Markets never lie and all deep-tech startups will have to adjust course or risk getting sidelined.
We live in a a world driven by tech where our reality is shaped by our networks. Be it money, transportation, people, knowledge or shared views about things. Technology is exponentially integrating every human and every aspect of what we do. I like how Naval Ravikant puts it — money (along with religion, corporations, roads and electricity) are all different kinds of networks, in the sense that the more people join one, the more valuable it becomes to all participants. Further crowdsourcing of content makes such networks irreplaceable like ebay, facebook, wechat, whatsapp, google maps etc..
Deep tech companies create everlasting monopolies
Humanity risks loosing democracy to companies that will have global monopolies due to network effects and content accumulation through crowd sourcing. These monopolies become impossible to unearth and easy to extend into other areas. For example Google uses its homepage to extend its search to other portals like Gmail, News, Maps etc causing a run away flywheel effect. These monopolies could not have been possible before the spread of Internet.
The current company structures based on profit maximisation are incompatible with the long term interests of humanity. The current patent system envisions a monopoly period of 20 years as a sufficient reward for an innovation. But due to the nature of such network effects the expiry is rendered useless.
Faircoins level the unfair advantage in favour of new startups and general population
Crypto currencies offer a new structural paradigm to own and create deep tech products with network effects. When deep-tech or AI reduces jobs it will also increase universal rewards for contribution. Attracting early adopters and kickstarting a network is the most challenging phase that tokens can ease off.
Faircoins are cryptocurrencies that have very large distribution through rewards or air drops. It helps decentralize the currency and control. Typically coins would get continuously reused via collected gas for the network to expand to newer audiences. The value of coin would keep increasing as the network expands. A sufficiently high market cap and large distribution pool ensures equal distribution of wealth and reduces the risk of hostile takeover.
Stronger feedback loops
A deeper level of community engagement during product design and especially with committed users can multiply the chances of success manyfold. The amount of connections, feedback and resources have been unparalleled compared to traditional models. Crypto currency crowd is usually more tech savy and part of the early adopter segment. They are open to trying new products and grasp new concepts quickly.
Traditional model of funding is broken
Founders usually spend a disproportionate amount of time in fund raising. A usual startup is always in a fund raising mode. The funding is primarily available post product-market-fit. Meaning that the funds for creating new deep tech products is just not available in most countries. R&D is mostly done by government labs or large cooperations under huge red tape and in the end resulting in even larger monopolies.
Future can be 10,000 crypto currencies worth $10 trillion
The internet and smartphone revolution has just started. We may well have a network of data running behind each industry. Collecting data and generating AI driven feedback, managing work distribution and trust. When we say “Software is eating the world” and “the largest companies in some of the industries do not own any physical assets”. This phenomena of deep-tech eating the world industry by industry and product by product using network effects has perhaps found its best friend. Restricting such large-scale disruption and wealth creation to sophisticated investors may cause more harm to the worlds wealth distribution. Think of it as a new parallel structure of global innovation that may eventually dwarf the stock markets.
It’s causing a cultural transformation
Solving world problems — more and more startups are now focusing on solving big problems without worrying about funding.
Borderless and inclusive — the network created is borderless and inclusive in terms of utility, ownership and control vs traditional companies mostly centred in USA and more specifically silicon valley.
Transparent — the governance, architecture, policies, usage, security, communication and even ownership are more or less transparent vs the culture of secrecy in most R&D labs.
Proportionate reward — There are many contributors and advisors that eventually get rewarded as apposed to majority stock ending up in hands of VCs or angels with multiple rounds. Many technologies even get absorbed and even shut down when they disrupt a revenue source of a larger company.
Tamper proof — the value creation and assessment is broadly community driven using DAO principles. If well structured the project becomes founder proof and creates an ecosystem having a snowball effect on value creation.
Contribution — It is unlikely a wikipedia could have gotten created if it was run by a cooperation that intended to make money off it. The decentralisation of the project helps create collective acceptance.
Every crypto project creates wealth from thin air as it exchanges a small proportion of its market cap for raising capital. This increases the overall crypto economy with its total market cap. With every project having 2 to 5 years of roll out for its crypto rewards based on vesting schedules or crowd mining, it creates massive incentives to attract new talent and resources to solve some of the world’s largest problems.
Every technology and every revolution comes with its own benefits and challenges. Be it Internet, Social media, AI or now Crypto Currencies. The role of regulation is to encourage the value creation process while stamping out the undesirable aspects. The whole conundrum about utility vs security tokens is actually shaping the openness of the projects as they try themselves to look, feel and prove the community and utility aspect of the tokens.
It’s now almost certain that all tokens and exchanges will be subjected to high standards of KYC & AML and thus cleaning up the stigma around it. Subjecting them to securities law will spoil the true spirit behind the tokens. The standard consumer protection and anti-fraud rules are enough to deal with anomalies. In fact having a realtime transparent ledger and open communication already subjects the projects to a great deal of accountability that is much more effective than what would otherwise be required by securities law.
Transitioning from capitalism to information economy.
Instead of profit maximisation the future networks will be valued by its ability to decentralise information and exchange. The more valuable the information is, the more gas the network is able to charge and redistribute. Crypto currencies will create the central nervous system that will generate, manage and distribute anything that has value for the masses.