Technology is changing many things in the world.  A large number of people feel we are entering a massive **technological age** where we will see an absolute explosion in how society operates.  It will be interesting to see how different things are in 20 years.

Meanwhile, we see a lot of our established systems coming under attack.  At the same time, many long held concepts are starting to be questioned.  A lot of things that were taken for granted are now undergoing review.

For example, what will the world look like when many of the jobs are gone?  Some feel this is a preposterous idea.  However, Elon Musk is focusing upon building humanoid robots, ones that can be programed to handle many of the basic jobs we now occupy.  

This creates an entirely new mindset.  What happens if tens of millions of these are manufactured each year?  As we can see, over a decade that will end up being **hundreds of millions of robots**.  Considering they can go 24/7, it is possible each one replaces more than one employee.

We will have to see if this is achieved but it is worthy of note.  It also alters how we look at the building blocks of our economy.

<center>![image.png](https://images.hive.blog/DQmaeYoD35kX9iuwBBfQGruD6XGfbnLc6ERM1qJcAevJb6H/image.png)
[Source](http://economicsimplified.weebly.com/uploads/4/3/2/9/43295781/6335856_orig.jpg)</center>

### Technological Economics

What is **technological economics**?  It is not economics that focuses upon the technology sector.  Instead, it is economics that is based upon a technological system.  In short, the two combine as the foundation for our economic world.

Technology is penetrating all aspects of our world.  There are few sectors that are not confronted with this.  How this all unfolds has yet to be fully realized.  However, we can see how many of the old economic paradigms are becoming obsolete.

We cannot dispute the explosion in value of the technology companies over the last couple decades.  These entities were able to surpass the largest companies in the world and did so in a relatively short period of time.  It is also likely that they will keep growing at an accelerating rate as compared to the "traditional" companies.

Through these advancements, we were introduced to terms such as **network effect**.  This is now a valid economic principle, at least in our new economic age.  As we can also guess, part of the equation is incorporating less human labor.

Bitcoin is considered by many to be the first **Decentralized Autonomous Organization (DAO)**.  When we consider it, we truly have an automated system.  According to [Coingecko](https://www.coingecko.com/en/coins/bitcoin), Bitcoin has a $1 trillion valuation and processed over $50 billion in the past 24 hours.  Yet, it did all that without people.  They system is run by computers all over the world.  Naturally, humans have to initiate the transactions, for the most part although many transactions are automated.

The value of the Bitcoin Network, according to many, is the computational power that goes into it.  This is something that people feel provides its intrinsic value.  Since energy is required, we cannot say it is worth nothing.  While this is up for dispute, it does provide some fundamental backing.  It also bases things on an entirely new economic model.



### Technological Abundance

We often discuss the **Age of Abundance**.  This is a concept that people still have a difficult time grasping.  Due to decades of operating in an economic system that is based upon scarcity, we know this transition can be hard.

Nevertheless, economics derived from technology are not scarce.  If we look at the core foundation, we can see how rapidly things grow.

For the last couple decades, the global economic growth rate slowed a great deal.  We are now looking at 2%-3% being considered acceptable.  Honestly, this is anemic and evidence that something is truly wrong with the present system.  Nevertheless, it does give us the baseline for the conversation.

Why are returns in **cryptocurrency** so much higher?  How can they being consistently generating returns that are, quite frankly, absurd?

The answer lies in the fact that all of this is **based upon technology**.  For this reason, it is best to look at technological growth rates.  Here we quickly see that the old concept of 2% or 3% is quickly surpassed.

Let us look at a few charts:

Data Growth Rates:

<center>![image.png](https://images.hive.blog/DQmcsqrBHPfB6sj2YyoQPumjpN8TtjaEEBgY6dUovgdyd8D/image.png)
[Source](https://tse2.mm.bing.net/th?id=OIP.tCJ87ZoZcbT7AkfjQyoCYgHaGV)</center>

Processor Clock Speeds:

<center>![image.png](https://images.hive.blog/DQmVhjLghbHdrcmmh1Fbs7ucHUHET3dQfS9b9XGndQqWV8G/image.png)
[Source](http://www.singularity.com/charts/page61.html)</center>

Total Bits Shipped:

<center>![image.png](https://images.hive.blog/DQmSKKo3Eg1TPzwvjxXADnUe5jE5Df5t2Praxjc6tHQ7gQK/image.png)
[Source](https://www.kurzweilai.net/images/total_bits_shipped.jpg)</center>

Granted, some of these charts are a bit out of date.  Nevertheless, they do exemplify how the growth rates far surpass what was mentioned above.  When the basic infrastructure is growing at 50%-100% annually, that is a much different baseline to operate from.

This feeds into the **global abundance** that we are embarking upon.  As the world becomes more digitized, everything builds off this.  We are going to see the tentacles of technology penetrate most everything.

### Declining Costs

The other major factor in all of this is that, in spite of the massive growth, costs plummet.  We see similar charts but in the opposite direction when we add in the cost component.  Hence, we have a **cost per performance** variable that is astonishing.

Let us again look at a few.

Average Transistor Price:

<center>![image.png](https://images.hive.blog/DQmYuZfzTLw97YW7veUQyrxvafjizVm7kGwAooAtCxnSFdU/image.png)
[source](https://www.kurzweilai.net/images/average_transistor_price.jpg)</center>

Computer Memory and Storage:

<center>![image.png](https://images.hive.blog/DQmdb7PAqrXN7tvdtgerGRFzArV956fNL5RrvLmLnqW4L8j/image.png)
[Source](https://cdn.arstechnica.net/wp-content/uploads/sites/3/2016/10/Memory-storage-prices-JC-McCallum-1.jpg)</center>

Smartphone Costs:

<center>![image.png](https://images.hive.blog/DQmdh2WUh2uMvik1PKP8NR18toW2iBMDNC1VqmLndMALhmN/image.png)
[Source](![image.png](https://images.hive.blog/DQmdh2WUh2uMvik1PKP8NR18toW2iBMDNC1VqmLndMALhmN/image.png))</center>

While some of these can level off, like the cost of a smartphone, that is still a lot less than the cost of laptops or personal computers.  We saw a paradigm shift in personal computing with the introduction of this device.  Fortunately, even as the smartphone levels out, there will be new technologies that follow the same curve.

Essentially, in an economy based upon technology, we can easily see how the foundation is **get more for less**.  Every few years, the amount available for the same money grows significantly.  When we apply this to a large economic system, the rates of growth become evident.

### Cryptocurrency Immersed In This

Cryptocurrency carries a monetary component.  This is evidenced in the fact the data (tokens transferred) carry value to them.  There is, however, another important factor to this.

We know that **cryptocurrency**, itself, is a technology.  It cannot be separated from what is being described here.  We are fully immersed in technology with each iteration of cryptocurrency development.  While we are seeing complex systems forming, much of it is derived, at the core level, from the coding that is being done.  We cannot separate the two.

For example, as the costs of operating networks drop, we see an increase in the ability to process more transactions.  This is keeping in line with the charts above.  

Performance increases while costs decrease.

Another factor is we know long-term energy costs are coming down.  This is not noticeable now with the cyclical run in energy yet the secular trend is clear.

<center>![image.png](https://images.hive.blog/DQmUp4V8AJR3NyRVxUtK8GERa4rhF3xXZcxuLjiNS7sj1sp/image.png)
[Source](https://upload.wikimedia.org/wikipedia/commons/thumb/a/af/20201019_Levelized_Cost_of_Energy_%28LCOE%2C_Lazard%29_-_renewable_energy.svg/285px-20201019_Levelized_Cost_of_Energy_%28LCOE%2C_Lazard%29_-_renewable_energy.svg.png)</center>

When we look at the pace with **renewable energy**, we see an even starker picture.

<center>![image.png](https://images.hive.blog/DQmUsVk2E74TXxTuWHU75sunt7g9wGxTxrdg6fSkJ3HktHa/image.png)
[Source](https://upload.wikimedia.org/wikipedia/commons/thumb/1/12/2010-_Cost_of_renewable_energy_-_IRENA.svg/1200px-2010-_Cost_of_renewable_energy_-_IRENA.svg.png)</center>

While there are, admittedly, some challenges that renewables are encountering at the moment, we cannot deny that, overall, this is the path we are on.  Over the next couple decades, challenges will be overcome with major breakthroughs being made.  Ultimately, the cost of energy will keep pushing toward the zero marginal cost level.  This is what technology does.

A recent example is El Salvador and the idea of **Volcanic Mining**.  Here we see the energy that is produced by a volcano being used to mine Bitcoin.  So, not only is the system nearly automated, the energy powering the rigs is coming out of the ground for free.  Of course, there are costs associated with capturing and converting the energy to electricity.  Nevertheless, we can presume the energy will be abundant for a long time and that costs are going to keep decreasing over time.

This is all forming the basis of our new economy.  It is one that is truly based upon technology.  This brings in a completely new set of economic models that were never considered before.  

When we understand **how abundance is unfolding**, we can see how cryptocurrency perfectly captures this.  Increases in automation, computation, and bandwidth are growing at extreme rates.  This is why we can expect the returns from economic input to far exceed what we see now.  

This is going to be clear in a decade or so.  However, those who can see it now are able to benefit greatly.  Overcoming **paradigm paralysis** is vital since we are operating under an entirely new economic system.  The old is still with us yet that is just a timing thing.  Within two decades, much of that will be phased out.  However, we need to be forewarned, there will be a lot of upheaval in the meantime.  

A conversion of this scale is not going to be without pitfalls.  

The road will be much easier as more people embrace cryptocurrency and truly start to incorporate that into their lives.


___
If you found this article informative, please give an upvote and rehive.



https://images.hive.blog/0x0/https://files.peakd.com/file/peakd-hive/doze/MkkDNhyH-2020_04_13_16_57_48.gif

gif by @doze

![screen_vision2025_1.png](https://images.hive.blog/DQmXEv6MvKTCurBzSdbKjWzFadJwfJfJfmA2We9EwD5q5Vb/screen_vision2025_1.png)

logo by @st8z

Posted Using [LeoFinance <sup>Beta</sup>](https://leofinance.io/@taskmaster4450/cryptocurrency-economics-based-upon-technology)