In a recent episode on the Evolvement Podcast, Michael Nye interviewed Mark Yusko, the Founder and CEO of Morgan Creek Capital Management, a highly regarded entrepreneur, speaker, and advocate for Bitcoin and blockchain. In this interview, Yusko shared deeply valuable insights about Bitcoin, blockchain, the global economy, and the future of our world. The common thread was that of the deep-rooted evolution our world is undergoing as a result of the technological innovations and paradigm-shifts ushered in by Bitcoin and blockchain. However, as if human beings consistently forget the patterns and precedents set by the past, many believe that Bitcoin and the cryptocurrencies, utility tokens, security tokens, and other formats that it inspired are nothing more than a farce, a scam, a science-fair project with no real utility or value. Yusko brazenly reminded listeners of the podcast that history shows a significant pattern of decade-and-a-half cycles that introduce groundbreaking changes to our society. Beginning in 1996, “the big one”, as Yusko described it, was the internet that took the world by storm after years of criticism. Years later, in 2010, Apple placed supercomputers in the palms of people’s hands, which went on to drastically shift social, political, and financial markets globally. Now, as we approach the turn of the second decade of the 21st century, we are closing in on the next massive cycle; the blockchain era. More specifically, Yusko asserts that the next generational shift in our world will come in 2024 and will be catalyzed by blockchain technology, which he describes as the age of the “trustnet”.
“The blockchain-era’s emergence is the mark of a shift towards direct, instantaneous, peer-to-peer exchange of value”
The future, Yusko says, is a completely digital world that has done away with centuries-old technology that runs our banking system, stock markets, and other institutions. The age of the rent-seeking middleman is ending; ushering in an era where the core tenets of free trade are realized and the medium of exchange becomes truly ‘free’. In the 19th century, when the burden of trust in the Western world was placed squarely on middlemen to keep account of money and facilitate exchange, the stage was set for centuries of middlemen taking egregious fees for a core human right to store and exchange value. The blockchain-era’s emergence is the mark of a shift towards direct, instantaneous, peer-to-peer exchange of value without storage costs nor a trusted intermediary to levy a fee on each transaction. The direct implication of this type of system is that the world is becoming more borderless, especially in the context of commerce. For example, Yusko directly referenced the 12% fee for international transactions via Western Union as a derived benefit of blockchain-based methods of exchange. In this new paradigm, Yusko says, “we can trade 24/7 globally, we’re borderless, we’re frictionless, transaction fees go down, global markets increase which means price discovery rises which means prices actually go up.” Consider, too, that the availability of financial opportunity depends heavily on geography and politics in today’s world. On the one hand, the New York Stock Exchange is only open for select hours in the American daytime, and spends more time shuttered and closed than it does in operation. If you live in Southeast Asia, your waking hours are simply outside the trading window of opportunity. Yusko states “we should have global 24/7 tradeable markets… people can trade when they want, where they want, and how they want”, which is another immediate benefit realized by the advent of cryptocurrency. The markets do not sleep, and the virtual trading desks do not close. Nonetheless, these two high-impact examples barely scratch the surface of the groundbreaking evolution that our world is undergoing. As Yusko clearly stated, “this new financial system is based on trust in code, not trust in people”. However, still five years away from what he described as the “ah-ha moment” for blockchain technology, the dissenting opinions from all rungs of society have continued to echo throughout social media, television and internet publications.
“If you have an idea and everybody disagrees, you are probably on to something”
Much like the internet in the late 20th century, cryptocurrency, especially Bitcoin, has had no shortage of direct, public criticism clearly intended to slow its rise to critical mass. When posed the question of Bitcoin criticism by big-names like Warren Buffett and Jamie Dimon, Yusko tactfully reminded listeners to “consider the source”. All criticism must be taken in context, which is inclusive of the individuals biases, experiences, expertise, and most of all, the revenue models of the critic. Yusko drove this point home with a clever juxtaposition; “don’t ask a candle maker what they think of Mr. Edison’s wonderful glowing orb”. Similarly, considering that Warren Buffett’s company, Berkshire Hathaway, is largely composed of banking entities, his natural inclination would be to view Bitcoin and similar paradigms negatively. Thematically, Yusko was not implying that Warren Buffett or Jamie Dimon are bad actors or that they lack intelligence, but rather, their criticisms should be taken with a grain of salt considering their positioning. Much like a radio host opining on the advent of television, the displaced or disrupted parties in the shift of technology and society will always criticize the force of displacement or disruption. However, in spite of the negativity towards Bitcoin and cryptocurrency, Yusko framed the frequency of public criticism as a positive. “You know the quality of an idea by the quality and the vehemence of the opposition… If you have an idea and everybody disagrees, you are probably on to something”. In the inevitable event of further public condemnation of this technology, it only serves to support the notion that Bitcoin and cryptocurrency has already won. Why? Because the blockchain-era is already prominent enough to threaten the very institutions that criticize its inevitable rise towards mass adoption.
“The advancement of the human race follows a distinct pattern”
As we approach the eleventh year since Bitcoin arrived inconspicuously on the web, and the eleventh year that Bitcoin has, without fail, served as a decentralized trustnet for peer-to-peer exchange, we are ever closer to the critical mass moment for blockchain technology that Yusko hypothesizes will arrive in 2024. History has proved time and time again that patience, timing, and persistence eventually shatters the status-quo with unfathomed innovations. What did the steam engine, electricity, the telephone, television, the internet, the smartphone, and video streaming all have in common? Every single one of these innovations were questioned, criticized, painstakingly iterated upon, and each threatened to displace an old paradigm until the natural cycle of world around us enabled these innovative technologies to hit critical mass. The advancement of the human race follows a distinct pattern; the introduction of a new paradigm, the criticism by those threatened by it, the test of patience as the world evolves to meet it, and finally, the critical mass event that catapults humanity into a world that we could not have ever imagined. These chapters in human existence have changed the very fabric of our society, and blockchain technology, the age of the “trustnet”, is the next chapter.
To listen to the full podcast, check out the Evolvement Podcast here.