY SERVICES: One of the key value propositions of BTC -- an absolutely fixed supply -- is novel in the credibility with which the Bitcoin network is able to enforce it.

BTC’s commitment to fixed supply can be thought of as allowing it to preserve value through time.
21ST CENTURY SERVICES: A person can now fit near-unlimited wealth in their pocket & access it from anywhere with internet.

Allowing for the preservation of value through space & time is a sorely needed service for society’s 3rd millennium (Bitcoin on Mars, @elonmusk?)
21ST CENTURY SERVICES: With Ethereum, and so obvious that it might be forgotten, all asset types (equities, bonds, cryptoassets, real-estate, virtual land, etc) speak the same language & so there is fluid exchange between every asset so long as markets exist.
21ST CENTURY SERVICES: This stands in stark contrast to the meatspace+digital economies, where each asset class has its own exchanges, custodians and fiefdoms, all of which inject capital and time costs into the transfer between fiefdoms.
21ST CENTURY SERVICES: For a retail user, sending equities from one custodian to another in the meatspace+digital is at least a multi-day or multi-week affair, whereas on Ethereum that transfer would settle in less than ten minutes.
21ST CENTURY SERVICES: A unified and global language for assets is what causes some to speak of Ethereum as a future global-settlement layer.
21ST CENTURY SERVICES: More obvious in their novelty, the Ethereum community is inventing new financial services regularly.

With composable innovation, this rate of innovation is accelerating...flash loans, constant-function market-makers, asset managers that pay you...♾♾♾.
While both Bitcoin and Ethereum are decentralized and open-source, and part of the same movement, they are providing different components of the financial services that the cypher-space needs.

Their different "value-adds" will become more & more obvious with time.
Regardless of what happens with individual networks, financial services will be followed by a more nuanced build of various socio-economic institutions, all of which will rely upon this shared financial infrastructure.
Socio-economic institutions will choose to use cypher-infra for its global accessibility, resilience, cost-superiority, eventual functional-equivalence & novel services.

Consumers will consume services from these networks, and their embedded institutions, for the same reasons.
If you can see the track that these cypher-economies are on, then you will also see there’s going to be a long-term war for economic-share between cypher-economies and the meatspace+digital economies of today.
There is only so much time and attention that the eight billion Homo sapiens on Earth have, and within that time and attention, only so much capital that can be dreamt up and justified.
Anyone who knows both financial systems will admit to the superior foundation that blockchains represent.

Otherwise, why would every major financial institution, consulting firm, and tech-giant have their own blockchain research and implementation arms?
The transition just takes time, but the flow of talent and adoption is only going in one direction. To ♾ and beyond!
You can follow @cburniske.
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