Anthony Pompliano, a longtime Bitcoin bull, co-founder of Morgan Creek Digital, and host of the Off The Chain crypto podcast, recently published an interesting blog post titled, “Crypto is for the machines, not the humans.”
His blog post was published two days after his trending tweet, where he said the reason people have a hard time understanding crypto is because crypto assets are being built for machines, not humans.
The reason it is so hard for so many humans to understand crypto assets is because these assets are not for us.
They are being built for the machines.
— Pomp 🌪 (@APompliano) February 23, 2019
Physical Assets Must Be Digitized
According to Pomp, for thousands of years physical assets, whether they’re stocks, contracts, or money, have been useful in the analog world but have zero utility in a completely digitized world.
Explaining the type of world he describes as “digitized,” Pomp elucidated that it’s an interconnected world without borders or governments.
The digital world functions as one single global nation that is interconnected with billions of people around the world. This high degree of connectivity allows for the efficient transmission of information and value.
Pomp then asks his audience, what does all this have to do with Bitcoin and crypto assets?
The answer:
“The new digital world is trying to use old technology (physical assets or their electronic representations), but that approach won’t scale. We already see issues with everything from settlement times to the inability to make micro-transactions… The digital world needs digitally native assets.”
Bitcoin (BTC): The Perfect Solution to a Digital World
According to Pomp, Bitcoin (BTC), the largest decentralized crypto asset, is the perfect solution for a digital world because it is not controlled by any one single group, it’s fully transparent and predictable, it’s highly divisible, and most importantly it’s compatible with machines.
As put by Pomp in his post:
“As machine-to-machine transactions increase globally, the need for faster settlement times, micro-transactions, and low fees will become more apparent. Bitcoin can be sent to anyone in the world, regardless of geographic location, within seconds, at almost no cost. The machines can’t do that with USD or any other fiat currency, so they’re going to opt to use the digital currency that suits their needs.”
Tokenized Securities Are Needed Too
Apart from the digitized world needing a highly compatible currency such as Bitcoin, other physical assets such as stocks and securities must be digitized as well.
Pomp notes that traditionally stocks have not been available in fractional shares, and they are difficult to transact across borders, while also lacking transparency in regards to their underlying value. This type of ownership just isn’t cut out for the digitized world, which is why we need a new type of digitally native ownership.
Pomp’s solution is a “smart security” (tokenized security) which can be interconnected across the world, transact more efficiently, and have better transparency in terms of its value.
Moreover, Pomp then explains an interesting scenario in which ownership and value can be generated on different levels, and on a far grander scale.
“The securities are highly divisible and can empower an entirely new world of ownership. Rather than simply owning the equity in a large corporation like Apple, the machines will be able to offer ownership in individual divisions of a company, individual product lines, or even claims on cash flow of a single revenue stream.”
All in all, Pomp envisions a future dominated by machines and feels that it’s our role to facilitate their role in improving the world as much as we possibly can.
What do you think about Pomp’s outlook on the future and how digital assets will play a role? Will Bitcoin (BTC) be the dominant currency used by machines? Let us know what you think in the comment section below.
