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How Crypto has changed the global economy



how crypto changed economy

VCs are banking billions of dollars on the blockchain technology popularised by Bitcoin to establish an alternative universe of finance, trade, communications, and entertainment on the internet that could drastically revolutionize large portions of the global economy.

According to Pitchbook, a market data provider, venture investors pumped a record $21.4 billion into cryptocurrency and blockchain-related startups in the first three quarters of 2021, in 1,196 deals. In comparison to the previous year, this is more than five times the amount of money.

From Gaming to Social Networks, VCs have put a lot of money where their mouth is. Axie Infinity, a Pokemon-inspired game with collectible characters that breed monster offspring and battle online, relies on an established business model called “play-to-earn,” meaning potentially real profits. This game is decentralized, meaning players access it on the Ethereum blockchain and not through an app acquired via Google or Apple, arguably curbing the dominant role those companies play and the fees they extract.

Crypto finance can sound like science fiction. But this is our reality. Right now, all over the internet, on decentralized finance programs like Uniswap, people are trading, borrowing and lending digital assets on platforms where computer code runs the show. There is now about $235 billion invested in DeFi, by one industry account.

Helium is another network backed by A16Z. This “decentralized wireless infrastructure” firm aspires to compete with established brands like Verizon and AT&T in the future. In exchange for helping to fuel this group 5G cellular infrastructure, community members construct a hotspot in their neighborhood using a unique gadget and earn data and Helium’s crypto tokens.

Your popularity value on social networks can now be calculated when you “tokenize” yourself and create an economy fueled by your own crypto. On BitClout, every user gets a coin, and its value suggests what the internet thinks of them. “There is no company behind it; it’s just coins and code,” the developers claim. An account with the name Elon Musk is the top-valued token at about $115 dollars. But the project’s launch was controversial, with crypto insiders calling out the “dystopian social network” for relying on data collected by giants like Twitter to calculate reputation, among other critiques. DeSo, short for Decentralized Social, is a blockchain network for developers to build decentralized social media programs.

How quickly – or slowly – we are able to move to adapt to this new technology-driven way of trading, and how smoothly we make the transition will decide whether cryptocurrency could benefit the global economy or crash it. But it will surely change the existing system as we know it.