I noticed a funny thing about being the gray hair in the room these days. Many of the people I interact with have never experienced an economic downturn or a major tech disruption. I’m not an economist so I’ll leave the prognosticating about the economic downturn for those more qualified. However, I would recommend a deep dive at the bond and currency markets and plan accordingly. I suggest a perfect storm is brewing....
Let’s first go through a brief history of the most disruptive technology waves. In 1985, Microsoft released Windows in response to Apple's Macintosh GUI released in 1984. I was still in college. However, by the time I graduated every job I had involved extensive use of a personal computer. Most of us became “knowledge and information workers” as a result.
Nine years later saw Netscape Navigator usher in the World Wide Web which crushed the CD-ROM market, creating an unprecedented ecommerce gold rush (e.g. Amazon) which ultimately led to the famous dot com crash in 2000. However, a short four years later, we had Web2.0, dramatically increasing demand for greater broadband speeds for interactivity and file downloads 35% to over 50% in a year from 2004 to 2005.
In 2007, the first iPhone was released which launched the app economy. By 2012, over one billion people were using smartphones worldwide. Apps proliferated such as Uber which disrupted the delivery and cab hailing industry, AirBnB disrupted the hospitality industry, and of course social media took off, creating a new digital public square where everyone’s voice could be heard and amplified many times over, and a new advertising and commerce platform.
Then a little event happened between the first iPhone and one billion smartphone users: the 2008 financial crisis. That led to the birth of the first Bitcoin block, Genesis, mined in January 2009, in response to global financial bailouts. Source: The Times 03/Jan/2009 “Chancellor on brink of second bailout for banks.”
Since then we have seen BTC generate an upward return of 146,618% and that’s even with a 68% drawn down from the last year. Interestingly enough, in spite of this, bitcoin has been more stable than the Nasdaq over the last few months.
I posit that the innovation that will jumpstart the next massive disruption globally across fintech, legacy monetary systems, and traditional peer-to-peer computing will be the Bitcoin Lightning Network.
Let’s just look at one huge market segment of the chart below: electronic gaming.
Source: Is the Bitcoin Lightning Network for real?
In 2017, Christian Decker of Blockstream made the first full, secure Lightning payment. Five years later, only two companies are leveraging Lightning for games. However, the current gaming market is a whopping $196B, but only growing at 5% YOY. Future and exponential growth will be attributed to new innovation on Lightning (some of which are referenced in my last blogpost NFT’s are Nifty but a Bitcoin NFT is a Game Changer). I believe that up to 50% of the gaming market will be disrupted and moved to Bitcoin and Lightning by 2028.
Taken all together, it’s a perfect storm. When you consider that in times of severe financial stress on global markets, companies and industries have to innovate, reinvent the way they do business, or flail and perish. We are long over due for the next major disruption. I predict that within the next five years, over a billion people will be using bitcoin on the Lightning Network on a daily basis for applications we have not even dreamed of. Well maybe some have, like yours truly ;-).
All the best,