When do you think this will actually disrupt finance or RE in a major way? Seems like little discussed macro trend should be deflationary cutting out many middlemen on transactions?
Looks like the right questions... As far as timing, and the when question, I'd add in a question related to... will it disrupt finance or real estate... more ?
The origins of the cryptocurrency concept... are related to the deflationary question, as it was the purpose in creating the idea of crypto, to present it as a response to the wrongful monopoly being sustained in banking. When computers started upending competition in every other market... that happened in investment banking, too, but only in the sense that full service brokers became irrelevant... and we got "discount" brokers in the mix... but what we didn't get was the obviously needed change in the limit, where computers simply eliminate the need for any middleman at all in simple transaction like those involved in stocks trading hands. Banks used to have a more legitimate purpose... but my computer can keep a simple ledger just as easily as theirs... so why should I pay them anything just to manage transfers to match my transactions and keep the balance in my checkbook ? Don't need them. The only reason they still exist, after the 2008 debacle... is that they've conspired to ensure the law requires they exist. The rest, is that they've responded to becoming unnecessary... by taking a larger bite, rather than a smaller bite, out of the things they do touch. The original internet IPO was Spring Street Brewing... sold directly to the public. But, then, the SEC shut that down. The economy dying in result... had them relent, slowly, in allowing "crowd funding" concepts to exist... and slowly expand. Investment banking... the venture capital world... exist as bottlenecks throttling the economy and limiting business ownership to "some of the people" only because the law is written to prevent "protect" regular people by preventing them from participating.
Crypto challenges other aspects of bankers monopoly powers by addressing not just computers used in enabling point to point exchange and tracking of transactions... but the basic function of money... which is still a monopoly owned by banks.
You'd think it would be broadly deflationary to cut out the middle men... but if the middlemen have been throttling the economy in order to charge increasingly exorbitant rents and tolls... the deflation will likely be limited to the impact on the bankers themselves, when they are cut out of participation... while everyone else will see a benefit not just in lowered transaction costs, but also in the removal of limits on the throttle... giving accelerations in transactions, and in overall economic activity... mostly by easing restriction on investment.
The impact on real estate... of enabling the use of RE as the asset to back up an asset backed and focused "coin" or token ? If that works, it should obviate a lot of throttle limits in real estate markets... when transactions don't have to be all or none... and millions at a pop ?
As an investor... in an economy facing the risks and challenges that ours does now ? Peak bubble typically means cashing out, and limiting forward investment to businesses likely to sustain cash flow and retain value in a market implosion. If you can find a publicly traded mortuary, death is predictable enough, and unavoidable in the expenses imposed by it. But, most of those things, by now, are privately held... things worth owning aren't offered to the public much, any more. Otherwise, it used to be grocery stores and food stocks, but that was before they were all as leveraged as they are now... so... ? I'm not liking any of that now, given failure of the banks could wipe out the entire market for stocks... so, avoid those risks...
That leaves the long term fall backs: First, gold and silver, as an portable inflation hedge. Second, high end art as a timeless store of value that's portable. Third, real estate... Not that any of those will "hold their value" in a market debacle... the point is they'll not disappear, as stock market holdings and currency holdings might.
Whatever else happens... gold, and land won't cease to exist... still allowing you to run away from trouble, and come back after it has passed.
Real estate is broad in focus, too... so, it can also mean the ability to produce food, if you buy farms, and people will always want to eat. It might mean access to water, and shelter for the people you love. And, it can mean income, if you're a landlord, and there are still people with an ability to pay rents.
The most interesting part of that... is that it makes it possible not only to back a "currency" with solid values in assets... it also makes it possible to have a "currency" that generates income directly, without having the need for a banker as a middle man to broker loans and pay interest to depositors.
Along with that... it means both the innovators in the market and the investors who are looking for innovators to invest with... might discover new pathways to enable secured or asset backed investments... that facilitate economic growth... without banks pirating profits and restricting participation in deals that can be done without them... The same idea, given the risks in failure imposed by the clock, with interest payments due on loans, obviates those risks in business... and the parallel risks in investment tied to business failures... by eliminating the source of those risks.... that come from interest payments, loan repayments, and the banks participation.
An asset backed coin or token, might approach something like a hybrid between a store of value, a loan, an equity investment, and direct ownership of the assets... which hybrid seems it is easily made possible by the concept... but that still depending on the law allowing it. Creating liquidity in real estate markets... that doesn't fully depend on a purchase and sale of the property... seems likely, to me, to cushion the market carnage for those participating, in part by distributing interest in the coins/tokens between investors with disparate interests and focus... who are not all and only concerned with the real estate angles, rather than "store of value" or other utility able to be made accessible using the concept.
Hope you find that interesting... I decided to use yours to write about it, and find out what I think in the process.
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