Under Cryptocurrency Bonnet
Let’s take a look under the cryptocurrency bonnet so that we can better understand the investment opportunities currently available investing in the blockchain network, which is facilitating the building of the digital world in this current era of the Fourth Revolution.
The abstract world, the nonphysical world is more challenging for investors because human sensors, eyes, and ears cannot see or hear the blockchain network being built, which I believe will be the greatest investment opportunity of our era. In the Fourth Revolution, there is no physical worksite dotted with earth-moving equipment and workmen with hard hats beavering away. No railroads are being built, or highways or factories. The fourth revolution is unlike the previous industrial revolution which unfolding at a breakneck pace, unless you are a developer, most people won’t hear or see this greatest digital transformation and disruption of our age which is about to radically change the way humans interact work, and play.
Cryptocurrencies represent a token or a piece of this blockchain network that is powering this digitalization of everything from smart contracts to gaming and everything in between
So, the blockchain network of the fourth revolution will be as disruptive as what the combustion engine was during the industrial revolution of the last century.
Let’s go on a journey of discovery into the nonphysical world of the blockchain network by looking under the cryptocurrency bonnet
My focus is on the engine, the blockchain network, which is powering digitalization, and where I believe alpha investment opportunities in cryptocurrencies could be going forward.
So, the blockchain Ethereum network is the engine driving a string of disruptive applications which include the decentralization of currencies, cryptocurrencies, and the decentralized finance DEFI.
The latter, DEFI is where the middlemen of finance, the bankers, brokers, lawyers, will be replaced by a digital protocol, the blockchain.
Looking under the cryptocurrency bonnet the blockchain network, the engine of digitalization, is currently evolving similar to the way the combustion engine evolved during the last century
Those of you who have a passion for classic cars, or who have rebuilt a classic car understand how the fuel delivery system evolved over the last four decades. The combustion engine’s first fuel delivery system was a carburetor. Then due to rising gas prices and green policies, auto engineers were faced with the challenge of how to improve engine fuel efficiency, reduce emissions and maybe improve engine performance. The naked ape’s endless quest for discovery, pushing the boundaries led him to the fuel injection engine.
Looking under the cryptocurrency bonnet we see similar evolution underway with the blockchain network, the engine of the fourth revolution
The Ethereum blockchain network, the network of choice for app developers for building connecting compatible blockchain networks became so popular because of its high encryption security, its compatibility demand for the network has led to congestion high transaction fees, and high gas prices.
So ethereum network is being rebuilt with fuel-efficient in mind
The current proof of work (POW) network requires huge amounts of computational power and energy with miners needing to sell their coins to ultimately foot the bill; Proof of Stake (PoS) gives mining power based on the percentage of coins held by a miner.
I see developers building in Ethereum compatible networks, where they will mine using POS mechanism which provides faster and cheaper transactions for applications that are high volume low contact value. The battle for a global payment digital system is likely to be a cryptocurrency with a POS mining mechanism on an Ethereum compatible network.
Meanwhile, high-value transactions, bond sales, property transactions where security is paramount will likely be built on a POW mining mechanism.