Capital has been getting ‘cheaper’ over the years. To navigate the global pandemic governments across the world have been printing money. In fact almost a fifth of ALL US dollars were created this year (https://tinyurl.com/sdk95jnx). I’m sure value investors across the world over are at odds with this – wealth destroyed/ depleted at alarming rates. Sadly, saving money as we were taught by our parents didn’t really help us grow wealth – it didn’t even help fight inflation; and when governments can debase currency at a whim -citizens of the world have sought ‘stabler’ alternatives ie. gold and crypto assets such as Bitcoin and NFTs (Non Fungible Tokens). Just imagine allyour hard earned monies over the years – they simply exist as a database record in a bank somewhere (and weve seen how a government e.g. Argentina and Latin Americas can ‘tame’ FX markets).
But you know what’s funny? Not much of it is reallocated/deployed for innovation; most if not all funding has been focused on growing capital, operational efficiencies – what would be PresentForward thinking according to Mark Johnson’s book: Lead from the Future.
The cryptocurrency movement – actually blockchain – has much to do with Trust. In this case, distrust that governments will be devaluing currency, e.g. as of this writing, the US dollar is projected to lose~ 50% of it’s value in 7 years! Fiat, which is government issued money, is used to pay off huge debts and deficits – and inflation. The author is highly interested in the history and psychology of money, but this book isn’t about that. This book essentially posits that Experience Equity (ROX) is a new asset class – and shares many similar traits with cryptocurrency. While Bitcoin and altcoins are peer to peer, decentralised and is built atop the blockchain network on smart contracts – this essentially means there’s a ledger for all to see. Crypto bulls argue that it’s this transparency that cements trust – and contrary to what many governments claim, The majority of cryptocurrency is not used for criminal activity. (https://tinyurl.com/6pm3y29p)
With the Web3 and metaverse upon us, it only seems fitting that cryptocurrencies become the (new) store of value – its common sense really, as they’re all built on the same network and fundamentals.
Looking at things from a macro economics lens, we’ve entered into a phase of the Experience Economy – probably exacerbated by the global pandemic – that I call the (Human) Presence Economy. We’ve had several iterations since the Experience Economy was introduced back in 1998 by B Joseph Pine II and Joseph Gilmore in their seminal book (https://tinyurl.com/p22y29ss). The 2020 pandemic introduced us to the Low Touch Economy, with everything going contactless. Now, as we enter the metaverse, we recreate presence in multiverses and alternate realities. With all that’s happening it’s clear
digital trust will become more important than ever – so important in fact, that it would ‘underwrite’ how we live, eat and play – in all our realities
I predict we may even have an Human Experience Coin (HXC) in the near future! That would be how ROX becomes a store of value. And yes it would be interchangeable with all other crypto currencies and assets! In the future, human experiences will come with a premium; almost everything else will be augmented with AI.
You’ve got to be rich to manually drive an ICE vehicle – everyone else will be on environmentally friendly EVs. Not to mention you’d need to be insured (heavily) to even drive manually – everything else will be on autonomous, self regulating networks and circuits!
With AI the human experience will become increasingly valuable; the wealthy of the future may be defined this way – maybe these premium human experiences and crypto assets (think super limited NFTs) might be valued/exchanged using HXC. Just recently in August 2021 OpenSea (currently largest marketplace for NFTs) did a record $ 3..4 billion transaction volume -investors have offered a whopping 10B in valuation for OpenSea.
Every iteration of the Experience Economy has shown us a new trust and empathy dynamic. The Low Touch Economy went contactless; demanding increased trust and transparency. The author feels the last 2 years was unprecedented, yes, but also an opportunity for governments across the world to shine. And most did. It was clear how the gradual erosion of trust has taken place – citizens really needed their governments to protect them and keep them safe. It wasn’t really about ease, simplicity or convenience – things we usually associate with CX. . Actually CX also means Connected Citizens and Citizen Experience. In my opinion, the public sector has (successfully) upped the ante on XM. They also bailed out industries and stimulated/ propped up economies (part of the reason for printing more money).
Now as of this writing, Facebook has been renamed Meta. Satya Nadella and Microsoft has announced similar, lofty ambitions for the Metaverse – with PowerPoint being an entry point (like a port key if you’re a Harry Potter fan). It’s all down to recreating human presence. Zuck and Satya gave us a glimpse of how we can live, work and play at the same time, literally. How we may exist in multiple realities and multiverses. In the Metaverse the common laws/physics of XM no longer holds, it seems. We may need to go into the quantum realm.
Quantum supremacy is not just an AI arms race to crack blockchains – it’s about laying the fabric for the new multiverses we will now occupy and persist/live in. To the author it’s a parallel singularity of sorts. The AI singularity when it becomes ‘self aware’ but for HX it’s about existentialism and omnipresence. They go hand in hand.
What’s not so apparent however, is that throughout these years and multiple iterations of the Experience Economy- , not much has been spent, ie time and effort, in generating, Experience Equity (ROX) .
It’s easiest to think of ROX as a new assetclass – much like Bitcoin was in 2012. Obviously there’s also ETH and alt coins, together cryptocurrencies have surpassed the 3 trillion market cap as of this writing. I won’t go into the psychology of money (there’s a good book on that), but in short investors are looking for alternatives to fiat and gold.
In August 1971, Us President Nixon severed the direct convertibility of U.S. dollars into gold. And we already know that governments are printing more money.
Another example on inflation: using fiat $1 might buy you less and less of a loaf of bread as the years go by. Using crypto in contrast will get you more (bread). It’s interesting how that influences purchasing decisions. We’d readily buy a house (financial asset) because holding cash might not be as wise as our parents thought it to be. However, if my portfolio was all crypto, an appreciating (trend past 10 years, average CAGR 200%) I might ask myself more questions e.g. would buying a house return equity? Would buying stocks and equities offer the same returns (SP500 growth 7-10% annually is not guaranteed – although the US equities market have been phenomenal the last century). Why wouldn’t we have more positions in Bitcoin- logically speaking it’s the best of both worlds: Wall Street wolves may ridicule us for having dominant crypto portfolios vs xennials and the young ones who might say “ Ok, Boomer – for holding a Boomer coin” . That’s because they’re into altcoins and other more progressive projects linked to NFTs, gaming and the metaverse. We might be in a good position straddling both worlds 😉
Some companies are bucking this trend eg Microstrategy’s Michael Saylor. Tesla famously accepts Bitcoin as payment – Elon is unabashedly a Dogecoin supporter, the community even calls him Dogefather. Mastercard and other financial stalwarts are entering the ring as well.
These “new” companies are phenomenal at generating ROX. They’ve a strong sense of purpose and innovate incessantly.
Elon’s purpose to make the human species multi planetary is his life’s work. Amazon is the most customer-centric company in the world.
