Largest Economic Boom in History

Recently I read that John McAfee stated that decentralized exchanges will trigger the ‘Largest economic boom in history’.

I think he is right.

I thought I would put in my two cents worth on part of why I think this is so. The biggest reason I can think of is that decentralized exchanges will help to get wealth creation back into the hands of many people. Instead of putting wealth in large institutions where it becomes a target for hackers and thieves we can all leave smaller amounts in our own control and still benefit from trading.

Centralized exchanges can stop trading on a coin any time they want and there is little any investor can do about it. The smaller coins (alt coins) are at a big disadvantage because of this and investment can be risky. Months or even years of efforts can be erased when exchanges stop support on a coin.

Recent thefts from even regulated centralized exchanges have just magnified in my mind the need for decentralized exchanges. Historically many exchanges have lost crypto to theft and even closed their doors.

If you store your crypto on an exchange it is not your crypto. At any moment the doors to the exchange could snap shut for a variety of reasons and you might not have any idea where the exchange is even located. This is a difficult lesson to learn the hard way.

I think a lot of this is preventing people from getting into the crypto markets. I expect that once decentralized exchanges become popular there will be a lot more opportunity to do trading and investment dollars will flow a lot more.

Once this happens services like Block Trades could be used more easily by casual investors and open the door to point of sale type processing for merchants. (If you haven’t tried block trades yet I would give it a go, it has always worked well for me)

Efficiency and wealth creation

Moving money from one location to another, creating loans and trading stocks or commodities has always resulted in big money profits. If you doubt this how can you explain the nice plush bank buildings all over the place? Transferring these types of services to a new more efficient way of doing them seems like it would drain wealth away from big businesses and potentially disrupt the financial industry.

There is no doubt these types of financial structures provide a much needed service. Very few of us could pay for things like a house and so require a loan from a bank. Yet so many people now are being paid badly and don’t manage their cash well. If you add confusing loan terms to mix and payment of basic needs on credit cards at high interest rates, financial disaster can strike with any large unexpected bill.

Default on loans in the subprime mortgage market triggered a financial crash in 2008. Too many people were stuck in really bad loans and had their property foreclosed on. Kicking people out on the street could potentially disrupt many lives turning productive members of the society into unproductive ones. Rather than bail out the common people, governments bailed out the banks and continue to do so with things like lower interest rates and quantitative easing.

Decentralized exchanges and moving to better more efficient ways of moving money around could help avoid some of these issues. I do think that the increased efficiency will cause a big economic boom.

One could argue that this is just a transfer of wealth from one group of individuals to another. From wealthy financial people and old money families to crypto enthusiasts. In a way this could be true but I don’t think the old wealth is going to transfer so much as new wealth is going to be created.

To me when we do something such as post a blog on Steemit we are kind of creating new wealth. It is not worth a lot at first but if we save it perhaps it will be worth more at some point. The early Bitcoin miners spent many years supporting Bitcoin without knowing what the outcome would be.

As investment dollars flow into things like Bitcoin the potential return on investment could be much greater than using those dollars for funding subprime loans.

The best outcome to me would be if many people could find a way to work and save for a few years and then just pay for their house with crypto. Why would you need a loan then? Loans typically pay much more than the initial amount to the bank. In the past some people could purchase their home with cash by saving it up. I doubt most people could pay for a car, RV, house, college education, or sometimes even food without a loan these days. This is not good for the economy imho.

Getting large amounts of money into the hands of many crypto enthusiasts could open up spending in many different and unusual ways. Space exploration, Nanotechnology, strange and unusual new toys – who knows what the crypto crowd will get into.

Thoughts about Warren Buffet’s statements

Warren Buffet does not like crypto. He’s made that perfectly clear. I guess the increased efficiency of moving large amounts of money without an armored car isn’t a big selling point to him.

He has suggested buying a farm and getting something tangible for your investment dollars. Then I suppose you could just hire a bunch of people to work and manage the farm and then your job would be to go to the mailbox and collect your check for being the owner of the farm.

Something doesn’t sound particularly right about this to me. If the farm is making money why would someone sell it? If it is not making money why would you purchase it? I suppose you could find some inexpensive land in some impoverished country and buy it and hire a bunch of people to grow banana’s on it, and then pay them next to nothing to maximize your return on investment, but something like that has been done before from what I understand about banana growing history.

The big question to me is why is the country impoverished? If it is, is it really fair to go in and buy all the best resources and use them? I would say there should be a better way. It seems like crypto could help bypass the types of regulations and corruption that leads to the impoverishment of many people and countries. For the past three hundred years many times the people have been struggling but the results of major changes always seem to work out the same. Perhaps it is time to try something different besides bailing out the ‘too big to fail’ banks with taxpayer money and instead let more cash flow more directly into the hands of people in the main street economy.

As always just my humble opinion on these things. Hopefully Warren Buffet doesn’t take things too personally, I’m sure there are many sides of these issues that I am not aware of and to be fair investing in farms could be a winning solution too, if done in the right way.

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Thanks for reading! I always value your support and comments. The pictures were taken by me with my Galaxy S9+.