Three more things ...
Is web3 working?
Turns out I was wrong. I did have something left to say. So, this web3 thing – is it working? Well, seven years down the line, I have to say the only thing that I can see working – after a fashion is bitcoin/Bitcoin itself. And that isn’t a means of exchange or unit of account, in any meaningful way yet, (there are experiments to the contrary, like in El Salvador) but bitcoin is just a store of value today, and it does that in a speculative fashion. Now, it’s not that we don’t need a fairer, more democratic, more self-owned web/internet. We really, really need that. Rather it is that this decentralised governance of the internet/web needs so many trade-offs in scalability and security, that there is very little left after all that. If we (or rather you as I am retired now) can overcome these trade-offs in a meaningful way, then there are wonderful business models for a collaborative web3 that the enterprise can be reborn around. That is where I focused my energies – the business model for web3. I still believe passionately in the potential for good for all, in this new and much better collaborative internet that we call web3.
Can these trade-offs be overcome? Yes, there are so many working, so hard, to achieve that. Will they succeed? I surely, surely hope so. But it’s been seven years for me now and I still don’t see that this has been achieved. I have argued that it is still early days. After-all, I remember well when the same concerns around scalability (and security) were levelled at web 1.0. And that was overcome with spectacular results, But at a cost of that original vision of a more democratic, fair, and decentralised world. The world is better, for sure with the internet/web, but it is getting less fair, at some pace now, because we have evolved to an overly centralised web/internet. Too much power, in too few hands.
Market crash
Everywhere I look someone is predicting a market crash (Buffett, Musk etc. etc.) I've lived through 3 or 4 crashes now: 1987, 2000, 2007 and I guess you'd include 2019 but that wasn't too bad. In my experience there is one common factor, and let's include 1929 as well in this- none of these crashes were expected. I look at the FTSE and good and safe dividends can be acquired at reasonable prices The S&P is much more expensive, with much less dividends - and tech looks like at crazy prices to me. Just like in 1999. I look at inflation and the money supply since the 2007 bank bailouts and the covid printing press and I think that inflation is here to stay.
So interest rates are rising into a recession, if we get one now. So what to do? I made my mind up - did you? I think owning real stuff is important. I'd look for good dividend paying stocks at reasonable prices. I'd own my home. I'd hold enough cash to fund a few years and to buy distressed assets. I'd expect inflation. I wouldn't hold fixed interest assets in countries with a lot of government debt (that'e pretty much everyone) and any I'd did hold I'd be prepared to lose it to inflation. I think that that we are the very end of Keynesian economics and are going back to Austrian- Monetarism. Maggie Thatcher style. It's back to 1970 then to 1979 to recover.
The 1970’s were like this in the UK. My Dad fixed his mortgage at 6% in 1969 and by 1975 we had 27% inflation. The government tried to restrict wage inflation to 5% but my Dad’s employer just paid him in other ways - e.g., this is when the company car for managers, who didnt need them, was born. It felt like you were just given the house. We had mortgage queues as the Government tried to restrict credit growth. The 1970’s were a total disaster economically. If I were a betting man, I’d bet that our future now will have a lot in common with the 1970’s.
A new order
And there’s one more thing I’d like to say, afterall. One of ways that I think of BTC is rather like insurance. You insure your house against fire. If it burns down you are damn glad of the insurance. However, if your house doesn’t burn down, then the day that your policy runs out then your policy now has zero value.I think of BTC as insurance against the collapse of the USD as the world’s reserve currency. If the USA’s national debt continues to compound faster than productivity or GDP growth fueled by the technology (and other) sectors, then it is just maths. In not that much more time the USD collapses through inflation. Just like Rome or any other hegemonic power throughout history has collapsed. There is nothing new under the sun. And don’t listen to Peter Zeihan’s criticism of BTC on economic grounds. BTC would not need to be collaterised 1:1 against any new reserve currency just as the UK only held 20% gold to the GBP when the GBP was the world’s reserve. However, in the words of Warren Buffet. It’s never been a good idea to bet against the US. It is quite possible that all this QE (money printing) has bought enough time for the hard work of entrepreneurs to use new tech to drive new productivity growth (just think AI) to gain the needed new GDP/income to bring that debt back under control.
Blockchainthoughtfortheday
I've got (probably) nothing left to say, so long and thanks for all the fish. #blockchainthoughtfortheday
Do hope not only your hands still work, but hope many years to come by listening to your wise comments. Thank you Andy for writing. Best
Web 3 Operational Design, Strategy, Risk Mitigation | Enterprise Blockchain | Venture Capital Board Advisor, Digital Assets
1yBravo Andy Martin ! I have recommended you as a follow to everyone I have met. Your contribution to the blochchain community has always been understated. Best wishes for all the great things you do moving forward. You’ll be missed!
Chartered Management Accountant. ACMA CGMA AICPA
1yA Perfect Circle, A poignant title for the article, Best of luck 🍀
systeeminnovatie I transformatie I radicale verandering I nieuwe economie
1yThank you Andy, you are a source of inspiration to me. Best wishes, Patricia
Community Development Chair at IEEE Blockchain Technical Community
1yThanks for sharing over the years, Andy. You’ve always welcomed differing viewpoints in a respectful way that allowed the discussion to continue rather than stop short. I believe you’ve also created some lasting friendships here and know that many of us would still enjoy your Thought for the Day whenever you are up to it - even if it doesn’t include blockchain :)