Recently I did a private webinar on security tokens, crypto assets, and the Infinite Fleet MMO game we are developing, and a question from the audience prompted a small lightbulb moment, which led to me writing this short essay.
A struggle of working in such a novel industry like crypto is that often times, it is challenging to pitch our vision and ideas to audiences who are not familiar with this space. In a way, it is akin to explaining a chemical reaction to a non-chemist who is completely unfamiliar with the periodic table of elements. As a novel industry (~10 years), there are many requisites to understanding where value propositions lie within the crypto space and the technologies associated. This has often led me to scratching my head asking myself, “how can we explain things better to people?”
During our recent webinar, someone in the audience remarked how a technology like Bitcoin seemed so irrelevant and difficult to grasp 10 years ago, yet is now becoming a mainstay of our world. The remark was addressed with a succinct but fantastic answer by the webinar host, Yulgan Lira (CEO of Colb). Lira said,
“when trying to understand a new technology, you can always start by looking at the problems and inefficiencies within the current system.”
A simple statement, yet it really made things click.
Instead of trying to explain why Bitcoin will save the world and why tokenized securities offer many benefits for investors and issuers alike, perhaps we should ask people — are you 100% happy with the current options at your disposal?
In most cases, the answer is no. This is not saying all existing systems are bad — it’s more a case of humans being hedonistically innovative creatures that always try to find ways of doing things which are better and more time- and cost-saving.
It triggered me to think of examples across different spectra of technology and business and reflect on why some “analysts” seem so stubbornly stuck in the past and refuse to address the effectiveness of certain novel concepts even if it’s as obvious as plain daylight.
To me, a person who’s studied Bitcoin and economics for several years, the benefits of Bitcoin seem obvious. But for someone unfamiliar, it is not quite so obvious at the beginning (myself included). So, in order to understand why Bitcoin exists and will continue to exist and flourish, one can start by asking — what are the problems with the current system?
For example, in the current banking system, cross-border remittance is a terrible experience. At most banks, an international wire transfer typically costs $25–50 for the wire fee, plus an extra 2–3% taken off the mid-market foreign exchange rate. On top of the expensive fees, the wire transfer takes anywhere between 1 to 3 days — or even longer, if your bank decides to treat your transaction as “suspicious” for whatever reason. For the user, Bitcoin does all of the above better.
Central banks around the world have gone money printing crazy in 2020, with the US Dollar monetary supply increasing by trillions since the start of the COVID pandemic. With central banks being so frivolous with the printer, what will happen to your savings in fiat currency? Currency devaluation and major inflation are nearly inevitable in the future (and already happened in countries like Turkey, Argentina, and Brazil). Knowing that, Bitcoin’s value proposition becomes rather obvious. A fixed total supply, not issued by a central authority, and a fixed inflation schedule — it’s easily a better store of value than any fiat currency.
Another example. The current securities market (stocks, bonds, other financial assets) functions via the presence of many middlemen. When I want to buy a share of $SQ from my Interactive Brokers account, the brokerage must execute the trade for me by shopping for ask orders at a third party securities exchange such as the CME. This means that there are at least two or three intermediaries between the issuer of the security (Square Inc., the company) or even the seller of the security, and the end buyer. In the information age we live in, this high number of intermediate steps seems absurd. Therefore, for the user, it makes sense to have something like tokenized securities on a blockchain which would allow immediate and 24/7 execution and settlement in the transfer of asset ownership between seller and buyer.
In hindsight, the same framework can be applied to asking questions in almost every area of life, where a novel technology or business has already or is providing better answers.
Taxi companies monopolizing fare rates and not operating large enough fleets? Uber answered those questions.
Meeting new people required too much time investment for too small a sample size? Tinder answered those questions.
Investment access in early stage companies are reserved only for insiders and institutions, fuelling the further asymmetry in wealth growth opportunities? Companies like STOKR are now answering those questions.
Live in a city like Lagos, Nigeria, where doing daily chores can take up huge amounts of time due to the lack of efficient systems and services in place? Companies like Eden are now answering those questions.
All of these examples are proving that, whatever novel technology or methodology that brings better value propositions to existing systems, will always win in the long run.
As humans we have a tendency to resist change, yet at the same time we all aspire to have better solutions to our problems in everyday life. I guess it all comes down to how relevant a specific problem is to a specific individual. The big picture, however, dictates that we should indeed ask questions and embrace novelties to find asymmetric opportunities.
Society around us is currently changing at a pace more rapid than ever in history, and the way to understanding the future is therefore to look at existing systems and seek where the problems lie.
So, instead of helplessly trying to explain what people don’t yet know, perhaps the better way is to ask questions on what people already know. Those questions should naturally lead people to question what they know, and from there, they will want to know what they don’t yet know.