We have a lot to learn, unlearn, and relearn.

Futurist Alvin Toffler once said, “The illiterate of the future are not those who can’t read or write but those who cannot learn, unlearn, and relearn.”

Now is one of those times when a new paradigm arises, and we can rethink how we want to live in relation to institutions, companies, money, and more. The future is here, and it is lumpy and not evenly distributed.

Take some time and focused effort to understand cryptocurrencies, blockchain, and smart contracts. The evolving crypto ecosystem is like personal computers in the ’80s, the internet and web in the 90s, and mobile in the 2000s.

Entrepreneurs, economists, software engineers are diving in and creating apps that remove go-betweens, intermediaries, and friction. This disintermediation is the promise of blockchain and smart contracts. It is transforming industries like banking, insurance, gaming, corporations, online advertising, and the web.

Most times, the entrepreneurial spark comes from envisioning how the world could work versus how it does now. In other words, the opportunity to create something better comes from observing something broken or that doesn’t work the way you believe it should.

The initial innovations and developments are centered around available activities ripe for disruption because they command outsize profits and operate inefficiently. For example, we can’t make bank transfers on weekends, and they take several business days. Stock Markets only operate during weekday working hours. Visa and MasterCard make 60% profit margins. The list of inefficiencies, inconveniences, and outsize rents goes on and on.

Creating improvements in existing systems is called skeuomorphic applications. Steve Jobs coined the word skeuomorphic to explain the concept of taking a real-world application and creating a digital version that incrementally improves on the old way of doing things. Skeuomorphism makes objects familiar to users by using concepts they recognize.

The next step will be creating native applications. Native applications are only possible in the new environment. This step will be where entrepreneurs will release blockchain’s immense potential value, and waves of adoption will occur.

We are still making skeuomorphic applications, but apps native to blockchain are evolving.

The ecosystem contains:

Layer2 Dapps

• Metaverse: Facebook Meta, Microsoft, Google, Decentraland (MANA) and the Sandbox (SAND)
• Browsers: Brave Browser (BAT)
• DeFi. Lending: Aave, Compound,
• GameFi. Decentraland and the Sandbox
• Distributed Autonomous Organizations DAOs
• Non Fungible Tokens NFTs
• Web3

Layer 1 Blockchains Trilema Scale, Decentralized, Security. Also, cost and speed constraints.

• Bitcoin
• Ethereum and Ethereum 2.0
• Avalanche
• Solana

Layer 0 Interoperability:

• Bridges
• Polkadot (DOT)

Tokens

On and off-chain integration. Oracles. Chainlink

It started with Bitcoin.

There is still criticism that Bitcoin will go to zero because it has no inherent value. For example, it doesn’t have gold or diamonds backing it up, and no governments say they will exchange crypto for their fiat currencies.

But gold and diamonds are not inherently valuable. We value them because they are rare, and we find them attractive. However, you can’t eat them, wear them, or build with them.

The original cryptocurrency bitcoin is now considered digital gold. Bitcoin is a store of value with some beneficial characteristics because it is uncorrelated with the fiat currency economies.

Ethereum was the first successful attempt at expanding the functionality provided by a Turing complete blockchain to provide usefulness across multiple domains. However, its success uncovered some rate-limiting issues as it has scaled up in popularity and use cases.

The Ethereum blockchain was, until recently, the unquestioned hub of smart-contract-based activity. It was developed in 2015 as a more general-purpose bitcoin alternative.

The database connected with Bitcoin keeps the information about transactions in the associated cryptocurrency, proving who owns what at any given time.

More information, such as computer code, is stored in the Ethereum blockchain. An application that developers can program in code is guaranteed to work as intended, eliminating the need for a middleman. However, much as Ethereum improved bitcoin, it is currently being supplanted by newer, more advanced technologies. The battle recalls the battle between computer operating systems.

Now the second generation of token-driven blockchain companies aims to solve these issues creatively and focus on particular use cases to be efficient and compelling. These address problems in the original blockchains and address issues in the traditional financial ecosystem.

A leading indicator value of a cryptocurrency is how many developers are actively involved in developing on its chain. GitHub repositories and activity is a way to gauge this activity as a proxy of interest and value in the token.

This approach brings real underlying value to these tokens and projects.

I see the promise and practical benefits, and I want to share what I am discovering. I am just a few steps ahead of what I’m reporting, and I’m quickly learning more every day. Like the adage about the person with only a fourth-grade education when asked, “what are you going to do with a fourth-grade education?” replied, “teach third grade.”

Here are some of the more exciting tokens and blockchain projects filling these needs and creating new opportunities as the crypto ecosystem evolves, develops, and fills out. Check them out and DYOR: Do Your Own Research.

• Avalanche AAVE
• Chainlink. LINK
• Polkadot. DOT
• Solana. SOL
• Polygon. MATIC
• Brave Browser. BAT
• Uniswap

Blockchains are secured by cryptography. Bitcoin and Ethereum use Proof of Work as their consensus mechanism to solve cryptographic math problems in a decentralized way. Decentralization means lots of nodes (computers) providing cryptographic computation services in exchange for the possibility of getting paid. Only the winner, the first to correctly solve the math problem, gets paid with proof of work. This winner take all scenario is inefficient and unfair and is a function of the price remaining high enough to attract and incentivize miners.

But this model of decentralized and distributed computational resources not controlled by a central authority or central computer or centralized cloud points to a more general benefit that didn’t exist before the internet and now blockchain and tokens. Blockchains can act like a big worldwide computer (Turing complete) incentivized to do work and allocate resources through tokens. Turing completeness through smart contracts was the significant innovation of Ethereum.

Blockchains invert the traditional relationship between hardware and software.

The significant issues to keep in mind about how different blockchains and tokens fit into the ecosystem surround these concepts:

• Decentralization
• Scale. Size and speed
• Security
• Consensus mechanism
• Transparency

DAOs with AI guidance might overcome partisanship and other organizational and governmental frictions and disfunction.

Trading coins and tokens aren’t the important part. Look for projects that add real value and solve real problems in innovative ways. Look for utility and value-added by projects powered by tokens.

Tokens that follow Ethereum’s idea of a Turing complete blockchain capable of developing and supporting smart contracts are where the use cases are. Rather than use blockchain tech to power the currency, use the currency to power the blockchain.

It’s not about just cryptocurrencies but projects built with cryptos. That’s where the best returns are surfaced. They also make more sense as investments and aren’t simply speculative objects.

Identify and research the infrastructure companies and all the other plumbing and picks and shovels of the industry.

Bitcoin is different. It is digital property. Bitcoin is protection from the struggle between deflationary and inflationary forces in the world’s economies.

Software is eating the world. Technology makes things cheaper, more powerful, and dematerializes objects like cameras, film, mail, fax machines, recording studios, and tons more. This deflationary process undermines central banks and their managed inflation target of 2% to spur growth in the economy.

Technology makes things cheaper. Deflationary. Our current system is based on prices going up for growth — inflationary based on credit. The two approaches are opposed and are in a titanic struggle.

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