Connecting the crypto dots.

Steve Jobs once famously talked about “Connecting the dots”. We need dots to make the connections. Dots can be anything from knowledge, wisdom, Secrets, Experience, Gut feeling, skills, talents, capital etc. The goal of this article is to explain a few dots, mostly through human evolution and try to connect them with the crypto point of view. Contextual meaning of crypto in this article is any distributed ledger technology.

Dot 1: Humans biggest breakthrough over time

Fire: Discovery of fire enabled humans to hunt the animals in bulk and store the food for future use. This gave humans a lot of free time to think, communicate and coordinate. Language: Language enabled humans to communicate and share ideas among the group in a defined way. Passing the experience and knowledge to the next generation. Language enabled humans to compound his knowledge at a breathtaking pace. Wheel: Along with wheel, other transports systems including the domestication of horse enabled humans to move beyond his tribe. Humans started to look opportunity outside his tribe.Money: Money helped us to trade time with others, it helped us to leverage other people time and effort. Chasing the money brings a lot more discoveries and inventions. More lands occupied for money, more people getting the education in hope of earning making money. The by-product was more widespread knowledge, skills, and coordination. Printing Press: Printing press and other medias enabled us mass education, within a few hundred years, humans gathered more knowledge than previous millions of year. Electricity: Electricity and other energy source enabled us to move, build, manufacture and connect quicker than ever. Internet: If someone woke up from the coma after 20 years, sure he would think they woke up in an alien land. We have seen more changes in the last 20 years than entire history. The degree of separation reduced from 6 in 1990 to 3.5 in 2016, thanks to the internet, We might end up connecting everyone with everyone. Crypto: We have seen each breakthrough helped another breakthrough and each latest breakthrough was multiple times bigger than previous breakthroughs. We will see how crypto going to disrupt everything and make the internet revolution will look tiny. AND REMEMBER, EACH BREAKTHROUGH LEFT THE UNADOPTED BEYOND.

Dot 2: Evolution of trust.

Humans never trusted another human throughout evolution. We always depended on third-party trust provider to settle the disputes and to trust others. As networked spices, trust is the fundamental force for networking, coordination, and relationship. A simple example is, in a wealthy society, people have more trust among themselves while poor society struggle with the trust issues.

We used to depend on the priests, gods, church, kings, holy books, Gang leaders etc to keep the trust. If two people have a dispute, these trust-providers will take some money and settle the dispute. Over time, these trust providers become costly, slow, biased and corrupt. They become rulers of masses. Each stage of our evolution created a new trust provider. Recently democratically elected governments, bureaucrats, judges, courts, polices, banks, bankers, militaries etc are modern trust-providers and rulers.

Lately, the Internet created 1000s of new trust providers like Amazon, Uber, Airbnb, Facebook, Paypal gave trust to users. They sit between people who never trusted each other. Uber comes in when driver and passenger cannot trust each other. Amazon comes in when seller and buyer trust each other. They become internet powerhouses. Like ancient age trust providers, these internet trust providers started to abuse the users. Users don’t have options either.

Bitcoin is the first system, which removed the need of trust between parties. Crypto is a major breakthrough in human history, that two or more anonymous individuals can exchange the value without any need of trust providers. We call it “Trustless By design”. And the first “” system. What if every human trusts each other instantly and anonymously and form a huge network. Will leave it to your imagination.

Bonus: are 36 tweets by @naval about Blockchain. This article largely inspired from his tweets.

Dot 3: Evolution of Power distribution

The social structure of homo sapiens (and most of the animals) is hierarchical and top post is mostly occupied by an alpha male. The power structure evolved along with the technology advancements. Over time the kings started to delegate some of his power to his family members and friends. Over the time when kingdom become bigger, he delegates more power to more people, He started to appoint ministers, dukes, governors, army generals etc. Later these rulers added bureaucrats and gave them power.

Later democracy was accepted all over the world. People directly elect their ruler for a specific duration. Though people elect them, still most of the power was with rulers. Over time, the government become structural and shared more powers to private sectors. Today most of the countries are virtually run by private sectors, like distributing electricity, internet, water, manufacturing, health, education etc.

If we look at the historical pattern of power distribution, the people started to grab the power from their rulers and rulers happily give up some of their power to stay in power. Clearly, the next evolution of power distribution will be, more people in the bottom of the pyramid wants to grab some power from rulers. Crypto will enable people to create their own network without the need for rulers. From print own money to producing and distributing power to anything. It’s because of empowering private companies, humans made so much breakthrough in the last 50 years. What will happen if we empower billions of people?. Will leave it your imagination.

Dot 4: How technology replaces people over time.

We keep replacing humans / domestic animals with machines during our evolution. Like oxen, cows with agricultural tools. Horses with cars. Later we started to replace the humans from the bottom of the social pyramid. Now, most of the manufacturing units and agricultural fields are filled with robots. If we observe the pattern, we mostly started to replace people from the bottom-up.

Google driverless car is one of the major tech breakthrough in our lifetime, Kind of science fiction reality, but still, it going to replace the drivers, who are middle-bottom of the social pyramid. If we assume drivers are 1% of society, and if their average salary is $400 per month (in India). If we replace every driver with google car, if google charge 10% of what drivers charge, then the market of google car will be 80Mn drivers X $400 = $32bn per month.

I know the math is stupid, but the point here is, what if we have a technology, which might replace the humans and institutes in the top of the social pyramid. Entities like financial institutes, politicians, bureaucrats, rent-seeking middlemen, lawyers, trust providing agencies are in danger of replaced by Crypto. The market for automating the government, politicians, financial institutes, rent-seeking middlemen and 10,000s of corporates must be multi-trillion dollars, Truth is, we have enough infra, talents, money and proven tech to automate/disrupt/ replace them in form of crypto. I am writing a separate detail post on this, will publish in future about it. It’s coming faster than we think.

Dot 5: Belief systems and an army of believers

Time and again the human history changed by a small army of believers. Belief systems like Religion, Kingdom, Nation, Brand, Money, Capitalism are still thriving for years from commencement because a group of people believed strongly and passed to the next generation. They sacrifice everything to guard their belief. Christians believed in Jesus, converted one-third of the population. Nothing can stop something that few believed and committed to it.

Bitcoin is the strongest belief system we had seen in our lifetime. Especially in the post-internet hyper-connected era, Crypto is the biggest utopian idea ever and the first belief system backed by science and math. A few years ago, there was some group of people believed in it. Now we have belief, money, energy, and talent. We will see 1000s of believers will start work full time on it in the next 2 years. Don’t mess with this new borderless, permissionless belief system who want to disrupt everything.

Dot 6: What we traded over time

Another evolution perspective is, as networked species, how and what we traded over time. Earlier, we had the barter system, we just exchanged the available goods with nearby humans. Later with the invention of money, we start to trade many things, including time, trust, land, services, goods and etc. We started to leverage other peoples money, time and effort. Currently, we are trading the stocks, shares, bonds, currencies, commodities etc. Each improvement in trade bought more breakthroughs in human evolution.

With the advent of crypto, We going to trade many things that we can’t imagine now. All without any political, geographical, financial barrier. An example, people will start to produce electricity, distribute and consume in peer to peer network. We might trade personal brands, honesty, attention, attraction, and reputations. We might trade the health index of the community. We might start trade anything that has value. There will be millions of tokens available for trading, Anyone can buy and sell anything instantly and anonymously from anywhere for 24x7. Already there are some projects to trade data, time, influencing score etc. The global GDP will be multiple times bigger than current GDP when we start trading millions of tokens.

Dot 7: How different people make money, overview

1. Most people earn money by doing day jobs. You renting your time and earn rent.
2. Entrepreneurs own business(es), use the above people and leverage their time and effort. Here both risk and return increase. Here people work for you.
3. Investors invest in Entrepreneurs / Businesses, here again, both risk and return increases. Here more people work for you.
4. Investing in stocks, Here 1000s of big Businesses work for you. You can grow (and loss) your money every minute. Here again, risk and reward will be even higher.
5. Investing in Forex, commodities, CFDs, Futures, and Bonds. Here entire country’s population works for you. More make sure you take responsibility for the huge population, Here both the risk and reward is very high.

Above points provides the reason that very few people controls the large portion of wealth and the large portion of the population owns the tiny portion of wealth.

With crypto, we basically invest in a borderless protocol. In other words, Crypto investors might sit on the top of above 5 people. You will literally make money by trading the protocols that power the new world.

Bonus: This portion is taking from here

Connections: Crypto is a single deep field which packed technological, science, philosophy, politics, economics and religion into a single piece. In the early 1990s, most people imagined that internet going to replace mail service. That’s how their imagination limited to. But today the top 5 companies are internet companies. The same is to happen with Crypto. We are not sure what it will bring. But people who grow with crypto will build the whole new world. And i will leave you to connect the crypto dots.

P.S: If you are into crypto, Checkout 2ools, my upcoming product in Producthunt: