Road 2 Web 3
Daniel de Lophem
SwissBorg Launchpad Product Manager
Wars and Conflicts
The wars and conflicts of the past define the world we live in today... Cultures, borders, and money have all been impacted by history. Money used to be mainly backed and made by scarce commodities such as gold. This meant governments could only create as much money as the gold in their reserves.
For the West, this changed in 1971 when the then-American president, Nixon, claimed, "I have directed Secretary Connally to temporarily suspend the convertibility of the dollar into gold.” Only, nothing about this was temporary.
And so the fiat monetary system came to be, created to finance decades of war and an over-saturated labour market. Unlike gold which derives most of its value from scarcity and utility - fiat derives its value purely from the promises of those who print it. It is backed by nothing and based on the promise of debt.
The debt issue
In the fiat system, the loans given out by banks don't come from their own reserves anymore - they are created virtually as new money.
It is only when a loan is repaid that the virtually created money materialises into real economic output. This offsets the price of issuing debt for Lenders, as they no longer need to answer the risk of default with their own money. And so, quite predictably, the result has been ever-growing debt bubbles... and bursts.
Since 1971, debt cycles have continued to unfold - each crisis bigger than the previous, each time more money printed than before. When debt can be created without limit, the temptation of using it to stimulate bad economies is simply too big.
Limits of the monetary system
Over and over again, central banks have arbitrarily lowered their interest rates to make loans cheap. People and businesses then start borrowing again, and the illusion of having money starts to kick in - their spending increases, so the economy grows, at least on paper.
Yet all this growth is based on money that doesn't exist; it's still just debt. And so as the cycle compounds, the borrower's and lender's greed balloons and capital markets come to fly ever closer to the sun... until they burn and we all fall again. Each time deeper and with more debt required to get us back out again. But not everyone gets burned the same way; the ones who end up hurt by this death spiral of over-leveraged liabilities & monetary debasement are, as always, those who had the least, to begin with. Families who lose their homes and people who can't afford their medical bills are those who suffer the most. In the fiat system, the risk of debt does not lie with the banks that issue it freely but with the individuals who need to pay it with everything they have.
Since 1971, the dollar has lost over 90% of its value against gold.
A Better Future is Around the Corner
If we use the new technologies to create prosperity and wealth without the disincentivised and misinformed intervention of central planners, we can put the power of true financial ownership and freedom back in the hands of individuals. We can create & secure financial stability far from an ever-expanding money supply. As we enter the exponential era of Web3, we can separate money from the state.
Web3 is the entire system of value and money shaping the biggest and most impactful wealth redistribution of our age. The future of economic progress will shift away from scarce natural resources; it will originate from the exponential growth in technological innovations.
Web3 provides the framework upon which new avenues of wealth can be paved.
Decentralised infrastructure such as blockchains will allow value to be exchanged freely at the speed of information. Bank accounts will no longer be a means for economic exclusion. Borders and firewalls will no longer be a barrier to trade, and financial censorship will no longer be a tool for oppression.
Web3 technology separates individual authority from the computational power necessary to enforce it. It is inherently fair and objective - eliminating abuses of power and bringing forward a system that provides equal opportunity for inclusion, freedom, and ownership.
Through Web3, we will be able to bring forward real creator economies where individuals worldwide are free to choose to participate in a global work market. Information asymmetries causing unequal working conditions will fade, and individuals will be rewarded meritocratically according to the quality and the value of their work.
The power of data will finally be placed back in the hands of the individuals that produce it. They can decide if and how to use it, what to keep private, what to monetise, and under which conditions. Web3 will break the cycle of megacorporations farming our data and will be able to provide a legitimate and merited source of income to all people.
Web3, beyond the trend
The world's financial system can run on a robust common denominator that people will choose freely. The internet of the future will enable a free market of currencies from which the strongest will emerge naturally as the reserve currency, as it has occurred since the dawn of time. From livestock to seashells to silver and gold, value will be exchanged without constraint, and people will save in currencies whose supply can not be inflated arbitrarily by someone else’s authority. Money will be hard, sound and fair as it should be.
Based on open and collaborative values, Web3 will open the doors to prosperity for entire generations. Web 3 is the democratisation of wealth!
The routes are being built; which road are you choosing?