For many people, crypto is still nascent and even scary, its erratic volatility translates into higher risk while many still don’t believe these assets have any intrinsic value. Nevertheless, crypto represents an innovative force that disrupts the traditional world including finance and investment and it is once-in-a-lifetime opportunity for most people. Here are the top reasons for crypto to win over time:

1. More value propositions: while stocks only represent equity (shares in a company), cryptos can be so many things all at once. They can be commodities like gold and silver, which are traditional store of value, and can also function like equities to entitle someone to a share of the network/organization’s earnings and governance or voting rights. They can also be utility tokens, used for transaction fees, eligibility for discounts, or function like memberships/points/awards for rewarding loyalty or contributions. They can also mimic the characteristics of treasury bonds: producing a yield that is risk-minimized (there is articles about Ethereum being the new internet bonds). In addition, because they are easy to transfer and are born global, they are new global digital payments systems and the tokens can play the role of currencies, this is how the name “cryptocurrency” come into being.

Therefore, the value of crypto = store of value + equity + bonds+ reward points/memberships + utility value + monetary premium + more creative use cases.

2. Cryptos are better investment vehicles due to the elimination of information asymmetry. The most critical feature offered by blockchains is trust. As decentralized blockchains automatically maintain a public immutable distributed ledger of all transactions that no one can compromise, they solved the trust issue between counterparties coming into trades/transactions/deals. The ledger is public, transparent and in real-time so nobody can “cook the books”. This is a huge advantage over stocks, where investors worry about companies manipulating numbers in financial statements. In crypto, there is no need to trust the company for reporting their performance and there is no need for auditors as anyone in the world can compile any financial reports for any network/DAO and everyone can freely audit them. Another very important issue the blockchains solved is the time lag of financial reporting for stocks. Investors must wait for quarterly reporting to know how a company is doing. With crypto projects, you can assess the health of the network or a DAO (Decentralized Automatic Organization) in real time via on-chain analytics whenever you want to as blockchains are running 24x7 and the data is always there in real time.

3. Adoption Cycle + Network Effects = Exponential Growth: Crypto networks are social and monetary networks enabled by blockchain technology. You can call them the Web 3.0, or the next generation of Internet. These networks have an adoption rate of twice the speed of Internet in its early stage. And we all know how internet has changed the world and how much value and wealth creation it brought. Just look at the valuations of tech companies, for example, Apple, Amazon, Alphabet, each with trillions in market cap. Imagine new organizations/networks that are growing twice as fast as Amazon in the 90s. There is indeed unlimited potential of these new innovative networks/organizations/protocols/communities.

There are many other reasons such as the open-source nature of Web 3.0, the composability of blockchain protocols, self-custody of assets (no intermediary necessary), the global reach/inclusiveness, the Metaverse, and the rise of community-driven economy. I will explore these in future. Please stay tuned.

For many people, crypto is still nascent and even scary, its erratic volatility translates into higher risk while many still don’t believe these assets have any intrinsic value. Nevertheless, crypto represents an innovative force that disrupts the traditional world including finance and investment and it is once-in-a-lifetime opportunity for most people. Here are the top reasons for crypto to win over time:

1. More value propositions: while stocks only represent equity (shares in a company), cryptos can be so many things all at once. They can be commodities like gold and silver, which are traditional store of value, and can also function like equities to entitle someone to a share of the network/organization’s earnings and governance or voting rights. They can also be utility tokens, used for transaction fees, eligibility for discounts, or function like memberships/points/awards for rewarding loyalty or contributions. They can also mimic the characteristics of treasury bonds: producing a yield that is risk-minimized (there is articles about Ethereum being the new internet bonds). In addition, because they are easy to transfer and are born global, they are new global digital payments systems and the tokens can play the role of currencies, this is how the name “cryptocurrency” come into being.

Therefore, the value of crypto = store of value + equity + bonds+ reward points/memberships + utility value + monetary premium + more creative use cases.

2. Cryptos are better investment vehicles due to the elimination of information asymmetry. The most critical feature offered by blockchains is trust. As decentralized blockchains automatically maintain a public immutable distributed ledger of all transactions that no one can compromise, they solved the trust issue between counterparties coming into trades/transactions/deals. The ledger is public, transparent and in real-time so nobody can “cook the books”. This is a huge advantage over stocks, where investors worry about companies manipulating numbers in financial statements. In crypto, there is no need to trust the company for reporting their performance and there is no need for auditors as anyone in the world can compile any financial reports for any network/DAO and everyone can freely audit them. Another very important issue the blockchains solved is the time lag of financial reporting for stocks. Investors must wait for quarterly reporting to know how a company is doing. With crypto projects, you can assess the health of the network or a DAO (Decentralized Automatic Organization) in real time via on-chain analytics whenever you want to as blockchains are running 24x7 and the data is always there in real time.

3. Adoption Cycle + Network Effects = Exponential Growth: Crypto networks are social and monetary networks enabled by blockchain technology. You can call them the Web 3.0, or the next generation of Internet. These networks have an adoption rate of twice the speed of Internet in its early stage. And we all know how internet has changed the world and how much value and wealth creation it brought. Just look at the valuations of tech companies, for example, Apple, Amazon, Alphabet, each with trillions in market cap. Imagine new organizations/networks that are growing twice as fast as Amazon in the 90s. There is indeed unlimited potential of these new innovative networks/organizations/protocols/communities.

There are many other reasons such as the open-source nature of Web 3.0, the composability of blockchain protocols, self-custody of assets (no intermediary necessary), the global reach/inclusiveness, the Metaverse, and the rise of community-driven economy. I will explore these in future. Please stay tuned.