why digital assets?
Etherbridge invests in the value of information and trust. History shows us that when innovations change how information is disseminated and trust is coordinated, it is worth paying attention. The most recent example of innovation around information is that of the internet, a protocol designed for the sharing of information.
The last time we saw a change in how trust is coordinated was the invention of double-entry bookkeeping and the joint-stock venture, these two innovations have resulted in the $80 trillion stock market we have today. Blockchain and cryptoassets represent a significant improvement in the way we share knowledge and coordinate trust.
Why Digital Assets Have Value
Cryptoassets, like shares, present a way to coordinate resources to produce something of value. They are scarce and irreplaceable and act as the glue that holds together a distributed triple entry accounting system that disintermediates money, accounting, governance and third-party verification into a single software-based product.
This software is open source and is used to build superior forms of coordination mechanisms. Its code presents rules that replace the need for trusted parties in transactions. It can vastly assist in streamlining the coordination of resources, eliminating immense amounts of value extraction and sharing value more equitably to all stakeholders.
Demand exists for the software and the underlying cryptoassets that coordinate them as they provide absolute assurances in the accounting of value transfers. This marks a 10x improvement of our current trust infrastructure.
Money is technology. It was created to solve the limitations of barter. Over time money has had many forms, ranging from shells, beads, metals, paper backed by metals and paper backed by nothing. At the end of the day money is what we collectively decide it is, it is a social construct.
Bitcoin is the worlds first internet native money. It was built for the internet and resembles other assets like gold. It is a commodity by design. It is portable, divisible, durable, difficult to counterfeit, scarce and most importantly it’s apolitical.
Bitcoin is backed by the demand for an apolitical form of money that may or may not become one of the worlds most valuable safe-haven assets.
With unprecedented monetary expansion, an economic environment prime for inflation and trust in institutions at all time lows it makes sense having exposure to hard money.
Bitcoin is hard money with technological advantages.
Ethereum is similar to bitcoin in that validators or miners provide transacting parties with guarantees that transactions will be processed, executed and settled. Ethereum however, has additional expressiveness in that it can provide these same guarantees over basic conditional agreements. If this, then that. When this, then that. These are known as smart contracts.
Smart contracts can be used to create trust
minimised services. Where users of the service can interact peer to peer without requiring a third-party intermediary to enforce and manufacture trust. Ethereum is essentially a vending machine for the creation, management and settlement of trust minimised financial services that replace the need for intermediaries in financial transactions.
Ethereum is currently a water-like commodity. After Ethereum upgrades to ETH 2.0, it will become a triple point asset. As an investment its unlike anything we have seen before as it represents a blend of different characteristics of capital, commodity and store of value assets.
In short, ETH can produce a yield, it will be consumed when used to pay for transactions, it can also be used as collateral, and it has a low issuance rate.