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1/ What are the types of industries that will be affected by the blockchain?
2/ First, we have to look at what industries were affected by the internet.
3/ What the internet is fundamentally is a medium to publish. You can publish media (data, articles, photos, video).
4/ What wasn't clear in the 90s was what was different and what new behaviors this enabled.
5/ People thought of media simply as workflow. Meaning I have the Boston Globe, NYTimes, Colombia Records, Walmart, and I put them online.
6/ So the gold rush of the 90s was to turn everything online.
7/ Then, you had the first generation of dot com leaders (Geocities, Alta Vista, and Ebay).
8/ The unique characteristics that the first generation didn't get was that metadata enabled trust enabled long tail goods.
9/ The goods and publishing era pre-internet was entirely based on brand. I buy Clorox, Nike, and other things because I trust the brand.
10/ The second generation of internet companies starting with Google, Paypal, were more designed creating networks that enabled trust.
11/ Google was a network using Pagerank that enabled trust in search results. Amazon using reviews to trust long tail products.
12/ What this enabled was a cascading effect that enabled them to aggregate demand and supply in a virtuous cycle.
13/ This is known as the Aggregation Theory from @benthompson
14/ So now you have the blockchain which is the new distributed system enabled by cryptography.
15/ Naturally, you have people trying to disrupt or kill the previous big winners (FB, Google, Uber, AirBnB) by playing on the same field.
16/ The field they play on is the metadata and media field. So Status, Steem.it, BitClave, and more are trying, but is this the strategy?
17/ I would argue no because if the internet disrupted media, crypto will disrupt finance and law.
18/ Already, bitcoin acts as the federal reserve and central bank. All the alt coin volatility are pegged to bitcoin.
19/ So if bitcoin is the central bank. What are the rest of the banking system?
20/ Most of banking is separated by volatility and sector. Commercial or retail banking and by different asset classes based on volatility.
21/ So for example in retail banking, stocks, bonds, junk bonds, municipal bonds have different type of yields with different volatility.
22/ They are also sold to different type of investors. Most people cannot stand volatility and hold S&P 500 with a mixture of bonds.
23/ As you get more and more volatile, you can go from consumers to accredited investors to qualified purchasers.
24/ So in other words, the more money that you have, the more you can afford to lose and in the eyes of the SEC, you are "sophisticated."
25/ So, who exactly is buying bitcoin right now and what type of assets do they prefer?
26/ Some estimates of bitcoin say that only 300,000 people own more than 5k of bitcoin.
27/ If this is true then most of crypto is driven by the whales. The accredited investors and qualified purchasers.
28/ If you look at Brave, only 3 people participated in the ICO, and it was 30m raised.
29/ So if you assume this is the case, then right now the appropriate analogy is that we're in the junk bond or alternative asset class
30/ High volatility and high risk and only designed for wealthier investors.
31/ I would argue that the crypto chains that are related to crypto whales will do the best. The current scheme is ICOs
32/ But soon it will go to other aspects of commercial banking including agency, utility functions, secured loans, and bank reserves.
33/ Tokenizing real estate, art. The question is what will the crypto individual and organization whales want to put their money in?
34/ You could argue that ICOs is a direct result of crypto whales investing.
35/ You could argue that Filecoin is what crypto orgs want to build on top of. That's why it's more interesting than other storage networks
36/ Simply aggregating the other organizations and enabling them to build is valuable in it of itself.
37/ That's also why @OverstockCEO 's new venture is so interesting as well. It's tokenizing short sales and lending.
38/ This is what fundamentally drives the crypto market today not the media and metadata driven internet.
39/ Interesting things do happen when you combine the two, but that's for another tweetstorm.
40/ In conclusion, crypto is driven by the whales. Lower and lower volatility banking products for the whales will be key for adoption.
