ALT MONIE || CRYPTO IS JUST THE BEGINNING || EPISODE - 1 || SONIA DUMASAuthor: Sonia Dumas | September 13, 2021 | 0 Comments | 3 View(s)
Alt Monie focuses on capturing opportunities fueled by global trends, tech, eCommerce, crypto, economic cycles, marketing, and irrational emotions.
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I'm Doug Lehman with our resident educator, Sonia Dumas, blockchain technology, cryptocurrency, bitcoin. What's it all mean and why is it relevant today, Sonia?
So, what we're experiencing, Doug, is the evolution of the Internet, the migration to Web 3.0. Currently, we live in a Web 2.0 world, which is driven by mobile access, social networks in the cloud. And we're migrating into Web 3.0, which is largely built on three new layers of tech innovation, edge computing, decentralized data networks and artificial intelligence.
Now, what does that mean? It means we're moving to a web that's more open and censorship resistant. It will remove third parties from transactional processes. It also means moving to a web that's trustless. It's verifiable, it's tamperproof, it's borderless. But the fun and cool and exciting part is that we're creating brand new financial opportunities that we've never seen before. So just like how Uber and Airbnb turned every car, house and condo into an economic activity that didn't exist before, Web 3.0 is radically changing how we do life, radically changing how we do life.
And it's definitely relevant in more ways than one. In fact, I just read an article by Seth Godin called, “Why Blockchain Matters”, and I shared that with you. What was your insight on that article?
So, I read that article as well. And one of the things I like about Seth is that he was able to disseminate what’s blockchain, which is really just a change agent. And he made a great point to point out that understanding what blockchain and cryptocurrency is about is more productive than simply being forced to deal with it later. You know, there are those who are approaching cryptocurrencies and blockchain with sideline skepticism. Well, I'm an advocate for intellectual curiosity. Stay curious at Alt Monie.
I encourage people be curious to understand why this is important, why this is relevant. Otherwise, you may find yourself in a similar fate of countless taxi drivers. Right? They were hit with a tsunami of the ride sharing world that came out of nowhere. And what's interesting also is that our mobile devices are being empowered to make everything more efficient and faster, which means anything and anyone that acts as a bottleneck, whether it's a time bottleneck, a money bottleneck in a transaction, will either be removed or reduced. And this is the level of disruptive global change that's unfolding faster than you can imagine.
Let's talk from a high-level perspective on blockchain technology, how it's being implemented and used today.
So, some of the real-world use cases of blockchain technology spans every industry, and I like to look at it as all our industries are being optimized, utilizing technology, blockchain and cryptocurrencies. So, you have industries like energy supply, chain management, insurance, real estate, and journalism that are utilizing blockchain to either verify data, to be able to transact on new financial levels, to be able to track information in a very secure, tamper proof, verifiable way.
Then there's identity management whether it's voting or being able to get special access to information, blockchain allows for identity management to go to a completely different level than what we currently experience today. And then you can look at advertising entertainment in the arts, especially with advertising and entertainment. You have content creators now being given direct access to their audiences in a way that didn't exist before and creating new incentives, both monetary incentives, but also experience incentives that never existed.
So, let's get practical here. Let's talk about the money, the impact of cryptocurrency when it comes to business and e-commerce.
So, one of the quotes that Robert Kiyosaki is known for saying is that it's not how much money you make, but how much money you get to keep, how hard it works for you and for how many generations you get to keep it for. And so, one of the visions of cryptocurrency is to allow you to keep more money and have it work harder for you than ever before. And so, one of the things we can do is we can look at credit card payments as an example.
What would it mean to your business, to your life if you could recapture up to 70 percent of the credit card fees you currently pay to your credit card merchant? Could you expand your business, hire more help, give yourself a raise, offer more employee benefits? So, as it stands right now, blockchain transactions are somewhere around one percent, whereas a credit card transaction is around three percent. So, if you are spending, for example, one hundred thousand dollars in credit card fees every year and you're able to capture seventy thousand of that back, what kind of economic ripple effect will that have for businesses, especially small businesses?
Now, that doesn't mean that Visa and MasterCard and PayPal are all of a sudden going to go away and not be relevant. In fact, what they're doing is they are creating fast tracked crypto payments programs. So that way their current systems can stay relevant and flexible and adapt to this new way of doing commerce. And so, it's going to be essential. I believe there was a venture capitalist that said all companies are going to become software companies.
It's going to be essential to be able to utilize blockchain technology, Web 3.0 for your business to be optimized to maximum efficiency. And basically, there's a concept called maximum extractable value. How do you extract the most value out of the systems and processes that you use? So that way you can have more money in your account to be able to expand your business, raise your income, hire more employees, and live a life that we have not had the opportunity to live at this new financial level.
Well, speaking of financial level, let's talk a little bit about the disruption of Web 3.0 in the banking industry. Talk about how banking, the impact of the disruption when it comes to fundraising, securities, loans, and credits that banking is being disrupted by Web 3.0.
So, payments like Bitcoin, Litecoin, Ethereum, Zilliqa, Cardano, right. They all use blockchain technology to facilitate faster payments at lower fees. And that has a direct impact on the profit and loss statements, not only for small businesses, but enterprise businesses as well. And then if we want to look at fundraising, we're all used to IPOs well within the crypto ecosystem there's something called ICOs, initial coin offerings. And this has emerged as a new way to launch a company to get financing that basically offers open access capital, and it bypasses the expensive, time intensive, bureaucratic, traditional way of capital raising.
So, for the first time, everyday people can become early investors in these software projects. Now, we'll put a disclaimer. Keep in mind that also opens the doors for countless scams. If you don't understand the risk, if you don't understand what the project is doing and make no mistake about it, any time you're on the cutting edge of technology, that also means that you're exposed to human error, greed, and ignorance, which invariably will cause damage in the short term.
But it is clear that most Web 3.0 companies actually want to create as safe level playing field as possible in order for us to use and access these opportunities. And then talking about securities. We have the first time ever the ability to tokenized assets, which in its simplest form is turning an asset into a coin that's tradable globally. And so, imagine a real estate investor that can tokenized their residential commercial project and sell interest in it to anyone, anywhere.
And then lastly, let's talk about loans and credits. Imagine a world where your credit score is irrelevant. Web 3.0 is making it possible to remove the gatekeepers of the loan and credit industry while at the same time making it more secure to borrow money at a lower interest rate. And for the first time, you and I can participate as lenders to earn interest far and above what the banks are currently offering us. So that's just four ways in one industry that Web 3.0 is causing disruption.
Now, we definitely touched a little bit about securities, but let's talk about some of the skeptics out there that will say, well, bitcoin or blockchain technologies, they could lead to a lot of illegal activity.
So, in my research, which you can view on Alt Monie, what I'm finding is that any time you have human beings and money, of course, there's going to be illegal activities, everything from money laundering, contraband, and terrorism. That happens with human beings and money put together. However, there was a report done recently by Michael Morell. He's a former CIA acting director, and they looked into Bitcoin and illicit use and finance. And based on the research, they actually came to two conclusions. One, that the generalization that Bitcoin is used for illegal activities is significantly overstated.
But more importantly, this was kind of cool is that they see Bitcoin transactions as an underutilized forensic tool that could be used by law enforcement and the intelligence agencies and community to identify and disrupt illicit activities. So simply put, blockchain analysis is a highly effective crime fighting intelligence tool that did not exist before. And so, the report also found that as far as illicit activity goes from 2017 to 2020, they found that it was less than one percent.
However, if you read the bank fines report of 2020, it shows that banking institutions from 20 different countries, they had to pay somewhere to the tune of $14 billion dollars for breaching various money laundering protocols. So, for instance, Goldman Sachs, they were fined $6.2 billion. Wells Fargo, they were fined about $3 billion. JPMorgan was fined a little over a billion dollars for breaching various money laundering protocols. So, if you want to fight the war on illicit finance, start with cash and those who control it.
Well, you've definitely brought a lot of knowledge here and piqued my curiosity more ways than one. So, for more educational content on this topic, with blockchain cryptocurrency, where would you suggest?
Since Bitcoin is top of mind for a lot of people, there's a website called CaseBitcoin.com and I recommend just get educated about what Bitcoin is and isn't. You know, it's not the holy grail that's going to solve all your money problems. We have yet to see the full capacity of what blockchains and cryptocurrency can do. So, the best thing to do is just get educated. Don't make don't take financial advice from Twitter, do your research, ask questions and be open to the possibilities of what you'll discover.
Well, speaking of being educated for our next topic in our next conversation, what are we talking about in our next episode?
So, in 1994, when the Internet was in its embryonic stages, Bill Gates presented an idea. He said banking is necessary. Banks are not. And so, in our next conversation, I'll show you how true this quote is and how Web 3.0 is disrupting how you and I get access to money generating opportunities. So, join us at Alt Monie.