The outbreak of COVID-19 is creating hardship and tragedy for millions of people around the globe, and my deepest condolences are with everyone navigating such shaky waters. It’s impossible to quantify the myriad personal and business tragedies transpiring around the world, and they will inevitably affect our society as a whole long after this has passed. From our daily routines, to our relationship with work, to what we choose to do in our free time, COVID-19 has undoubtedly changed our world forever.
The digitization of our lives is about to speed up dramatically, and these changes are the result of an acceleration of trends that have existed since “the world’s first popular internet browser” was released by Mosaic in 1993. You can find evidence of these trends in retail, eCommerce, education, internet infrastructure, and perhaps most importantly, the financial system that underpins our global economy. The last generation’s disruptions will be subtext under the chapters of this newfound acceleration.
References to the retail apocalypse are already commonplace. The US has more retail square footage than any other country in the world, measuring in at 23 square feet per capita, with European meccas like the UK, France, and Switzerland under a fractional 5 feet (1). What will happen when these stores reopen?
Or take the already ubiquitous world of online shopping. In two decades, eCommerce has grown approximately 17% per year, now representing $3.46 trillion in sales. That’s 16.4.% out of a global retail market of $21 trillion dollars (2). Buying habits have been forcefully changed, and it’s easy to estimate that at a minimum, eCommerce will double its previous growth rate. The market effects of a spike this steep are enormous. Shopping malls, small storefronts, and the landlords or banks that finance them will be shaken to their core. Assuming the free market is allowed to function, we will see a transition of labor, real estate, and financing as people optimize the use of those dislocated resources.
COVID-19 has upended education as well. The online education market is growing 9% per year and is currently at $187 billion globally (3). Since the closure of school facilities, I have seen my 9-year-old daughter continue to go to class each day while at home. Her school rapidly deployed Google Classroom, and her education hasn’t suffered whatsoever. It has been remarkable to watch her class of third graders participate in video calls with their teacher and deliver their homework entirely online.
Born out of 2008’s financial crisis, early Bitcoin was trading at a mere 6 cents per BTC. 10 years later and that figure is north of $9,000 (4). Hundreds of private currencies have crashed and burned in the years since due to a lack of legitimate utility, but the survivors will grow strong and combine with BTC to create a new financial system.
This acceleration of cryptocurrency adoption and the rise of distributed ledgers, decentralized applications, and digital identity technologies will result in a fundamental restructuring of our internet and will bring transparency and monetary value to previously nebulous sectors of our internet model, most tangibly in the world of user data.
Instead of an internet dominated by a few mega-companies owning and profiting from our personal data, Web 3.0 technologies will enable an opt-in, permission-based web economy that hands data ownership back to users. This will have vast implications in how data is collected and monetized and will support the growth of cryptocurrencies that enable value exchange. The undercurrents of revolt against data exploitation and profligate money printing are growing fast and with each passing year Web 2.0 and fiat government currencies become less justifiable.
And there has never been more evidence for the financial change needed than right now: the prior $2 trillion stimulus bill, and potential second $3 trillion stimulus bill coming, engulfs the $800 billion TARP bailout of 2008 in both scope and impact. With the Federal Reserve & Central Banks around the world committed to printing unlimited money, their actions continue to make the case for a private, digital, transparent, and, ultimately, trustworthy currency even stronger. A dollar isn’t worth much when the only limit of its supply is controlled by a tiny group of central banks and politicians.
Our financial system has evolved into a crony capitalist system where the biggest corporations and institutions can borrow cheap money, use it to purchase their own stocks, give a boost to their market value, and then avoid the consequences by getting bailed out when the system inevitably falters.
Retail and media were the most disrupted by the first two decades of the internet. The next wave of societal change will be driven by blockchain, cryptocurrency, and decentralized finance, which will disrupt our anachronistic financial system that relies on central banking and upgrade our internet to a more transparent, permission-based system — ultimately improving the lives of the 7 billion people who live on this planet.
Charles Silver, CEO