The narrative around crypto so far has been about the price of crypto assets. People talk of fortunes made and lost by trading and speculating on crypto, but less talk has been around the adoption of the decentralized systems. The cryptocurrencies and other tokens derive value from the use of the underlying systems.

So an assessment of the value of crypto overall needs to start with the use and potential adoption of the decentralized finance system.

In this post I want to talk about some of the trends in markets leading me to believe crypto adoption will continue to increase. To do this, we first need to look at some of the primary parts, and ethos, of crypto. The genesis and growth of the ecosystem have largely been built around a few main ideas.

This is the idea that we want to control our own data, including our money. Before we had large custodians and exchanges, Bitcoin was held in individual wallets. I owned the ability to control and transact my bitcoin because I held the private key to my digital wallet.

Holding the private keys to my ETH wallet gives me the ability to transact with Decentralized Finance protocols. I don’t have to ask anyone’s permission to do so.

Bitcoin was borne out of the 2008 financial crisis, which was caused by banks that invested their pools of capital in an irresponsible manner, and we were the ones paying fees to these banks.

Since crypto involves public blockchains with transactions processed by validators or miners in a decentralized manner, we can take the banks out of the equation.

This disintermediation holds for insurance companies, exchanges, brokers, and other intermediaries that practice rent-seeking behavior.

Now we have those two main aspects of the ethos and impetus behind crypto and DeFi. We should look at some of the trends in finance and in behavior which give an indication crypto is a next evolution.

For several years, people and now businesses have been earning money and providing services with their talents or something “extra” they had. Technology is the magic element that allowed the unlocking of this value.

The gig economy really thrived first with websites like Fiverr and Upwork. Anyone, anywhere in the world could preform jobs like designing business cards and websites, to placing flyers in coffee shops. They were making money from their spare time and talent. Those needing the services could find the talent in minutes including their resume, previous work and ratings. The system also allows for escrowed payment.

The gig economy extended to app-based services like DoorDash, TaskRabbit, and Favor.

The spare economy started with AirBNB and VRBO. The ability to take even a spare bedroom and rent it out became so simple. Extra value and extra income.

Uber and Lyft took people’s spare time and vehicle, and turned it into value through their app. Also this made for a few important points.

Individuals could earn extra money, or even have an entire career, without having to get a typical job from a company. People have been given more soveriegnty over their income. They often can stay in a geographic location of their choosing without the need to move for work.

Even within these systems, the self sovereignty is fascinating. Talk to 10 ride-share drivers, and you’ll get 10 different responses as to why they drive, when, how they max the system for their lifestyle and needs.

People are trending toward less reliance on bigger companies. This had not yet trickled down to finance and banking, as the pieces were not yet in place.

Lending Club, and others like it, really need to be studied in relation to growth in the DeFi ecosystem.

Lending Club was underwriting personal loans, and then giving individual investors the ability to participate in those loans.

Investors were able to earn income, which in the past, was the exclusive domain of banks and other large lenders. This is significant on two levels. First, people now had the ability to invest in loans to another individual, earning more income than just a bank deposit, and without the need to go through a broker or other regulated entity. Peer-to-peer lending was a new portion of some investment portfolios.

Also, we saw people able to get relatively small personal loans. Individuals have a choice between something like a HELOC and using credit cards.

Another lending-related trend is the Buy Now-Pay Later (BNPL) trend seen with companies like Affirm. This is really an extension of the ability to buy furniture and pay over 3 years.

BNPL is just personal loans, but tied to your purchase of a particular product or service, and mainly delivered online.

Retailers are obviously interested in giving more payment options, and consumers are willing to take a loan to buy a product on the spot.

Years ago I cut the cable cord and started using only streaming services. I started with Amazon and Netflix, but have added and subtracted based on the available shows, and my life at the time. When my child finds a show she enjoys, I often need to add a new service for maybe 30 days.

Again, two-fold impact.

I have the ability to tailor my entertainment experience to exactly my interests and lifestyle. Also, the streaming services like Netflix are able to really understand their viewers’ likes and dislikes. They can serve me shows and movies I might like based on my history, and they can choose to invest production dollars and time into shows they are confident will draw viewers and subscribers.

There are a few. One common thread we see is the desire of the individual to create a customized experience whether it is the entertainment experience, or the investment experience. The individual wants sovereignty over the investment of their time and money.

They can use technology to create a custom life experience and no longer wait for outside entities to dictate their lives. Part of this move to individual life creation and management comes at the expense of established entities. When the teach and platform is available, people will choose the path of individualization.

Another commonality is the availability and use of data to give the users or customers the experience they want. Users are demanding individualization and the tech is there to deliver.

These trends don’t point exactly to DeFi or Web 3 or Crypto, but they do show us how people have and continue to use and adapt technology. If we see crypto as the next evolution of this technology, we should expect people to start adopting in moves toward ever-greater sovereignty and transparency.

The narrative around crypto so far has been about the price of crypto assets. People talk of fortunes made and lost by trading and speculating on crypto, but less talk has been around the adoption of the decentralized systems. The cryptocurrencies and other tokens derive value from the use of the underlying systems.

So an assessment of the value of crypto overall needs to start with the use and potential adoption of the decentralized finance system.

In this post I want to talk about some of the trends in markets leading me to believe crypto adoption will continue to increase. To do this, we first need to look at some of the primary parts, and ethos, of crypto. The genesis and growth of the ecosystem have largely been built around a few main ideas.

This is the idea that we want to control our own data, including our money. Before we had large custodians and exchanges, Bitcoin was held in individual wallets. I owned the ability to control and transact my bitcoin because I held the private key to my digital wallet.

Holding the private keys to my ETH wallet gives me the ability to transact with Decentralized Finance protocols. I don’t have to ask anyone’s permission to do so.

Bitcoin was borne out of the 2008 financial crisis, which was caused by banks that invested their pools of capital in an irresponsible manner, and we were the ones paying fees to these banks.

Since crypto involves public blockchains with transactions processed by validators or miners in a decentralized manner, we can take the banks out of the equation.

This disintermediation holds for insurance companies, exchanges, brokers, and other intermediaries that practice rent-seeking behavior.

Now we have those two main aspects of the ethos and impetus behind crypto and DeFi. We should look at some of the trends in finance and in behavior which give an indication crypto is a next evolution.

For several years, people and now businesses have been earning money and providing services with their talents or something “extra” they had. Technology is the magic element that allowed the unlocking of this value.

The gig economy really thrived first with websites like Fiverr and Upwork. Anyone, anywhere in the world could preform jobs like designing business cards and websites, to placing flyers in coffee shops. They were making money from their spare time and talent. Those needing the services could find the talent in minutes including their resume, previous work and ratings. The system also allows for escrowed payment.

The gig economy extended to app-based services like DoorDash, TaskRabbit, and Favor.

The spare economy started with AirBNB and VRBO. The ability to take even a spare bedroom and rent it out became so simple. Extra value and extra income.

Uber and Lyft took people’s spare time and vehicle, and turned it into value through their app. Also this made for a few important points.

Individuals could earn extra money, or even have an entire career, without having to get a typical job from a company. People have been given more soveriegnty over their income. They often can stay in a geographic location of their choosing without the need to move for work.

Even within these systems, the self sovereignty is fascinating. Talk to 10 ride-share drivers, and you’ll get 10 different responses as to why they drive, when, how they max the system for their lifestyle and needs.

People are trending toward less reliance on bigger companies. This had not yet trickled down to finance and banking, as the pieces were not yet in place.

Lending Club, and others like it, really need to be studied in relation to growth in the DeFi ecosystem.

Lending Club was underwriting personal loans, and then giving individual investors the ability to participate in those loans.

Investors were able to earn income, which in the past, was the exclusive domain of banks and other large lenders. This is significant on two levels. First, people now had the ability to invest in loans to another individual, earning more income than just a bank deposit, and without the need to go through a broker or other regulated entity. Peer-to-peer lending was a new portion of some investment portfolios.

Also, we saw people able to get relatively small personal loans. Individuals have a choice between something like a HELOC and using credit cards.

Another lending-related trend is the Buy Now-Pay Later (BNPL) trend seen with companies like Affirm. This is really an extension of the ability to buy furniture and pay over 3 years.

BNPL is just personal loans, but tied to your purchase of a particular product or service, and mainly delivered online.

Retailers are obviously interested in giving more payment options, and consumers are willing to take a loan to buy a product on the spot.

Years ago I cut the cable cord and started using only streaming services. I started with Amazon and Netflix, but have added and subtracted based on the available shows, and my life at the time. When my child finds a show she enjoys, I often need to add a new service for maybe 30 days.

Again, two-fold impact.

I have the ability to tailor my entertainment experience to exactly my interests and lifestyle. Also, the streaming services like Netflix are able to really understand their viewers’ likes and dislikes. They can serve me shows and movies I might like based on my history, and they can choose to invest production dollars and time into shows they are confident will draw viewers and subscribers.

There are a few. One common thread we see is the desire of the individual to create a customized experience whether it is the entertainment experience, or the investment experience. The individual wants sovereignty over the investment of their time and money.

They can use technology to create a custom life experience and no longer wait for outside entities to dictate their lives. Part of this move to individual life creation and management comes at the expense of established entities. When the teach and platform is available, people will choose the path of individualization.

Another commonality is the availability and use of data to give the users or customers the experience they want. Users are demanding individualization and the tech is there to deliver.

These trends don’t point exactly to DeFi or Web 3 or Crypto, but they do show us how people have and continue to use and adapt technology. If we see crypto as the next evolution of this technology, we should expect people to start adopting in moves toward ever-greater sovereignty and transparency.