This is something that has been discussed regarding the US economy. The basis is the idea of massive technological advancement, including convergence that start to move the GDP growth rate to the 8% or 10% level.
In this video I discuss the analaogy of that to blockchain economies. If this comes into being, what does it mean for blockchain economies? Considering Web 3.0 is miniscule right now, we can see how this could go exponential.
▶️ 3Speak
This is a very important subject in terms of macro economics because some countries are actually working on running their economies not backed by US dollars but by crypto currency.
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This is very educational. I don't think governments are prepared for it if Web 3.0 goes exponential. A lot of them are slowly trying it out, but they seem to be behind by a lot.
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In this video, the host discusses the concept of "hyper-exponential growth" and how it could apply to the blockchain and Web3 economies. He references a report by ARK Invest that forecasts the U.S. GDP could see a sustained growth rate of 8-10% by the end of this decade, driven by the convergence of powerful technologies.
The host then draws an analogy between the U.S. economy, represented as a massive oil tanker, and the current blockchain economy, which he likens to a small jet ski. He argues that if the U.S. economy can achieve 10% annual growth, the much smaller blockchain economy could potentially see hyper-exponential growth of hundreds or even thousands of percent per year.
The host suggests that by incorporating the same technological advancements that are driving growth in the traditional economy into the Web3 space, the blockchain economy could experience explosive expansion. He highlights the potential for tokenization, even at a local level, to fuel this hyper-exponential growth, as the current Web3 ecosystem is still in its infancy.
Detailed Analysis:
The host begins by discussing a report from ARK Invest that forecasts the U.S. GDP will have a sustained growth rate of 8-10% towards the end of this decade. ARK believes this is due to the convergence of powerful technologies, such as electric vehicles, AI, and digital wallets.
While the host acknowledges this is a forecast and open to debate, he sees it as an interesting premise to apply to the blockchain and Web3 economies. He notes that ARK's mention of "digital wallets" does not necessarily equate to blockchain-based technologies, as traditional payment systems like PayPal and Square also have digital wallet offerings.
The host then draws an analogy to illustrate the potential for hyper-exponential growth in the blockchain economy compared to the more established U.S. economy. He likens the U.S. economy to a massive oil tanker, slow-moving but resilient, while the blockchain economy is akin to a small jet ski, much more agile and flexible.
Using a hypothetical example, the host explains that if the oil tanker (U.S. economy) grows by 10% annually, it would add 60 feet to its 600-foot length each year. In contrast, the jet ski (blockchain economy) may only add 5 feet, but this represents a 12x growth rate. The host argues that the blockchain economy, starting from a much smaller base, has the potential for exponentially higher growth rates.
The host acknowledges that the U.S. economy's growth will not be evenly distributed, as there will be both winners and losers due to disruption and legacy systems. He cites the example of the decline of Nokia and Motorola's cell phone divisions in the face of the smartphone revolution.
Applying this concept to the blockchain economy, the host believes that by effectively incorporating the same technological advancements driving growth in the traditional economy into the Web3 space, the blockchain economy could potentially experience hyper-exponential growth of hundreds or even thousands of percent annually. He notes that the current Web3 ecosystem is still in its infancy, with very little true economic output, providing ample room for explosive expansion.
The host highlights the potential for tokenization, even at a local level, to fuel this hyper-exponential growth, as it could unlock new avenues for economic activity within the Web3 ecosystem. He concludes by emphasizing the enormous potential of the blockchain economy and the possibility of seeing unprecedented growth rates in the coming years.