When banking made advancements to digital space, causing businesses migrated accordingly due to the attention this new "data space" was earning, marketing strategies changed, building models changed, all paying attention to the consumer space, and everything boiled down to the target demand.
And as you may have guessed, this is what is happening with crypto assets and blockchain technology only that it's way bigger.
The Laws of demand
From investopedia
The law of demand states that the quantity purchased varies inversely with the price. In other words, the higher the price, the lower the quantity demanded.
As with most physical products, "quantity" qualifies as "value", but when it comes to the digital ecosystem, this law of demand is wrong because "value" is outsourced to "network and technology" meaning that demand could significantly be higher even when prices are huge due to network state.
True or false? Just look at the value that flowed into the ecosystem taking Bitcoin from under $20k to $69k and pushing the crypto markets to trillions of dollars, most economic theories didn't apply to this digital asset market movement, this is something we have to pay attention to!
Blockchain as a building environment
In order to realize the potential of a product, a company, network or ecosystem needs to be acknowledged first. When Apple is mentioned, the dollar bills come rolling, where is the law of demand there?
How come smart cars are selling in high numbers regardless of this supposed law of demand? It's simple, "technology" matters.
Flexibility, value, user-friendly, robustness, limitless, and interoperable, to name a few merits of building with blockchain technology, the integration of its network assets will give a major boost to businesses, of course, we've already touched on how it can boost sales and revenues.
Elon Musk has been throwing out the idea of a so-called "everything app" and what this tells us is the urgency of building an ecosystem that encompasses finance, socialism, education, business, and the infinite list to complement the word "everything".
To achieve this, we need to look at how this system communicates from the base layer, so we factor in smart contracts, as they aid in interoperability and ultimately contribute to strengthening the financial system built around it.
We have to look at the value transfer medium, does it qualify as a "value network?" and is it powered by an asset directly contributed to the network and thus drawing sustainable value from it?
All of these are attainable for the digital economy via blockchain and crypto assets.
How?
To answer this, we have to ask questions like is the banking system interoperable?
At first glance, it does seem like it is, but it really isn't. A banking system is limited to its locality, a country's bank cannot directly interact with other banks nationwide, this is why there's a heck of limitations with cross-border payments.
The thing is, when we interact with foreign banking or financial networks, we often feel the money just leaves our account and enters theirs, but the reality is your bank must hold a reserve of those countries' currencies to facilitate that payment, your bank is a middle man and the actual entity that covers the transaction.
This is why fiat currencies can be manipulated beyond nations, the banking system robs the nation and uses that value to keep exchange rates lower than what they should be.
So you see, only crypto assets transfer value in real-time with actual Interoperability, in situations of inaccurate price feeds, arbitrage simply resets the markets in a flash. The digital economy will really greatly depend on this technology, and this is why it is attracting lots of builders and will attract even more.
Thank you and please leave a comment, your thoughts matter to me.
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