The future of Finance & Creativity — Conjoint, Conjunct!
How is Crypto & creativity correlated?
Why no connection, no linkages, no literacy will determine the future but Creativity & knowledge will?
How has the world of finance changed after nearly half a century?
Creativity is seeing what others see and thinking what no one else ever thought.” — Albert Einstein
If one reads this sentence once, one will believe it in essence has no meaning, no sense, no explanation, and is oxymoronic.
As one reads it again and then again, one realizes that what Einstein meant is Creativity simply is putting abstract into perspective and bringing it out in a manner that has shape, form & ultimate usage to humanity.
Humans, all humans are born creative as creativity is the guardian of Survival. As human life takes birth, survival instincts are most dominant irrespective of color, caste, creed, religion, geography, DNA, etc., and thus creativity is at its peak.
As the child progresses, the need, the urge, the compulsion of the parents, society, culture/religion to fit in increases multifold, and creativity gets eventually adrift, forgotten, or loses its prowess in cognitive hierarchy lying low in abeyance.
The biggest setback to creativity in the human race emerged with the arrival of the Industrial Revolution in the mid-18th century. The education system was modified to produce workers and then managers, the same managers to manage workers and enhance production using language as a basic tool for communication, and mathematics to ensure a basic understanding of production to remain intact.
Universally post Industrial revolution, the top priority of academia has been to focus on language and mathematics, then humanities and then arts. Drama & Dance (part of arts) forms the lowest of the pyramid, despite both being essential for expression & enabling the young pupil to access their own creative ability.
It’s interesting that despite Language & Mathematics being at the top in the education hierarchy, Mathematics remains one of the most hated subjects in this world. Language on other hand, the majority get proficient with their mother tongue and the one where the necessity arises, unlike the language which is being taught in schools & colleges.
Today’s note however does not revolve around Mathematics, education, or, Language and neither I am advocating the fact that Mathematics or language should not be taught in the school curriculum.
Despite what I believe or do not believe, the most successful (success in the current context is defined as power & money) people on this planet include sports personalities, actors, religious heads, politicians, & entrepreneurs (ability to raise money — storytelling, drama & risk-taking).
Rest educated people mostly get in the rat race of hierarchy, desiring to be at the helm of corporate slavery.
Again nothing wrong with that aspect, if one comes from a humble background and has limited options and opportunities to get out of the current situation of poverty or family being deep-rooted into debt or economic turmoil. Hence one is not being judgmental here and one is only advocating that Education which is simply synonymous with Literacy should be evolved as Literacy + Creativity.
Creativity can be in any field, in any situation, and in solving any problem.
The big question arises, when one says that education literally can be monetized, with mass production of goods & services (induced by the industrial revolution) that can be sold domestically or globally depending on economies of scale and efficiencies in transportation costs (obviously keeping demand & supply quotient intact).
However, when it comes to monetizing creativity, it is difficult. The only logical way is to be part of an ad agency or movie or film production, where the horde vying to enter and make it big is humongous however success or percentage of winners making big is smaller. Also one has challenges of nepotism making an outsider being outcasted with limited options to succeed.
What’s the solution then?
1. Start believing that Creativity can be monetized and it is in everyone. One assumes that Creativity is complicated and one gets entrapped in the ghost of thoughts & improvisation without even giving a chance to be exposed to the world.
2. Decentralized Finance with Web 3.
The first point is easy to comprehend, thus probing Point 2.
But before we move ahead, let’s first understand what Web 3 is.
Web 1.0 was an era of the earliest evolution of the World Wide Web (www), where the Web pages were joined by hyperlinks having static pages. In layman’s terms, the World Wide Web was not interactive and was “READ ONLY”.
Then came Web 2.0 which one is currently using, having more user-generated content, interactive, audio, video, and 3D at times. In Simple words, this version allowed users to actively participate in the experience rather than just acting as passive viewers to take in information.
What is arriving now and what is the future of www is Web 3.0.
Web 3.0 is an interface on the internet where the individuals or groups of individuals govern themselves and use the section of the internet as they wish to.
It is a record-keeping system that will not be mediated by companies like Google, Apple, Microsoft, etc.
Web 3.0 doesn’t require “permission,” which means that central authorities don’t get to decide who gets to access what services, nor does it require “trust” approvals from any such authorities. Web 3.0, technically protects user privacy in case of usage or transaction, and an intermediary isn’t necessary for virtual transactions to occur between two or more parties.
The key in Web 3.0 is Decentralization or a direct connection between the developers’ content and the user with intermediary organizations not able to monetize the personal data of the user.
In other words, Web 3 enables C2C- Creator to Consumer (of Content).
One of the most important aspects of Web 3 is Decentralized finance (DeFi). It’s interesting and it’s a creator’s paradise.
To understand this let’s start from the basics.
Cryptocurrency: A cryptocurrency, is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it. In essence, it has no underlying backing.
Blockchain: The movement of crypto, units, or parts monitored and organized by a peer-to-peer network is called a Blockchain. In essence, Blockchain means keeping track in the digital world of every coin or every unit of currency but not by an agency or an authority instead of by any participant.
Crypto Mining: The process that verifies and adds new transactions to the Blockchain for a cryptocurrency that uses the proof-of-work (PoW) method. In simple words, recording digital transactions & book-keeping of digital currency.
What does a Crypto miner get in return? The miner wins some amount of the currency and/or transaction fees.
Let’s come back to DeFi and understand what is DeFi?
DeFi is a mechanism that provides secured distributed ledgers as in the case of crypto, however, in DeFi the web interface itself can be firewalled & secured with access only to authorized users.
In the physical world analogy, imagine a man giving a currency note denominated by a specific number to another with only two of them having knowledge about it and another individual recording the movement of a specific numbered note from one to another (the bookkeeper records the transactions and tracks the movement of same note exchanged).
Similarly in DeFi, one person gives digital currency to another, with miners and Blockchain keeping a track of it with no one knowing about it.
Now comes the bigger question: how does it support the Creator’s Economy?
Any creative Work in a digital world (Intangible) can be copied and is difficult to monetize and thus comes the concept of Tokenization.
Tokens — Tokens represent fungible and tradable assets or utilities that reside on a Blockchain.
Every creation in a digital world (intangible) like a song, software, music, digital painting, Slogan, idea, set of revelations, practically anything can be tokenized. Thus anyone using any of the intangible assets on the Web can be tracked and thus paid for by the user, & earned by the creator.
Now comes the interesting part. Little long, just stay with me here.
What if the creator’s creation is incomplete and still one wishes to use it. Yes, tokens can be created against incomplete, partially complete, or any kind of creation as long as it’s digital and marketable.
The more interesting part is the finance around it.
Let’s understand using an example, a person creates a stock market crash prediction software, unfortunately, he gets unwell and needs some money urgently, which he has invested in developing the software, beyond his skills.
He has two options, he sells part of ownership in his Prediction software, or second — raise debt against it for temporary financial needs.
How would the work be assessed and a valuation be put against it?
In DeFi, progress on gaming software could be assessed by a decentralized assessment system that pools the expertise of people in the domain to give the unfinished creation an appraisal guided by the intrinsic value of the Software developed to date.
This inherent value is used as the input for the collateralization calculation in case of debt, and thus the loan value is ascertained and advanced basis collateralization calculation. Or the inherent value can be used for selling part or full equity in the project or software.
In the case of loans, Smart contracts are created that can register assets on-chain, issue NFTs, evaluate assets and manage both collateralization and liquidation in case of default.
In case there are no individuals to give away loans then the loan amount can be given by a decentralized autonomous organization (DAO) that earns money from transaction fees and bandwidth allocation payments of the underlying Blockchain.
If the person pays the loan back on time, the credit rating enhances, and with work progressing well, he can further raise debt depending on the credit rating and valuation as it happens in the tangible world.
It’s interesting that ~ 85% of the total valuation of S&P 500 presently is commanded by Intangibles.
Siddhartha Rastogi, Says,
DeFi, or Decentralized Finance presents an opportunity to every human on this planet to use their creative juices as provided by providence to enhance their & humanity’s well-being.
Connect with me @
Twitter: @beingsworld
Instagram: @beingsworld
Facebook: https://www.facebook.com/siddhartha.rastogi
Linkedin: https://www.linkedin.com/in/siddhartharastogi
Medium.com: https://siddhartharastogi.medium.com
