Big Tech Jumps the Shark amid the Rise of Blockchain
Last week when I read the news about Elon Musk buying Twitter, all I could think of was an image of Fonzie from the TV show “Happy Days” jumping over a shark tank on water skis. Just in case you don’t know the entomology of “Jumping the Shark,” here you go: https://en.wikipedia.org/wiki/Jumping_the_shark.
This was the clear signal of the end of the current tech boom that I’ve been expecting, although I didn’t think it would be so profound. This signal was promptly backed up a few days later by the Nasdaq dropping 4% in one day. As of this posting, the Nasdaq is down 4.7% today. Though it’s likely we’ll still have a few more months of turbulence in the market, this clearly marks the end of the era that started in 2009–2010.
Centralized big tech and even Twitter, no matter what Elon does with it now, must shift to a value model, and the next growth opportunity–actually the only one in my opinion–will be decentralized blockchain where consumers’ identity is tied to NFTs, and DAO’s (Decentralized Autonomous Organizations). And of course, my favorite final settlement layer, bitcoin will rise to take its rightful place as the next growth engine of the world economy, opening up trade and communications on a local and global level surpassing this last tech cycle.
Watch legendary investor Paul Tudor Jones talk about it on CNBC. I’m actually amazed how much Mr. Jones understands blockchain technology and the crypto economy. He makes a strong case that the current graduates with computer science, finance, and liberal arts degrees are looking to get into crypto. (Twenty years ago they were moving to San Francisco and Silicon Valley in droves to get into tech.) He also understands on a deep level how the blockchain relates to identity and commerce, which is anti-centralization and cloud computing tech that has been pushed on us for the last 10 years.
This is further supported by last quarter’s venture capital flow of $10 billion going to crypto and blockchain startups, with 41% of the total invested in Web3/NFT/DAO/Metaverse/Gaming.
Over the weekend, two more proof points of this massive shift happened. One was popular cryptocurrency for NFT, and Defi Solana was attacked with 4 million transactions per second forcing a blockchain to go down for 7 hours “knocking validators out of consensus and grinding block production to a halt” This is why in my last blog post I suggested the 10–10–10 strategy with majority of holdings being in bitcoin as the cryptocurrency of choice. At first glance this could obviously be interpreted as a net negative, more likely a short term speed bump. But I’m sure this was a learning moment that will make Solana even better down the road. (Who doesn’t remember when Twitter went down so often in the early days that they had to institute the Twitter Fail Whale?)
An even more positive signal of the crypto shift over the weekend was the Bored Apes Yacht Club’s raising $320 million in what was considered the “largest NFT mint in history.” The impact clogged up the Ethereum blockchain, sending gas prices (the cost of transactions) through the roof. Demand was so high that many paid more in transaction fees than the $5,800 purchase price for the NFT. That kind of demand is more than a flash in the pan. It’s a clear indication of a coming change that’s catching big tech flat footed. The only company that is remotely positioned to take advantage of this shift is Microsoft’s gaming division with the rumored NFT partnership with GameStop. Full disclosure: I own Microsoft stock.
All this being said, we are still very much in the early days of the shift from big tech to the blockchain crypto economy. I agree with my favorite bitcoin evangelist Michael Saylor when he recently said we have about 36 months of software development to go before it really goes mainstream.
If you are in my age group (late Gen Xer), the best BTC investment strategy is 10–10–10: 10% of your net worth is held in bitcoin; 10% of that holding is used for speculation on other cryptocurrencies, trading, or buying NFTs as an investment. And finally, 10% of your speculation crypto is your “mad money” to participate in the crypto economy by spending crypto for goods and services to drive the crypto economy now.
Taking an active stake today in the crypto economy lays the basis to be well positioned to benefit from the shift away from big tech, and reap the rewards of BTC and financial security.
All the best,
Jim
Join Coinmonks Telegram Channel and Youtube Channel learn about crypto trading and investing
