It’s easy to look out across a sea of scams (‘allegedly’), hacks, and shitcoins and think crypto is pointless (or at least one giant casino).

The truth is that once you understand the underlying blockchain tech, and where it’s going, you realize crypto, or what should actually be called ‘programmable money,’ solves a bunch of real business problems. You realize it’s unavoidable that it’s going to change every business globally. 

While there’s a lot of rhetoric and fluffy language (aka overly complicated jargon and ‘thoughtspeak’), there’s actually a pretty simple explanation for how and why this is happening, and why it’ll have the same impact on business as say the internet or AI. 

OK, so how? If there’s one thing that’s true about the march of tech, it’s that transaction costs go down and things get more efficient over-time; that’s just how markets work. 

Today, money is ‘dumb.’ It has no awareness of the context in which it’s being transacted. When you want to move value in, out, or around your business, you need intermediaries (banks, payment processors, lawyers) to make sure money is secure & ends up in the right place.

That’s inefficient and adds very tangible transaction costs. Processing payments? Paying out suppliers or employees? There’s a lineup of banks, processors, FX providers involved. Stripe takes between 2.9 to as much as 5% of GSV (~10-20% of revenues if you’re a marketplace!) for the privilege. 

There are some other less tangible transaction costs as well. The more ‘context’ you give to money (e.g. creating a contract or a security), the more complex and costly it becomes. You need a bunch of lawyers to draft contracts & argue over them. You need employees to run spreadsheets. You need a whole Securities Act to make sure no-one gets scammed by dubious financial instruments. You need all these added costs just to operate your business and build trust between parties to a transaction.

Blockchain tech makes money smart. The simplest way to think about blockchain is a shared database that gives every user & business neutral ground to transact on and share data across. Intermediaries do less and programmable money does more.

That’s way more efficient. In fact, transacting directly in this way creates radical efficiency gains. Hugely reduced intermediary fees & FX fees, no 2-3 business days for funds to settle. It’s literally a direct, instantaneous & trusted flow of value between your business and anyone globally over the internet.

Being able to program money (or any other imaginable store of value) is also game-changing. Want to pay your top contributors $10k in 48 months if they’re active every quarter? Easy. Want to create incentives that allow thousands of globally distributed actors or businesses to share in the upside of a network proportionate to the value they contribute? Also easy (and previously impossible). 

Cost efficiency aside, being able to flow value directly between a business and its users without any intermediaries is the ultimate barrier removal. Like the early internet, we’re just scratching the surface on the types of innovation this will create, and the new ways to engage that will result. 

Today, a lot of applications of blockchain tech you’ll read about miss the mark (or worse). You’ll hear a lot of people bemoaning lack of scalability, lack of privacy, unusable interfaces. These are all the same sorts of tactical and unimaginative criticism that you might have leveled at the early internet or smartphones before high-speed data was widely available. The tech is getting radically better, the user experience is leveling up. But the underlying piping is radically more efficient.

In fact, now these capabilities are not just possible, but increasingly abstracted, frictionless, and encrypted (Village Labs is implementing them for businesses today) business adoption is happening rapidly and will continue to snowball into an avalanche in coming years. Faced with paying more, or paying less for the same or better capabilities, business will always choose efficiency. 

If you’re a business or marketplace looking to build closer user relationships, grow retention, and cut costs, reach out. Our APIs & tech make programmable money easy to implement across compensation, incentives, & payments. The tech’s totally abstracted from a user perspective, and easy to integrate in a couple of hours. We’re building businesses, not casinos.