Cryptocurrency Is Not An Asset Class

in LeoFinance3 months ago

Many years ago, Marc Andreeson penned an article in the Wall Street Journal titles, Why Software Is Eating The World. In it, he laid out the case of how we were heading towards a truly digital future and the largest companies would be those based upon software.

A decade later, his view is realized. Right now the two largest companies in the world are Microsoft and Apple, followed by Amazon and Google. All built software platforms that enable them to leverage their returns. These companies just keep growing in size, with no signs of slowing down.

Andreeson was not referring to cryptocurrency but it certainly fits into this model. This is a software based monetary system that is unlike anything the world has seen. It was designed specifically for the digital world which makes it ideal for what is about to come.

Recently was saw the entry of Wall Street and other mainstream institutions start to enter through the purchase of Bitcoin. This, of course, got the typical market observers involved, leading many to believe cryptocurrency is another asset class.


These entities simply look at cryptocurrency as something else to invest in. To them, it is a way to get a return on their money. Hence, there is no different between cryptocurrency, commodities or equities. They all are investment classes to move in and out of.

This is a mistaken view. Cryptocurrency is not an asset class. The sooner people realize this, the better off they will be. To taking this view is to miss the larger picture.

So if cryptocurrency is not an asset class, what is going on?

Actually what people need to focus upon is that all assets classes will be crypto. This slight change shows how large this is going to be. It also spells the doom for a lot of mainstream institutions that appear to be permanently locked in our lives.

The process of tokenization changes the entire spectrum of investment. It goes to the core of all asset classes and brings them under this umbrella. There is not likely to be anything that does not get converted over in due time.

It is also a point that Wall Street misses.

They are approaching things like it is business as usual. This is far from the normal course of financial business that we are accustomed to. Instead, it is a radical shift in the control and ownership of assets.

We also can see how this will all lead to the removal of "middlemen", who really are nothing more than rent extractors from the system.

This is going to lead to a massive explosion is wealth generation. Anyone who owns an asset will be able to get it liquid. This will open up other financial avenues for people. At the same time, the ability for billions of people to get involved in this arena means that the distribution will be spread out. Creating an inclusive system will penetrate every asset class that we can think of.

Basically, this is a lot more than just banking the unbanked.

Through this process, we are going to see the elimination of the markets as we know them. Equities, commodities, FOREX, and bonds are all going to be wiped out. This means the present exchanges will not survive, at least in their present form.

Instead, all these assets will ended up being tokenized. This means they all can be traded for each other. Have some gold and want to swap it for shares in Apple? That can be done. Want to take a part of your home to invest in space exploration, you can do that. Swapping tokens of all types will be instant and seamless.


This means that the assets classes do not operate on different types of exchanges. In fact, the class itself is eliminated. They are all simply assets.

Big or small. Local or global. It is not going to matter. All will fall into the same category. The opportunities for involvement are only going to keep growing, to near infinite proportions.

Naturally, we have to extrapolate this idea into the virtual world also. People's creations can be traded the same was as IBM or Amazon stock. This will entice even more players into the system. Whatever is of interest to people is something that will be monetized. If the interest is large enough, there will be significant value.

Here is how we see the opportunity for financial freedom opening up to all. Whereas we are operating on a system where people need to have money to get started, the tokenization process is already opening up a forum for people to get rewarded. This means that they are getting the basic resources to begin their journey.

At the same time, their own creativity, work ethic, and talents will be tokenized, enabling them to multiply their financial holdings.

The key is that the masses can participate in the creation of trillions of dollars in new wealth. This is not only from a user perspective but also an ownership one.

Ultimately, we end up with a system that has massive liquidity. Since it is all is effectively in one pot, everything is tradeable for anything else. Of course, there will be some limits in terms of what the wallets can handle depending upon the protocols that are embraced. However, as long as something uses whatever becomes the accepted norm in that area, all liquidity could potentially apply to all assets.

This means that the liquidity, overall, is available; the only question is there interest in that particular asset.

It is an entirely new paradigm that is being constructed. This is also something that is guaranteed to happen. While the existing system still holds on, its forum is the physical world. It is not designed to embark into the virtual world, one that is rapidly appearing.

Thus, it is likely we see this massive explosion in the virtual realm first and then extending outward to claim the assets that are now represented using traditional models.

Therefore, cryptocurrency is not an asset classes; all asset classes will end up being cryptocurrency.

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The real change in paradigm in this is all about the control. What I see happening even now is that some in the elite old guard see this and are already attempting to quash the movement or at least maintain control by manipulating legislation. It's going to be an interesting fight because, as you have pointed out in other posts, crypto is here to stay and it is a juggernaut.

Viva la Revolution!

Certainly those in power do not want to lose said power. That is human nature. In this instance, we are not asking permission though.

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The old rules no longer apply. The possibility of infinite wealth creation will bring in the masses. The legacy system has hurt many personal balance sheets. Blockchain will equalize and balance it.

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Agree! We are living in very exciting times indeed @automaton (:

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The old rules no longer apply.

This is what I keep telling people. We are in a world of network effects which amount to exponential growth. The last couple decades of watching mega tech tell us the entire story.

Now we are just creating something that is spread out more and can include more people.

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Ultimately, we end up with a system that has massive liquidity.

I want to see this happen. The biggest barrier for large investors is probably the lack of liquidity and it means they can't get out without affecting prices.

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When everything is in the same pool, there will be no liquidity problem.

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That's the problem. There are just too many exchanges so I think there will always be a liquidity problem. For example, would you choose bLEO or wLEO? I guess prices revert eventually but I don't think everything will be in the same pool.

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Bang, I did it again... I just rehived your post!
Week 54 of my contest just can now check the winners of the previous week!

It's an interesting vision, but still somewhat blocked by electricity and networking coverage over the globe. However with initiatives like's Elon Musk's satellites net, and micro-power devices getting better and better, we may see some of it starting within our livetimes. In our regions. None of it will happen anytime soon in less tech-advanced areas where people live off grid most or all the time. But I don't see any problem with making the gap even worse. If with this advancement we manage to clean up at least some of our mess, that's a bit of a mess that maybe they will be spared from when running-up..

Communication systems are being built out and I would say by the middle of this decade, the entire world will be online.

That will create an entirely new system for people. There are a lot, billions in fact, who are presently not involved because they lack access.

This will change which will bring in billions of new minds into our global knowledge base.

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by the middle of this decade, the entire world will be online
Hey. It's 2021. 20% of that half-of-decade you said has already passed. Middle of this decade is 2025. "entire world will be online"? Sorry, but that's not even possible if the whole world consisted only of copies of the USA and if the USA solved its problems :) By the end of this decade, North America won't get out of its political and cultural problems, South America won't do any better to get out of its financial crisis, Africa maybe will get some extra coverage around the few most developed cities, Europe won't be any more united and more likely will be more divided than ever, North Asia will still be ruled by the same parties and companies, Middle Asia, well, yeah, they will get more coverage and surveillance than anyone so far ever before, Australia and north and south pole and the great ocean - no idea. In just 4 years or 9 years from now, it won't be that different than it is now. 30 or 50, that's much more like it. So maybe you mistook half-of-decade with half-of-century?

all assets classes will be crypto.

This fought my attention
This changes the whole landscape and the reach. Surely to change out thinking.

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It really does change everything. The financial people are looking at things like they always did when the entire playing field is being altered.

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Actually what people need to focus upon is that all assets classes will be crypto. This slight change shows how large this is going to be. It also spells the doom for a lot of mainstream institutions that appear to be permanently locked in our lives.

You've nailed it, my friend.

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it's basically his job to forecast the doom of governments, banks and other institutions. We wouldn't want him any other way :P

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Very curious to see how and where this all ends up as so much is changing so quickly.

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Estoy de acuerdo. Esta es una gran era que promete mucha libertad financiera. Como los NFT en arte, yo he intentado trabajar en páginas como FIVERR en donde conseguir un cliente es muy dificil, porque hay mucha competencia, tu oferta queda en el fondo del fondo y nadie lo ve. Nunca tuve un trabajo como ilustradora ahí, pero desde la tokenización he podido crecer como ilustradora y pagan lo que yo considero que vale mi obra haciendo todo tipo de trabajo digital que yo cree un trabajo de valor.

I agree. This is a great era that promises a lot of financial freedom. Like NFTs in art, I have tried to work on pages like FIVERR where getting a client is very difficult, because there is a lot of competition, your offer is in the background and nobody sees it. I never had a job as an illustrator there, but since tokenization I have been able to grow as an illustrator and they pay what I consider my work is worth doing all kinds of digital work that creates work of value.

There are many opportunities on here for people to exhibit and profit from their skills. I imagine there would be some projects in need of an illustrator.

Exciting times are ahead.

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tokenization / Digitalization
I think the process itself is more important than currencies and so on
The digital transformation of the world was a huge revolution
And the digital transformation of money will be the biggest revolution

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Even as invested as I am in cryptocurrency, I still have a hard time seeing a world were crypto is the base of everything. I am not saying it isn't going to happen, I just think it is still hard for me to wrap my head around it. In some respects I am probably a lot like the other where I see it as an asset class. Even though I know the benefits and utility that blockchain can have in so many different areas.

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Through out all you know because it is basically worthless in the world we are entering.

It is like those who knew about journalism or the record industry were totally upended by the Internet. Everything they knew about their business was tossed out in a matter of only a couple years.

We are going to see the same thing with all this.

Instead of crypto, think networks. That will help provide some insight.

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Yeah, I can see that. My brother in law worked for a newspaper for years. Not so much anymore. He bounced around from paper to paper for a while as they started to shut down. Now he works in the school system and I honestly think he is much happier. It will be interesting to see what else is disrupted. Change is coming!

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I'm sure governments will issue their own centralized and regulated crypto assets or whatever they will be called so I don't think things will go down as you envisioned them but it certainly appears we are heading towards the kind of world you are describing

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They might. But then again, when have the government ever been able to stop technology.

They cant even put a stop to music pirating.

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I think the digitization and tokenization of a lot will be inevitable. However, it will take an ultra efficient system to deal with all these changes (not to mention people's behavioral change in the future... which is quite a big unknown).

However, it will take an ultra efficient system to deal with all these changes...

I disagree. The Internet is a complex system that is not ultra efficient in terms of the changes that took place within society. Yet somehow, in spite of the lack of clear direction, people still embraced the internet and changed the way we do everything from shopping to bill paying to socialiaing.

Tokenization is just the Internet yet in the world of money.

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all assets classes will be crypto

How these few words show the flipside for the entire traditional way of thinking! People need to get ready for the flippenings, in more and more areas.

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It changes the entire perspective, doesn't it?

This also shows how big this thing will become.

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That's a great vision and hard to deny. I'm very excited about the cardano project in Africa. Crypto is the antidote for corruption and inflation.

It's like the matrix meme. Neo keeps asking when to sell and morpheus answers: "When bitcoin is ready, you won't have to sell."

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I’d say Bitcoin is an asset class since it only exists as an on chain asset be it on its own chain or other chains!

I do think alot value gets either digitised or a digital resprentation gets updated to a blockchain version sooner or later

Home ownership, stock certificates the works, and I feel like Bitcoin will proved the liquidity to flow in and out of these different assets with ease! Settle your home purchase in Bitcoin and have finality of transaction once the owners sign the multi sig DLC and the local land oracle confirms it!

Can you imagine? Selling your home privately and doing it all yourself with a few clicks? No agents cutting in fees no lawyers

Imagine how efficient sales can happen it’s going to be crazy once this unlocks and people will think how did we even do this before the same way we look at how we travelled with maps instead of a GPS

Can you imagine? Selling your home privately and doing it all yourself with a few clicks? No agents cutting in fees no lawyers

Yes I can imagine.

It is no different than buying stock without a broker, a thought that was completely unimaginable 35 years ago. And today, not only can we do it without a broker, we can do it for free.

I do disagree with you about Bitcoin. I do not foresee a world where there is one settlement currency. Bitcoin is too deflationary to operate in that capacity. It might be levered as collateral by those holding it; in fact I bet it would.

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Crypto Is just a store of value.. that went up 15,000% in a few months. ... a little better than Gold.

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i love it, this is a great post and one vision to the future =D!

Thank you for the interesting article. I have included you in my "I Am Engaged Challenge" for today. Be watching for it @slackerman later today!

This is an interesting vision of the future as we already see this happening with Tesla on Binance. Really great points here, I'll be interested to see when this may become a more widespread reality.

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really liked this article! it is the most forward-looking and inspiring one I read in a while!

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I could see how the future would look like from this post. I just start to understand how crypto works and it would be changing our current situations. The main lesson that I get is from your post. While some of them are still difficult to understand, I try to grasp them slowly. It is not because of your writing, by the way. I know you penned well. It is caused my level for this matter. I am glad if you have any suggestion for me to get lessons about this new system. Thank you.

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All people need ur to asset