Investing and funding is going to be one of the biggest changes we see coming from cryptocurrency. This is something we discussed in the series of articles pertaining to the Hive Backed Dollar. If we step back a bit further, we can see how radical the changes can be.
One of the use cases for HBD is for the coin to be used for investing and funding purposes. This is where cryptocurrency can achieve real world impact.
In this article we will discuss how we the power of cryptocurrency spread among billions of people could impact things. It also will show how limited we are within the present system.
For the sake of this discussion we will operate on a single idea: spending $2 per year on 10 different causes. In other words, we each us $20 worth of cryptocurrency for funding purposes.
Money Shortage
People do not realize how severely limited we are at present with money. There is a shortage of both USD and quality collateral within the international financial system. This is causing a great loss of productivity. Since the Great Financial Crisis, the breaking of long-term trend lines.
Without the necessary tools to fuel the economy, we end up with a chart that looks like this. The US alone has lost trillions of dollars in output. Consider all the ideas that did not get funded due to the absence of resources.
As society progresses, the expectation is that it will keep expanding. This makes sense since we tend to want the standard of living to increase for all of us. Would anyone like to revert back to the days before the Internet and mobile phone technology? How about a life before anesthesia? Novocain? Cars? Planes?
You get the point.
What all this has in common is money was required to research, design, develop, manufacture, and market these items. Today, we are glad we have them but, at one point, they were just ideas.
As the size of the problems grow, so does the money needs to find a solution.
$20 Per Year
Here is where we will do a bit of a mental exercise.
There are 5 billion people on the Internet. If each of these was involved in cryptocurrency and utilizing Web 3.0, we could see where everyone had $20 for this purpose.
Imagine taking $20 and splitting it among these 10 different fields. With 5 billion people, that would be $10 billion for each.
- Cancer Research
- Asteroid Mining
- Battery Technology
- VR/AR
- Quantum Computing
- 3-D Printing
- Rocket Technology
- Geo-Thermal Technology
- Decentralized Cloud Provider
- Robotics
Do you think we would make a difference with $10 billion annually placed into those fields? We could fund 5 start ups, each having an annual budget of $2 billion.
The choices were selected at random to illustrate the point. With this much money flowing in each year to the specific area, we surely would see a difference in some of them over a 5 year period of time.
Obviously, this is focusing upon the "moonshot" projects. We can apply the same concept on a smaller scale. Take the same $100 billion in total and spread it across 10,000 different projects. We are not likely to cure cancer with this approach yet we can solve a broader range of problems.
Trillions Of Dollars Required
When we factor the advancement of technology with the money shortage, we can see how much is being lost. Looking at the above chart, we can see the US, since COVID started, is $508 billion behind where it the 2009-2019 trend was. It is easy to see how this just keeps getting worse.
Cryptocurrency solves this problem.
Many talk about "money printing" without truly understanding how it all ties together. Even if the major Central Banks were printing money that actually got into the economy (they don't), we can see there is an enormous need for it.
According to some simple calculations, to get back on track and keep up with the funding of the different technologies, we are going to require more than $100 trillion in additional money this decade. The difference in the global trendline going into the Great Financial Crisis is already in the tens of trillions of dollars. To make up for that is going to necessitate a lot more capital.
The present system generates money through the commercial banking system. Here we see where loans are how a credit based monetary system expands. The question is do you see banks adding another $100 trillion to their lending?
Of course not. That will not happen especially since banks cut back on their overall lending since the GFC.
Here again is where we see the opportunity for cryptocurrency to step in.
Find A Problem And Solve It
Many ask what problem does cryptocurrency solve? In light of this article, the answer is clear.
Cryptocurrency has the ability to make up for the extreme shortfall in money that is operating within the general global economy. Through the creation of trillions of dollars worth of cryptocurrency, we can use that money to fund what the world needs. It is likely this is the only source that it is going to come from.
Most do not see the funding shortfall the world is operating under. We understand there is a problem because we do see the results. Economic growth rates are slowing and workforce participation rates are declining. Large sections of the population are not advancing, at least not at the pace they were before.
Of course, politicians will point fingers while telling you who is to blame. The media will pile on, usually promoting some type of agenda. In the end, no matter which party is in control or what ideology is touted, the result is the same for the masses.
Cryptocurrency is something that radically alters this picture. The major problem it solves is the issue with monetary elasticity. The present system simply cannot keep pace with the expansion of money that is required to keep things growing as we need, especially in the realm of technology.
Here we see the power of cryptocurrency. Many ask what is the value in it? By now the answer should be evident. Cryptocurrency can simply be the funding mechanism the world needs. Since there are tens of trillions of dollars in lost productivity we have to make up for, accessing the capital to get things back on track if vital.
Many alluded to the Great Stagnation that we see with technology. Even though things are advancing, the pace is slower. What most overlook is that it is not entirely a technological issue. It is equally, if not more so, a monetary situation. The lack of funding is causing major stagnation in technological growth rates.
And this is something that cryptocurrency solves.
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