Well, it’s been a while, but I’m glad to take pen to paper with another Crypto: Decrypted®. With markets shifting, government governmenting (sort of), and crypto recovering there has been a lot going on, however the biggest reason for my short hiatus was the release of our new book Crypto Decrypted: Understanding Breakthroughs, Debunking Myths, and Building Foundations for Digital Asset Investing, which was published on May 23. With endorsements from Skybridge Capital Founder and CEO Anthony Scaramucci, former CFTC Chair Chris Giancarlo, Delphi Digital’s Tom Shaughnessey and many other luminaries, we’re excited about the enthusiastic reception it has received so far and it has already received bestseller status at Barnes & Noble and Amazon!
This was important to us as a follow up from Jake’s first book, Crypto Asset Investing in the Age of Autonomy. If you’ve followed this blog, you know that the Age of Autonomy® is the intersection of IoT, AI, robotics and blockchain. It’s our thesis and worldview of how the next long-wave economic cycle, this next Age, is going to evolve over the coming decades.
However, we’ve realized that there were basics still being missed; many people are still solely focused on crypto as financial capital and simply another ticker to trade like a stock on Robinhood. Given that our whole world has been consumed with Crypto Decrypted for the past few months, I thought it would be important to tease one of the core concepts and take a bit more of a macro view for this update.
You see, most books out there are laser focused on how to make money using crypto. Because of this, we’ve lost sight of the fact that crypto is simply a liquid asset, a coin or token, related to a blockchain, and the blockchain breakthrough is the key factor here, yet one that few discuss. We want people to understand why this breakthrough is so important, because it is this why that sheds light on everything and why we care. Let me explain:
Not Byzantine At All
So, to the point, the problem that we’re not talking about enough that blockchain technology solved is called the Byzantine Generals Problem, a name that on its own strikes fear into the hearts of all who hear it. Look, even the name “Byzantine Generals Problem” is complicated. It includes the word Byzantine, which we have come to know loosely means complicated to the point of not being understandable. But it’s pretty simple actually.
The problem, which is one of the top 10 computer science problems of all time, goes something like this: There are 10 generals who intend to attack a city. If they do it together, they win. If they don’t, they lose. The catch is that no one is in charge. No one person or entity can call the shots, so the generals have to work together as peers without central command. How do they do it? Well, that’s the whole point of blockchain. Up until this breakthrough, in the digital world, it was not possible. Every time we wanted to do something in the digital world, we needed to get our actions either dictated by one central party or, at the very least, approved. Think of sending a Zelle or Venmo payment – Venmo says if you can or cannot; it’s just not a transaction between two parties, there is a third party. Solving this problem allows peers to work together in the digital world without an overlord or counterparty, be it a bank, a company or even a video game.
So, simplified, blockchain and allows peers to interact with peers in the digital world. We care about this because this is the way we work in the physical world. If I have a $20, and you’re standing next to me, I can hand you the $20. It was mine. Now it’s yours. Voila! I didn’t need to ask the bank, a bystander, a business, my mom, your spouse or, well, anyone. Blockchain technology gives us provable ownership of digital goods, just like if you have cash in your mattress, you own it. You control it. It also gives us peer to peer transference of digital goods (just like handing someone a $20 bill.)
That’s it. That’s why we care. It’s actually very simple, and that’s the whole hubbub. It’s not that crypto assets are magic money that will infinitely go up in value. Sure, Bitcoin is a money use case of blockchain (and frankly it’s the only money use case we care about) but just because a bitcoin is money does not mean that the whole technology is based around money. Other crypto assets do different things and can represent digital goods or data, provide access to technology or even grant voting rights. I’ve talked about this in various forms over the course of the past few years in this blog, and we go into detail on this in the book so I’ll not expound on that here, but the point is we now have digital things that can be unique, possessed, and shared, just like in the real world. That’s why we care, and why Jake and I are on a mission to help the world understand fundamentally the importance of this – because like it or not it is here to stay – and this new way of relating to digital assets is going to have a bigger impact on our world than the Internet did.
So, back to our launch. Thank you to all of you who have already picked up your copy. If you don’t have a copy yet you can you can find more information about the book here or, of course just go to Amazon, Barnes & Noble, or your favorite independent bookseller. Speaking of Barnes & Noble, we’ll be featured there at the 5th Avenue location in Manhattan over the coming two weeks and there will even be some signed copies available this weekend so if you’re in the Big Apple stop on by. Thanks for humoring my rambling here, but I hope my passion has leaked through these words a little bit. Understanding this technology is important!
Meanwhile, I had a stopover in Los Angeles earlier this month and had to pick up some groceries. A smaller Whole Foods Market was on our route, so we stopped in to do just that. My mind was blown. What we had, at this location in the valley, was a fully autonomous shopping experience like I had never seen before, and it made it clear that the Age of Autonomy® is advancing at an accelerated rate.
For those readers that are new, as a quick refresher, The Age of Autonomy® thesis is the core to our view of this technological revolutionary wave. It consists at the intersection of a cluster of four innovations, the Internet of Things (IoT), Artificial Intelligence (AI), robotics & blockchain. IoT (sensor data) is gathering data at a staggering rate. AI turns that data into something digestible, basically processing data to create usable knowledge. Robotics (machines) can turn knowledge into activity in the physical world. Blockchain as the fourth component, allows peer-to-peer economic activity without human intervention. As ChatGPT has shown the world, these technologies are advancing. Individually, they are formidable, but combined, they are revolutionary, and we’re seeing the first real implementations of them.
So, back to the grocery store. What if we had at Whole Foods, was an entirely autonomous grocery shopping experience. We scanned our Amazon accounts on the way in and shopped. No big deal you say, right? Wrong. When I say we shopped, we did as we normally did. We perused parsnips, selected celery and apples, debated which chips were least unhealthy, picked things up, put them back, and ultimately put our selections in our cart. When done we simply scanned our code and walked out. No checkout. No cashier. No scanning of items at the cash register. No exchange of money. To quote Keanu, “whoa.”
This Whole Foods market was able to combine IoT, AI and robotics to determine exactly what items were picked up, exactly what items were put into the cart, exactly what items were returned to the shelf and – here’s the kicker – associate it with each shopper using facial recognition technology. The complexity of this effort is staggering, and it was accomplished with way-too-many cameras in the ceiling which recorded all activity. So, sensors could identify when an object was taken off the shelf (IoT). Facial recognition technology could identify the shopper who took the product (AI). Cameras, weighted shelves and scanning mechanisms were the hardware that made this all come together (robotics), and it came together in a seamless shopping experience that was, frankly, eerily accurate. After leaving the store we got a bill and our default payment method, already on file at our Amazon account, was charged. Should that payment method be an Amazon card purchased with bitcoin, which is possible today, we’ve already got blockchain into the mix and can transact without a third party bank being involved. Right here, right now, today we have the four components at play here from the Age of Autonomy® thesis.
That last part might beg a question – “why do I care about that?” Well as the recent banking crisis has shown us, you may not always have access to your assets and, even if you do, you might not get approval to use them. However, if you control your assets and can transfer automatically to another party, you don’t have to rely on any third party to approve your charges or ask for permission to use the services. It’s kind of like that $20 bill example. It’s hard for us to imagine, but not too long ago we didn’t have credit cards. Since then we’ve kind of forgotten that everything we do goes through a gatekeeper. In the future we expect Amazon will natively accept crypto and will not require a gift card. It will be just like paying with cash. And, frankly, this is going to be critical as our digital and physical worlds continue to intersect.
Anyway, our minds were blown. Yes, we were being monitored the whole time (thieves and privacy pundits beware), but the elegance of the experience was something out of a science fiction movie.
Just to add on to this concept, we know that science fiction has always predicted future trends, one of them being self-driving cars. I specifically remember a movie from 20 years ago, Minority Report in which our hero, Tom Cruise was, in scenes, whisked around in a driverless Lexus. Well, that’s now here too.
In Austin, we now have a company Cruise which offers driverless Ubers. Yes, that’s right. You can call a car, the car will come pick you up and take you to your destination without a human driver. No, there’s not a humanoid robot sitting behind the wheel but there doesn’t have to be. IoT is gathering data, AI is processing that data to come up with conclusions about where to go, speed, traffic, obstacles, road rules, etc., and it’s all put into physical reality via robotics, or machines given activity via the knowledge gathered.
This is not the future, it’s now, the present. Whoa!
All of this is blurring the lines between fantasy and reality, and nothing will blur it more than the metaverse, which is quietly continuing to advance. Just as ChatGPT showed up and scared the dickens out of everyone, metaverse development is happening now and I predict it won’t be too long before one day we have the metaverse version of a ChatGPT moment. It’s not that it will happen overnight any more than ChatGPT was built in a night. It wasn’t. It took time, it just looks like it was an overnight event. Well, consider the same thing is happening right now with metaverse development.
Metaverse advancement is perhaps the ultimate implementation of the Age of Autonomy®, the creation of virtual worlds that replicate our physical one. Dubai and Japan are the frontrunners here, each vying to create an economic nexus that draws in commerce in an immersive, borderless way. Dubai boasted The Verse Estate Showroom, which opened in late March, providing an interactive nexus for business as well as an educational platform for “building a more connective and collaborative world.” Simultaneously Japan just created the Japan Metaverse Economic Zone, with some of Japan’s leading corporations Mizuho Financial Group, Mitsubishi and Sumitomo Mitsui coming together to create the foundation for a virtual world that – importantly – shares the cultural dynamics of Japan as a country and is committed to bringing privacy and data security to foster trust. This differentiates it from generic, data gathering centric centered universes such as those proffered by Zuckerberg’s Meta. Back to blockchain, in a virtual world provable ownership and exchange of digital goods are going to be critical for commerce, transactions and sovereignty, and will truly allow us to replicate our physical experience in a digital format.
What is this ultimately going to look like, well, we’ll have to wait and see as much of this is speculative. However, just as the concept of self-driving cars was early 20 years ago, or AI was seen as early in the pre-ChatGPT era, we’re in the midst of a new technological cycle. And it’s not going to go away.
(With that I’m going to pause this section here as we really need much more time and space to explore the Metaverse advancements; we’ll do that in a future blog.)
Next month I’ll get back into my regular cadence of blockchain musings, but given the release of our new book, my own experiences in today’s manifestation of the Age of Autonomy®, and the staggering rate at which tech is advancing, I thought it prudent to take a bit of a wider view for the moment.
If I’ve piqued your interest, of course, this is just a smidgeon of the conversations we explore in Crypto Decrypted. We hope you enjoy it and, as always, I welcome your comments and encourage those who have read the work to leave us a comment on Amazon, Barnes and Noble, or even via email!
On that note, this is a wrap! Be well, stay safe, and I’ll continue Decrypting Crypto for you!
Disclaimer: Not investment advice. This information should not be construed as a recommendation, investment or tax advice, or an offer or solicitation to buy or sell any security.