The world is on the cusp of a digital revolution, with innovation disrupting the way we do everything from using devices and tools to conducting financial transactions.
New asset classes
The digital economy is growing at a rapid rate all over the world. The current digital economy is characterized by the creation of new asset classes and the digitization of traditional assets. Emerging technologies, such as blockchain, artificial intelligence (AI), Internet of Things (IoT), and 3D printing are playing a pivotal base in supporting this growth.
New technologies feature assets that have the potential to dominate the global economy in the future. For example, blockchain contains virtual currencies and tokens that have grown in popularity dramatically in a short period of time.
Big players enter the game
Blockchain enables users to conduct transactions much safer and faster than traditional methods. Blockchain features have attracted several notable technology and financial companies, including IBM, Oracle, JP Morgan Chase, and Boeing. For example, IBM recently teamed up with Stronghold, a financial technology company, to launch a dollar-backed cryptocurrency called Stronghold USD. This virtual currency is an example of how consumer confidence can be used in a traditional asset (the US dollar fiat currency in this case) to support digital assets.
There are also examples where companies are combining two new technologies to provide solutions for the future. Space giant Boeing recently announced its collaboration with artificial intelligence company SparkCognition to develop blockchain traffic management solutions for unmanned aerial vehicles.
Asset coding is not limited to traditional assets such as currencies. The new market can leverage the intrinsic value of a variety of assets to provide security tokens. Blockchain can be a differentiating factor between security tokens and traditional securities. Using smart contracts on the blockchain eliminates the need for a middleman, thus reducing transportation costs. The usability of this blockchain has the potential to greatly influence the traditional banking system. It might also eliminate the need for money as a medium stock exchange, as all assets are liquid, immediately available, and divisible.
Automation and artificial intelligence have already made their mark in many markets. Trading algorithms have surpassed human traders. In the manufacturing sector, machines have taken over many jobs previously performed by humans.
The need for a new tire
In this rapidly changing economy, traditional models and methods of decision-making can no longer be relied upon. To keep up with new developments, such as DAO, AI, VR, P2P and M2M, it is imperative that we develop a new framework. In other words, we need to go beyond Munger’s mental models and focus on digital models, such as network theories and exponential growth models.
The digitization of our economy is happening at a fast pace. Over time, we will gain a clearer picture of the developments that will dominate this new Web 3.0 economy, but it is clear that this economic revolution is taking place on a global scale.