The Role of Technology in Wealth Building
Technology has always been about increasing our capabilities and decreasing risks. I am going to make the case that AI is the most powerful wealth building technology and (more importantly) it adds leverage to almost every other technology, system and science — all of which constantly evolve, now at rising rates thanks to AI.
Let’s go back first and build the case.
Early technology like the wheel put the men and material of our world into motion - dramatically increasing our ability to create valuable things and monetize them. Communication made a leap with the introduction of papyrus and early writing systems like cuneiform. Information could now be recorded and spread — we needed this to eventually create IP, build companies around it, have a financial system, etc…
Speed tour through the history of technology to give us a baseline for this discussion:
Early Stone Tools
Crude but effective hand axes, spears, and arrows improved hunting and gave early humans an advantage for survival. This marks the first step in our use of technology to shape the environment to our benefit.
Agricultural Advancements
The plow, sickle, and irrigation systems boosted crop yields and allowed civilizations to expand. Machines took over physically grueling tasks.
The Printing Press
In the 15th century, Johannes Gutenberg's printing press allowed books and information to be mass produced. This revolutionary device was a catalyst for the spread of knowledge and literacy.
The Industrial Revolution
Steam power and mechanization starting in the 18th century lead to mass production in factories. Technologies like the steam engine and cotton gin accelerated manufacturing output.
The Digital Age
Starting in the 1950s, the invention of computers and eventually the internet connected the world like never before. AI and automation are the latest phase in this digital transformation.
Each of these breakthroughs shaped society in profound ways. All of them increased our ability to organize information, material and labor into higher orders of value.
Of particular note - the pace of progress is accelerating at accelerating rates.
Once we invented money, invented GP/LP and figured out how to securitize assets and risk our wealth building rate skyrocketed.
This rising abundance is a stark departure from our past.
Technology is Accelerating Wealth
For all of human history constraints have shaped our societies. Limited food, water, energy and raw materials led to competition, conflict and hindered technological and social progress.
With capabilities far beyond humans already, AI is now helping us optimize the production, allocation and usage of resources on a global scale, starting the work of bringing humanity to a post-scarcity world.
We need to focus on using these powerful technologies to increase our energy production capacity and efficiency across the globe.
As we continue climbing the Kardashev scale our next priority is energy for our bodies — food.
In agriculture, AI oversight is helping us minimize waste through perfect coordination of planting, fertilizer use, irrigation, pest control and harvesting. Autonomous farm machinery tends crops customized to each microclimate. Vertical farms are precisely tuned for year-round output via robotics, LEDs and climate control.
Urban and rooftop aquaponics controlled by ASI will integrate fish and crop farming, producing high yields sustainably. Product shelf-lives can be extended by algorithms managing storage temperatures, packaging and distribution routes. AI logistics will route products via autonomous trucking and delivery drones, minimizing spoilage. AI is even being used to simulate novel proteins and use those to produce artificial protein replacements and foods with enriched bioavailability of vitamins, phytonutrients and other key health drivers.
Ultimately AI will (in conjunction with dropping energy costs) end food poverty, malnutrition and will help limit unhealthy diets.
After “solving for” energy and food, the next priorities are:
Clean water
Computing power
Rare earth and other metals and mineral extraction
As you can see, AI is going to do a great deal to change our world and the value we are able to build. It should alleviate resource constraints, optimize our logistics and build new value streams all over the economy.
But how is that value going to be distributed?
AI is going to democratize and accelerate wealth building for all of us.
The Dawn of Democratized Wealth
Wealth building, once the exclusive domain of the privileged few, is undergoing a radical transformation. No longer confined to Wall Street trading floors or exclusive investment clubs, the pursuit of financial freedom is becoming increasingly accessible to the everyday individual. This democratization of wealth building is being fueled by the convergence of two powerful technologies: Artificial Intelligence and Blockchain. These innovations are not just tools for the tech-savvy; they are fundamentally reshaping the landscape of opportunity, empowering individuals with unprecedented access to information and investment avenues.
Imagine a world where your financial portfolio is not only tailored to your specific goals but also managed with the precision and foresight of advanced algorithms, and where you can own a piece of a thriving business or a valuable asset without needing a fortune to get started. This is the promise of AI and Blockchain, and at the heart of this revolution lies Bitcoin, a digital currency challenging traditional notions of value and finance.
In the past, building wealth often required significant capital, insider knowledge, and connections to navigate the complex world of investments. Traditional financial institutions acted as gatekeepers, often charging hefty fees and limiting access to lucrative opportunities. But the rise of AI and Blockchain is dismantling these barriers, ushering in an era of transparency, accessibility, and efficiency.
How AI and Blockchain Change Wealth Building
AI extends the ability to analyze vast amounts of data and identify patterns and this emerging technology is providing individuals with the insights needed to make informed investment decisions. Blockchain, with its decentralized and secure nature, is enabling fractional ownership of assets and facilitating peer-to-peer transactions, cutting out the middleman and empowering individuals to participate directly in the economy.
This convergence of AI and Blockchain is not just about making investing easier; it's about fundamentally changing who can participate in wealth creation. It's about empowering individuals with the tools and knowledge to take control of their financial futures. It's about creating a more inclusive and equitable financial system where everyone has the opportunity to build wealth and achieve their financial goals. And with Bitcoin leading the charge in challenging traditional financial systems, the future of wealth building is brighter and more accessible than ever before.
Ultimately it is about power and gaining sovereign control of our own futures.
AI is Rising
AI is getting better at rising rates — both in terms of performance and cost per token.
Imagine having a financial advisor with an encyclopedic knowledge of market trends, economic indicators, and individual company performance, available 24/7. This is the power of AI in wealth building. No longer reliant solely on human intuition and limited data sets, investors can now leverage AI's ability to process and analyze vast amounts of information with unparalleled speed and accuracy. AI algorithms can digest mountains of data and identify subtle patterns and correlations that might escape even the most seasoned team of caffeine powered analysts. This allows for more informed investment decisions, minimizing risk and maximizing returns.
One of the most significant ways AI is revolutionizing investment is through predictive analytics. By analyzing historical data, news sentiment, social media trends, and even satellite imagery, AI can forecast market movements with increasing accuracy. For example, AI algorithms can track supply chain disruptions by analyzing shipping data and predicting their impact on specific industries or commodities. This allows investors to anticipate market shifts and adjust their portfolios accordingly, gaining a crucial edge in the fast-paced world of finance.
Robo-advisors are becoming increasingly popular, offering tailored investment advice and portfolio management based on individual risk tolerance, financial goals, and investment horizons. These platforms use sophisticated algorithms to optimize asset allocation, rebalance portfolios, and even suggest tax-loss harvesting strategies, all while keeping fees significantly lower than traditional human advisors. This personalized approach not only democratizes access to sophisticated investment strategies but also empowers individuals to take control of their financial destinies.
The applications of AI in wealth building are vast and continue to evolve. From algorithmic trading that executes trades at lightning speed to fraud detection systems that protect investors from scams, AI is reshaping the investment landscape. By providing access to sophisticated tools and insights, AI is empowering individuals to make informed investment decisions, level the playing field, and achieve their financial goals.
This means more of your wealth stays inside your own wealth systems — it can fuel growth of your existing wealth engines. You are not losing wealth to intermediaries and other forms of friction.
Blockchain: New Era of Wealth
Blockchain, the technology underpinning cryptocurrencies like Bitcoin, is more than just a digital ledger. It's a revolutionary system that is fundamentally changing how we own, trade, and invest in assets. One of the most exciting applications of blockchain in wealth building is fractional ownership. Imagine owning a piece of a luxury condo in Manhattan, a rare piece of art, or a promising startup, even if you don't have millions to invest. This is the power of fractional ownership, and blockchain makes it resource efficient and easy.
Traditionally, investing in high-value assets like real estate or fine art required significant capital, often putting them out of reach for most individuals. But with blockchain, these assets can be digitized and divided into smaller, more affordable units, represented by tokens.
These tokens can then be bought and sold on blockchain platforms, opening up investment opportunities to a wider pool of individuals.
Here's how it works:
Tokenization: The asset, whether it's a property, artwork, or company shares, is represented as a digital token on a blockchain. Each token represents a fraction of the underlying asset's value.
Decentralized Platform: These tokens are traded directly between owners or on decentralized platforms, eliminating the need for intermediaries like brokers or banks. This reduces transaction costs and increases transparency.
Fractional Ownership: Investors can purchase tokens representing a fraction of the asset, allowing them to participate in its appreciation without needing to buy the whole thing.
This has profound implications for wealth building.
It democratizes access to previously exclusive investment opportunities, allowing individuals to diversify their portfolios and participate in the growth of valuable assets. Imagine a young professional investing in a fraction of a Picasso painting or a small business owner owning a piece of a commercial building that she works in, all through a secure and transparent blockchain platform.
This change is being felt throughout the economy and financial markets already, and going forward as adoption increases I expect to see the following play out:
Increased Accessibility: High-value assets become accessible to a wider range of investors.
Enhanced Liquidity: Tokens can be easily traded on blockchain platforms, providing greater liquidity compared to traditional illiquid assets like real estate.
Reduced Costs: By eliminating intermediaries, blockchain reduces transaction fees and management costs.
Improved Transparency: All transactions are recorded on the immutable blockchain, ensuring transparency and accountability. Fraud and other financial crimes practically disappear.
Greater Security: Blockchain's cryptographic security protects against fraud and unauthorized access.
Beyond fractional ownership, blockchain is also transforming other areas of wealth building. Decentralized finance (DeFi) platforms are offering innovative financial services like lending, borrowing, and yield farming, all without the need for traditional financial institutions. This opens up new avenues for individuals to generate passive income and grow their wealth.
By removing barriers to entry and empowering individuals with greater control over their assets, blockchain is paving the way for a more inclusive and decentralized financial future. It's a future where wealth building is not just for the privileged few but for anyone with an internet connection and a desire to participate in the growing digital economy.
This means you can grow your wealth with the least amount of gravity weighing it down. You have wider access to opportunities at lower costs. That’s the formula for wealth building.
A Financial Revolution for Everyone
The combined force of AI and blockchain is not simply about enhancing existing financial systems; it's about a fundamental shift in power dynamics.
These technologies are driving a wave of decentralization and democratization, breaking down the walls of traditional finance and empowering individuals in unprecedented ways.
For centuries, wealth building has been largely centralized, controlled by institutions and individuals with privileged access to information and opportunities. This system often perpetuates inequality, leaving many individuals on the sidelines of wealth creation. AI and blockchain are dismantling these barriers, creating a more inclusive and equitable financial landscape.
AI's role in democratization lies in its ability to level the playing field in terms of information and access. Sophisticated algorithms and machine learning models can analyze market trends, identify investment opportunities, and provide personalized financial advice, services previously accessible only to high-net-worth individuals. AI-powered platforms can provide educational resources and tools, empowering individuals with the knowledge and confidence to make informed financial decisions.
Blockchain, on the other hand, is democratizing access to investment opportunities themselves. Through fractional ownership, individuals can invest in high-value assets like real estate, art, and private companies, regardless of their income level. Decentralized finance (DeFi) platforms are also emerging, offering a wide range of financial services, from lending and borrowing to insurance and asset management, all without the need for intermediaries like banks. This not only reduces costs but also opens up access to financial services for individuals who may be underserved by traditional institutions.
This shift towards decentralization has profound implications:
Reduced reliance on intermediaries: Blockchain eliminates the need for intermediaries like banks and brokers, reducing fees and increasing efficiency. This empowers individuals to take control of their finances and participate directly in the economy.
Increased transparency and security: All transactions on a blockchain are recorded immutably and transparently, reducing the risk of fraud and corruption. This fosters trust and accountability in the financial system.
Greater financial inclusion: AI and blockchain can help bridge the gap between the financially underserved and the traditional financial system, providing access to financial services and opportunities for individuals who may have been excluded in the past.
Empowerment of individuals: By providing access to information, tools, and opportunities, AI and blockchain empower individuals to take control of their financial futures and build wealth on their own terms.
This democratization of finance is not just about individual empowerment; it has the potential to reshape the entire economic landscape. By distributing wealth and opportunity more broadly, AI and blockchain can contribute to a more equitable and sustainable society. It's a future where financial freedom is not a privilege but a right, accessible to everyone regardless of their background or socioeconomic status.
Is it all good news then?
No, central banks continue to print new fiat money at the highest rates in history.
This brings Bitcoin into the discussion.
Bitcoin: A New Wealth Battery
While AI and blockchain are revolutionizing how we invest and access financial opportunities, Bitcoin is emerging as a key component of this new wealth-building paradigm. As the first and most well-known cryptocurrency, Bitcoin has captured the imagination of investors and challenged traditional notions of money and value. With its decentralized nature, finite supply, and growing adoption, Bitcoin is increasingly being viewed as a digital store of value and a potential hedge against inflation.
I’ve written at length about the technology, the math and the game theory of Bitcoin before, it’s a good read:
As the article discusses deeply, one of Bitcoin's core strengths lies in its decentralization. Unlike traditional currencies issued and controlled by central banks, Bitcoin operates on a distributed network with no single point of control. This makes it resistant to censorship and manipulation, providing a level of autonomy and security that traditional currencies lack. In an increasingly uncertain world, with geopolitical tensions and economic volatility, Bitcoin offers a safe haven for individuals seeking to protect their wealth from the whims of centralized authorities.
Bitcoin has a finite supply capped at 21 million coins.
This scarcity, combined with growing demand, contributes to its value proposition. Unlike fiat currencies that can be printed endlessly, leading to inflation and devaluation, Bitcoin's limited supply provides a built-in mechanism against inflation.
Bitcoin’s supply is algorithmically set and insensitive to demand. This makes it an attractive option for investors seeking to preserve their purchasing power in the long term.
While Bitcoin has experienced significant price volatility in its relatively short history, its long-term trajectory has been upward. As adoption grows and more institutions and individuals recognize its potential, Bitcoin's value is likely to continue to appreciate. This potential for capital appreciation makes it an appealing investment for those seeking to store their wealth in a vehicle that also provides the possibility to grow their wealth.
Bitcoin's role in the future of wealth building extends beyond its investment potential. As a decentralized and borderless currency, it facilitates global transactions and empowers individuals in countries with unstable economies or limited access to traditional financial systems. It also serves as a foundation for the growing DeFi ecosystem, providing a platform for innovative financial products and services that challenge the traditional financial order.
While Bitcoin is not without risks, its potential to disrupt traditional finance and empower individuals is undeniable. As part of a diversified portfolio, Bitcoin can offer a hedge against inflation, a store of value, and a gateway to the exciting world of decentralized finance. As the world continues to embrace digital technologies, Bitcoin is poised to play an increasingly important role in the future of wealth building.
Printing Press of Wealth
The convergence of AI, blockchain, and Bitcoin remind me of the invention of the printing press.
Where knowledge was once confined to the privileged few, the printing press democratized access to information, fueling the Renaissance and driving societal progress. Similarly, these technologies are democratizing access to wealth building, empowering individuals with the tools and knowledge to shape their financial destinies.
This new era of finance is not without its challenges, just as the printing press faced resistance from those who sought to maintain control over information. But the forces of innovation and democratization are powerful, and the potential rewards are immense.
We deserve and are building a world where financial opportunities are no longer limited by geography, socioeconomic status, or access to traditional institutions. Imagine a world where individuals have greater control over their assets, where financial transactions are secure and transparent, and where everyone has the opportunity to participate in the growth of the digital economy.
This is the reality of AI, blockchain, and Bitcoin. We are building a new sovereign order where wealth building is not a privilege but a right, accessible to everyone with a desire to build a better future for themselves and their families.
Opportunity empowered by technology and creativity for all.
The tools are in our hands; the future is ours to create.
AI x Blockchain x Bitcoin have major roles to play in my wealth systems and you should be leveraging them too.
🥺 Follow our newly launched video channel Hacking Wealth. This video series focuses on the overlap between wealth and technology.
Wealth is the sum of all the value humanity has created while technology is the engine we've used to build wealth over time. The rate of wealth building is accelerating faster and faster thanks to AI, robotics and rapidly rising tide of technology.
👋 Thank you for reading Wealth Systems. I started this in November 2023 to share the systems, technology, and mindsets that I encountered on Wall Street.
💡The BIG IDEA is share practical knowledge so we can each build and optimize our own wealth engines and combine them into a wealth system.
To help continue our growth please Like, Comment and Share this.
NOTE: The content provided on this blog is for informational purposes only and does not constitute financial, accounting, or legal advice. The author and the blog owner cannot guarantee the accuracy or completeness of the information presented and are not responsible for any errors or omissions or for the results obtained from the use of such information.
All information on this site is provided 'as is', with no guarantee of completeness, accuracy, timeliness, or of the results obtained from the use of this information, and without warranty of any kind, express or implied. The opinions expressed here are those of the author and do not necessarily reflect the views of the site or its associates.
Any investments, trades, speculations, or decisions made on the basis of any information found on this site, expressed or implied herein, are committed at your own risk, financial or otherwise. Readers are advised to conduct their own independent research into individual stocks before making a purchase decision. In addition, investors are advised that past stock performance is no guarantee of future price appreciation.
The author is not a broker/dealer, not an investment advisor, and has no access to non-public information about publicly traded companies. This is not a place for the giving or receiving of financial advice, advice concerning investment decisions, or tax or legal advice. The author is not regulated by any financial authority.
By using this blog, you agree to hold the author and the blog owner harmless and to completely release them from any and all liabilities due to any and all losses, damages, or injuries as a result of any investment decisions you make based on information provided on this site.
Please consult with a certified financial advisor before making any investment decisions.