The Easiest Analogy of Capitalism and Crypto-Globalism

Article: 5

Date Written: May 26, 2022

Last Edited: May 27, 2022

Crypto-Globalism: The economic belief that businesses can manage currency more efficiently than central governments because they must compete with the performance of their competitors’ tokens in order to survive. Followers of this belief are known as “Crypto-Globalists” or “Globalists”.

Crypto-Globalism: Global, cryptocurrency-integrated Mercantilism with capitalistic tendencies, highlighted by a mass volume and size of competitive micro-economies.

For this article, we will look through the lenses of two hypothetical real estate developers: one a Capitalist, the other a Globalist.

Aerial image of skyscrapers

The Capitalist viewpoint of real estate development is that if they could create the tallest and shiniest skyscraper in the city, they would have the ability to charge the most for the top floor. While building the skyscraper, the Capitalist would simultaneously create housing for everyone underneath the top floor, all the way down to the 1st floor (ground floor, for non-Americans).

So the Capitalist starts to build the skyscraper. First the foundation, then basement, then 1st floor, then 2nd and so on.

As the Capitalist builds each level, it places people who previously didn’t have housing into the skyscraper by price. The closer the floor is to the ground, the worse the view is, hence the price is lower than floors higher up.

The Capitalist continues to build, continues to find new tenants, continues to increase prices and the money (specifically profits) continue rolling in.

But eventually in the development of the skyscraper, the Capitalist realizes that they can no longer keep building the skyscraper in a completely linear fashion, because it gets harder and more expensive to build upwards after a certain altitude. Limited by natural constraints on how high a skyscraper can be built, but still wanting to maintain profit margins per floor built, prices of subsequent floors increase relative to the ones before.

New tenants are forced to pay more, but are willing to for the prestige. This continues on until the Capitalist reaches the final floor, finds a tenant, and completes the construction of the tallest and shiniest skyscraper in town. Let’s review how they did.

According to the Capitalist, they achieved the most value possible from real estate development because they created the tallest building, the most valuable building (for argument’s sake), and made profits all along the way. All is well, right?

Well, the reality of the skyscraper is that

1. Although they did create the tallest building in the city, only the tenants at the top had access to the “best” view.
2. As the skyscraper got built, the time it took for the elevators to reach the top from the 1st floor increasingly took longer and longer.
3. As the skyscraper got built, construction growth rates eventually slowed down to a halt due to the natural constraints of building upwards.
4. As the skyscraper got built, the increase in price outweighed the marginal increase of the view. But because there were people still interested in the floor at the increased price, the Capitalist continued to build upwards and charge more.
5. Tenants on the 1st floor get to say they live in the tallest and shiniest skyscraper in the city, but their reality reflects nothing of the sort.

Image of many similar suburban homes

The Globalist viewpoint of real estate development is much different from the Capitalist’s.

The Globalist believes that the way to maximize company value is to build as many homes across as much land as possible. The rationale behind this thinking is that because land is a finite resource, it is more important to acquire land than it actually is to build a home or structure on top of it. The land can always be maintained, sold, built upon etc., to increase value but the true intrinsic value will remain as long as there’s interest in living in the city.

The Globalist then goes ahead and purchases as much land as they can while simultaneously building residential properties of all sorts on that land.

The Globalist eventually runs out of funds, but finds tenants for all the properties. Now here is where the Globalist beats the Capitalist.

Instead of just charging and collecting rent, the Crypto-Globalist decided to launch their own token (HOUSE) with 100K tokens as max supply. As each of the tenants within the network pays rent, the Globalist uses that fiat to purchase HOUSE from a secondary market (let’s say Pancakeswap). The Globalist then decides to burn 50% of all HOUSE tokens that got purchased, every time rent is received in perpetuity. As a reward for on-time rent payments, the Globalist gives tenants a 10% refund of their rents back in HOUSE tokens.

Let’s see what the Globalist created:

1. The Globalist now created the opportunity for renters to pay off future rent payments, purely from appreciation and without charging more rent. All else being equal, if tenants receive a 10% refund on timely rents while the Globalist is the only person purchasing HOUSE token from Pancakeswap, then the price of HOUSE should increase. As the price of HOUSE increases due to the rest of the tenants paying their rents, by the time the initial tenant has to pay their 2nd rent, the second rent payment could be partially subsidized by the appreciation.
2. In a rent-to-own scheme, the Globalist could empower the renters to hold on to the coin for long enough so when the token value eventually matches the value of the home + profit margin, the renter can just send the Globalist the HOUSE tokens and gain ownership of the property, just by paying their rent on time.
3. As the Globalist flips renters into home owners, they now have a reserve of appreciating HOUSE tokens that they can use to buy even more land than they could the first time around.
4. The Globalist provides the previous renters, now homeowners, with an asset which they can keep for the rest of their lives and enjoy the appreciation from the token.
5. The Globalist still would own the underlying land of all the properties if specified in the rent-to-own agreement.

As you can see, two very different approaches to business with two very different outcomes between all stakeholders.

In the Capitalist scenario, the only true beneficiaries of the skyscraper were the Capitalist and the tenants on the top floor. While yes, everyone else got housing too, not everyone got to enjoy being in the “tallest and shiniest” skyscraper.

In the Globalist scenario, not only did the real estate developer create profits and appreciation for themselves, but they created a far more ideal scenario for all of their renters and there isn’t a distinction between tenants. Yes, some houses might be larger than others or closer to amenities than others, but after the Globalist left, their financial lives all significantly improved solely due to the integration and equitable distribution of a deflationary, appreciating cryptocurrency.

The goal at Five Points (FIPO), a real estate rental business in Lansing, Michigan, is to achieve the scenario of the Crypto-Globalist and place power in the hands of renters amidst the looming housing and rental crisis.

We believe that if we can not only provide housing, but also financially empower our rental tenants to become homeowners through our refund program and our token’s appreciation, we believe that we’d create a net positive that has yet to be seen in the real estate market while being able to rinse and repeat at increasingly larger scales due to price action.

At the time of writing, FIPO is currently trading at $1.4386 on BSC @ contract address 0x489c5bfcdf3cdc5ae7890cdacf7ae08040e45ec0

Disclaimer: Any and all information found from official Five Points sources are meant solely for informational purposes only. We will not be held responsible for any gains or losses made from FIPO speculation. Because the risk of loss is high within cryptocurrency, it is the sole obligation of the reader alone to consult with a financial advisor.