From a business owner’s perspective, the decision to invest in cryptocurrency and its supporting technology can seem like a risky venture, especially when you consider the cryptomarket’s volatility. But while this new financial system still has a long way to go in terms of security and efficiency, the latest trends suggest that consumer usage of Bitcoin and other digital currencies isn’t going to wane anytime soon. In today’s episode, Jon Aidukonis and Gene Marks along with Beth Kindig, Lead Tech Analyst at IO Fund, discuss how recent developments in cryptocurrency technology and digital assets will impact the small business world.

*Please do your own research before investing in cryptocurrency or other digital assets.

Executive Summary

0:26—Today’s Topic: How Will Advances in Cryptocurrency Impact My Small Business?

1:40—IO Fund is a tech portfolio for stocks that can also serve as a valuable resource for business owners who are interested in cryptocurrency investments or digital asset management.

5:05—The core technology behind any cryptocurrency is the blockchain, which is essentially a digital ledger of transactions. However, unlike the internet, which uses one external source to monitor it, the blockchain is decentralized and relies on multiple nodes to verify a transaction.

8:01—Because the blockchain is based on trust and there is no third party to check for fraudulent activities, transaction costs tend to be significantly lower when using this protocol.

11:31—In order for the blockchain to become a more viable option in the future, it needs to increase the number of transactions that it can process per minute. The blockchain will also require security improvements to reduce the risk of data corruption.

15:17—A number of companies are currently attempting to stabilize cryptocurrency by restricting how fast investors can withdraw or deposit their funds within a restricted pool.

17:04—Provided that the blockchain can achieve a competitive level of speed and security, it is predicted that a lot of Fortune 500 companies, insurance companies, and accounting firms will be among the first businesses to switch over to this protocol.

19:23—An NFT (Non-Fungible Token) is a unique digital asset that belongs exclusively to you; NFT’s are typically distinct to specific virtual spaces or platforms within the metaverse.

22:41—With so many people moving their interactions from social media to the metaverse, a lot of brands are now trying to capitalize on its popularity by creating their own NFT’s that customers can use within these different digital realms.

26:07—While investing in NFT’s or digital assets has the potential to generate some future capital, it might be wiser to focus on investing in the larger companies that are contributing to the changes in our primary protocol system.

29:51—If your small business doesn’t lend itself to the digital gaming realm, it’s a good idea to consider how you can build a demand for it within the marketplaces on social media.

32:01—The reason why NFT’s are a risky investment at this point is because there is still a lot of market volatility when it comes to the value of digital assets.

34:21—Business owners should be prepared for cryptocurrency to become another preferred payment option within the next few years; they should also start to consider how their current point of sales system can adapt to accommodate this shift.

34:58—If you’re unsure of whether accepting cryptocurrency will become a necessity for your business, examine the age and location demographics of your existing client base; generally, businesses that serve an international customer base, primarily between the ages of 25 and 40, will need to accommodate this new form of payment in the near future.



The views and opinions expressed on this podcast are for informational purposes only, and solely those of the podcast participants, contributors, and guests, and do not constitute an endorsement by or necessarily represent the views of The Hartford or its affiliates.

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Gene: Hey everybody. And welcome to this episode of the Small Biz Ahead podcast. My name is Gene Marks and I am here with my fearless co-host, Jon Aidukonis. Jon, hello.

Jon: Hey, Gene. How’s it going today?

Gene: It is going good. I’m glad you’re here. I’m really glad you’re here because we’re going to have a talk about crypto and digital currencies, NFTs, blockchain, all that. And before we even started recording this, it seemed like you knew like very little about this, which is great because this is an education, not just for you, but obviously for our audience. So I’m excited to have this education. I’m hoping that you don’t get any ideas and quit The Hartford and then go and start up your own business, selling pictures of bored apes. So we’ll hope that doesn’t happen.

Jon: I never say never, but I’m super excited to be here. I have had a lot of questions around a lot of these words and acronyms for a long time. I don’t know what they mean at all. I think I’m probably not the only one. So really looking forward to the conversation and leaving with some knowledge.

Gene: Great. Okay. So let’s get into it. So our guest today and a big, thank you in advance to Beth Kindig. Beth is a lead tech analyst at IO Fund, which is Beth, first of all, thank you so much for joining us.

Beth: Absolutely. Really appreciate you asking me.

Gene: So first of all, tell us a little bit about IO Fund and then I’d like to know about you and your role there and how you got into the world of crypto.

Beth: Yes, absolutely. So IO Fund, IO is input output, and it’s used in all forms of computing. So the name of our company represents we’re basically a tech fund, a tech portfolio for stocks, and we show you every trade we make. And our differentiation, because obviously there’s a lot of voices in Wall Street, there’s a lot of voices on stocks, is that I’ve been writing about tech products in depth, big deep dives for over 10 years. And I did that in Silicon Valley. So when you give me a hundred cloud stocks, I can come to you and say, “These three, I believe are going to lead the market and here’s why,” and I break it down into very simple terms.

So I’m not a product engineer, I’m not a computer science degree. Instead, my training was to work with those guys and gals and describe what is the product that you’re making and then go on stage or go to the press and discuss, here is the product that this company is making, and here’s how it stands out compared to hundreds of competitors. Then I moved into the public markets. So I’m able to do this in the public markets, which is, is the markets selling out of a super high quality tech company that has major product differentiation, or is the market being efficient and this product cannot compete with the other 20 cybersecurity companies or the other 20 data analytics companies?

So how do you move through all of that, but move through it to where you can have a conversation later on with your spouse or your friends who are not deep in the tech industry? So how do we simplify these discussions so that you know what you’re buying and why you’re buying it? And then our record has been very, very good. So I’ve called a lot of companies, their exact thesis has played out. Things like Nvidia will be a big deal in AI. This was when the market was selling out of Nvidia for crypto mining and calling them a gaming company. And I was saying, hold off, this is an AI company and that’s going to start to happen. And we’re going to start to see evidence of that. And we did begin to see evidence of that over the last two years. So that’s the kind of clarity we like to bring to the markets.

Gene: Got it. There’s so much that I could talk to you about just in the world of technology. And you mentioned AI automation, there are plenty of mobile applications that our audience would be interested in hearing what your thoughts are, but we’re going to keep this just a narrow focus to just sort of the world of crypto if that’s okay.

Beth: Yes.

Gene: I just wrote a piece in the Guardian actually just a couple weeks ago where I’m saying that even though labor disruption and inflation have been like the big things that the media has been covering, in my opinion, the biggest small business story of the year is blockchain, and what it’s doing. I did a little research into it. The crypto market is worth more now than $3 trillion. And apparently venture capital firms poured in like $30 billion into this universe, Bloomberg reported on that, which is quadruple the previous high mark in 2018. So it’s exploding.

And the goal of this conversation is for you, because you’re right, you’re smart, but your expertise is communications. So I need, Jon needs, our audience needs some education. So let’s first of all start with blockchain because blockchain is really the foundation of cryptos and NFTs and tokens and all those other sort of buzzwords that we’re hearing about. So Beth, tell us about blockchain. What is your understanding of it and how are businesses using it right now?

Beth: Yeah. I think that’s a really great question. And I’m glad that you’re keen on the idea or the fact that blockchain is becoming something we can’t ignore. Whether you’re an investor or tech enthusiasts, it doesn’t matter. It has proven that it’s here to stay. Bitcoin reclaimed its all time high in about three years when it had a massive 80% sell off. Cisco has never reclaimed its all time high from the .com bust. So just to give you an example, Bitcoin has been very, very strong after those sell-offs comparatively speaking and that’s what we track. So price wise, we’re starting to see the market understand what you just said as well.

So when I think about the blockchain, I guess the easiest way if I were going to talk to my buddy or whatever, I would say, I want you to think about the internet protocol that transmits data and information all of the time. It doesn’t matter if it’s a website or an email, we’re transmitting on top of a protocol and we’re in the fifth or sixth version of that. So I want you to think of blockchain as something very similar. Now, it has a big benefit compared to the protocol that you use every day, which is the internet. The benefit is that it’s decentralized.

So one example, I guess, if I’m going to talk in extreme layman’s terms, imagine you’re a kid cheating on a test in a classroom. And all you had to do was get one other kid to let you cheat, look at his paper. That’s doable, right? There’s only one other kid you have to convince. Now, imagine if you had to convince the entire classroom to let you cheat, that would be impossible, right? There’s 30, 40 kids in the class. So that is basically in very, very layman’s terms, how decentralization works. Which means that instead of the protocol convincing one centralized source, it now has to convince or prove that this is a valid transaction or it’s a valid social media post that’s not from a bot. You have to convince many nodes that are constantly verifying that what you’re doing is trustworthy.

And by the time that you add all of these validators, which are many, many validators, millions, it’s impossible for a corrupt or fraudulent action to convince that many validators that what this action is not fraudulent when it is. So the benefits of that is we see transaction costs go down. The only reason that I’m paying 3% when I use my MasterCard, I have cash in the bank, let’s say, and I’m going to use a credit card. The only reason that these fees are so high is because fraud is so rampant and MasterCard and VISA are very good at fighting fraud.

There’s other things too. Obviously we have the centralized banking system. So everything that has to go through a middle man, if you just remove that middle man and created a system of trust, then we no longer have to constantly pay the middle man. And that has created a lot of problems. Chase Bank, if you go down to Chase Bank and you get a loan, a credit card, let’s say, they’re going to charge you 20% interest maybe. Let’s say 10 to 20%. Why can’t I loan my cash in the bank to somebody and make that 10 to 20%? Wouldn’t we all jump all over it to get that kind of returns?

The reason is that we don’t know if this person is credit worthy. The blockchain can make sure that this person is creditworthy. So you can technically peer-to-peer lend and you can do it as safe manner as possible. And we no longer have to make zero money on our cash in the bank because they’re not going to pay you to hold cash in the bank these days, and turn around and pay, other people have to pay 10 to 20%. Maybe we cut them a deal and say, I’ll only charge you 9%, we’ll undercut Chase, and I’ll still make 9% returns out of credit worthy individual who the blockchain has verified. That’s the kind of stuff that gets really, really interesting.

Gene: And to add to that, when people talk about the blockchain, I envision, now, I’m an accountant. So I apologies for this, but I do envision this as like a ledger of transactions, that once it is validated by all the many sources that you say once a transaction is validated it, it really can’t change. It is true and it is real and it’s permanently part of this ledger that goes on forever and ever and ever. Is that a good way to also explain?

Beth: Yes. The visual is the ledger. So you can actually look at the Bitcoin. If I’m going to send you Bitcoin, it’ll be recorded on a ledger and we could actually visibly see that ledger. Correct.

Gene: I was just listening this past week to this great conversation with Lex Friedman who was a podcaster and MIT AI guy and Elon Musk. Now, I don’t know if you heard this conversation or not. It was like a two and a half hour conversation, it was really good and I recommend anybody to listen to it. You can find it online. So he asked Elon Musk about blockchain and also about smart contracts. And I thought that part of the conversation was interesting to me because even though Musk himself was like, listen, he’s not a big fan of smart contracts, which I’ll explain in a minute, but only because he’s more of a fan of just, if you have a contract with somebody, you keep it as simple as possible, and try not to complicate it with the blockchain.

But a contract is another good example to use. Isn’t it? IBM is doing a bunch of work with contracts on a blockchain so that every part of a contract can be validated and held true and not changed either. And I think that might have business applications as well. Do you find that or do you guys see that as something in the future as well?

Beth: Absolutely. And I think in the future is the key words with that. And so the one reason I always bring things back to the fact that everyone’s using the internet protocol every day, is so that people who are confused are adverse to the idea of crypto understand that you’re working with something that it will be very similar to the blockchain already. And so now after we’ve transmitted transactions and data, etc., now we can open up the discussion to, how is blockchain different than the internet?

But I want to make sure we normalize it because I think that people from the outside look at the crypto tulip craze. We had this ICO tulip craze in 2018 and it busted. But that is very different from super quality companies that are going that 99% chances, I would say, let me say, 90% chance, will disrupt the internet. So it’s a replacement in many ways for the internet. And then you can think about financial systems and insurance and smart contracts. And the reason why smart contracts need more time, first of all, we currently have a transactions per second issue with Ethereum.

So we have to kind of figure that out, which I think is going to be the first thing that people figure out because it’s just prohibitively expensive right now to use the blockchain for many use cases. So that would have to come first in my mind. And then it turns into, how do you pull off chain data on chain in a secure manner? Because this is supposed to be incredibly secure. One of the main value propositions is that it’s decentralized so it’s extraordinarily secure.

So now, if you move outside of like the Bitcoin, Bitcoin is extraordinarily secure because there’s not going to be any further development on it. But then when you take a company like Ethereum where they will be building many applications which they call decentralized apps, the question is, how do you input data and APIs that are constantly pulling data? Can’t that data become corrupted? So that’s probably, I would say problem number three, because we have to get transactions per seconds where it’s competitive with like a VISA payment. And there’s obviously various Ethereum contenders right now to do that.

Gene: I heard Dogecoin actually, although kind of started out as a joke, is actually quite that much faster than Ethereum even. I don’t know if that’s true or not, but that’s something I had read too.

Beth: I’m sorry. Which one?

Gene: Dogecoin.

Beth: Yeah. Dogecoin, for sure. Yes. Well, you saw the big run up in Solana this year. Solana is a direct competitor to Ethereum, super high throughput. I think it’s up to 65,000, 50,000 transactions per seconds. To put it into context, Ethereum is like 30 transactions per second. So we got three zeros on Solana. with how fast it is.

Gene: Well, just to normalize this here just for our audience, the reason why we’re talking about all these different types of digital currency is because they’re still, and correct me if I’m wrong, Beth, we’re still in the early days of this relatively. Speed is really, really important because you have to complete these transactions instantaneously for them to be like a credit card transaction. But we’re getting there, we’re moving along the way. And I think that problem is going to be solved through a combination of hardware and software.

So what happens next? Our audience are small business owners. And I’m going to turn this over to Jon because I know he is going to have some other questions, probably regarding NFTs and things like that. But if I’m a small business owner, why should I care about this? How is this going to impact my business five years from now or 10 years from now?

Beth: Yeah. I think what would happen, I’ll get to that in just one second, once we can get the transactions per seconds up, or we’ve really chosen a leading network for DAPS and transactions, mobile payments, let’s say, everywhere you go, stabilizing crypto will be next. We all know crypto is volatile. So Bitcoin loses value, it gains a lot of value. How do you know when you’re going to buy that cup of coffee, that let’s say it’s a $3 Starbucks coffee, that it doesn’t suddenly become $10 because crypto is so unstable?

There are are companies that are basically stabilizing this and those companies have various methods of pooling together funds that you either can’t pull out very quickly and they convert them over to stable coins. So instead of lending to your neighbor or whatever it is to replace Chase Bank, you would lend your money to an exchange that stabilizes. It’s basically a market maker that stabilizes the pricing. You would take a while, it’d be longer to get your money back out because you’ve staked it for the purpose of stabilizing the coins as in the pool. It’s a pool of tokens, basically. So that would be next.

Gene: Yeah. So we made it faster and we stabilized it, and I don’t know how long that’s going to take, but I’m assuming some years, a few years. So what happens next?

Beth: Yeah. So then we would look at off chain data going on chain and that’s when things, I think, explode. I think that some of the payments have been slower to be adopted because we just need to push more for the transactions per seconds and the stabilizing. But once that happens and we’re start to bring off chain on chain, things start to move really quickly. And I think it’ll be industries and Fortune 500 that you’ll see a lot of adoption. They’re going to see big impacts to their budgets.

Whether you’re an insurance company and you are going to be validating your insured and making sure that they are, let’s say that you have claims coming in. This is one that we just saw happen through Deloitte, which is disaster recovery. So I actually spent a lot of time in Colorado. They just had a big fire. So my heart goes out to those people because I literally drove by when the houses were burning down. And the disaster recovery checks are, your FEMA applications would go through the blockchain to make sure everything’s validated, everything’s recorded. There’s no fraud in that process. You are that person that owned that house, all of that is being recorded. So they’re already moving in that direction for disaster recovery.

It can just get too paperwork heavy if you will, those kinds of processes. So then accountants might be another one that start to move towards the blockchain because when you’re filing your taxes, you can now have a ledger of who’s paying taxes and how that’s, there’s just a lot of paperwork with that kind of process. So you can remove that level of paperwork by having everything validated on the blockchain.

Gene: Got it. So it will obviously increase speed, it will reduce complexity and it will significantly enhance the security of transactions, which ultimately will reduce costs for a lot of businesses. I can see where the future, that’s great. I don’t know, I have so many more questions for you, Beth. I’m sorry, but I know Jon does as well. So Jon, you’re there, right? You’re probably looking at the bored ape yacht club at this point, is that right?

Jon: No, I’ve been pretty deeply listening. But I do definitely have some questions and a lot around kind of the NFT part of the conversation, because that’s something that I don’t know that I can fully get my head around. But Beth, maybe just to level set me, an NFT is actually like an asset, not a currency. It’s kind of the thing you’re buying with some of these cryptocurrencies?

Beth: Yes. So you own a non-fungible token or a digital asset that is yours. This actually really sparks up the metaverse conversation, which is, is our online life as real and as rich as our physical life? I think it’s greatly depends on what generation, because I have family members that are early teenagers, preteens. And what they want for Christmas is a digital asset. They want a certain person in a certain game that they feel like they own. Or they want to clothe that person, they want to put different accessories on them. And so they feel they have something that’s theirs in the digital realm. So that piece.

And then, I’m not a big art collector. I’m not from Sotheby’s or anything like that. But I think that there’s this idea that art collectors and those more creative types have already been pushed into the digital realm whether they want to or not. How many times have you looked at a painting in the past five years or thought to go out and buy real photography? So they’ve been pushed into that realm, artists have. Whether that’s a good thing or a bad thing, it doesn’t matter because it’s happened. So digital art is becoming more commonplace than physical art.

Gene: And if I can just interrupt, I just have to say, Jon, because I was talking about this recently with someone else, is that Beth had mentioned the metaverse. And for those of you guys listening the metaverse is, it’s Mark Zuckerberg’s vision, but a lot of big tech companies of sign onto it, of creating basically a gaming universe is really what it is, where we have avatars of ourselves that will eventually mature. And these meetings that we’re having right now, podcasts in the future where we can all be sitting in the same virtual room, looking at each other through our avatars.

I believe if we are sitting in that room, if we end invite you, Beth, to a conversation in the Hartford recording studio, I believe companies will want to have artwork on the walls of their virtual recording studios that their guests can see. And I believe that companies will want to have their own unique artwork because that’s the kind of company that we are. And when you multiply that times the number of companies, the number of potential buyers out there wanting their own unique digital assets for their own digital metaverse world, it’s like this whole other market that opens up, a billion dollar market that’s coming. Does that make sense?

Jon: It’s interesting Gene. It’s funny that Mark Zuckerberg has kind of claimed that turn because I think it goes even older than that. So Beth, kind of to your analogy, to me, the only way I can get my head around it is almost thinking about when we started to buy tokens for arcades or kind of digital money for games like FarmVille. Or I think about kind of the idea of the Sims or this kind of notion of building your own universe with like Beanie Baby collectors. It feels almost like the new version of that, but in a very digitally native and very expensive world.

Beth: Right. And I have actually said that I think Square is being defensive by getting into Bitcoin because blockchain is moving that direction over to financial transactions and payments. And then I would say that Facebook’s being defensive here too, meaning they’re trying to maintain their territory because if you create these rich online worlds, what audience is going to migrate over? Well, it’s your social media audience because they like to spend a lot of time in an online world.

So I think that Facebook could technically be late to the conversation because we’ve in the background had leading companies working on this for a very, very long time. Roblox is probably, I would say I had to choose a pioneer in the metaverse, it’d probably be Roblox. They created a world for kids and now they’re trying to create that for teenagers and move their age group up for a more addressable market. I think that they have if I was going to say to somebody, if you want to experience the metaverse, I would say, get on Roblox right now. Because that’s probably the closest thing I can send you to that’s fully functioning, has been brought to market, is being adopted rapidly and growing rapidly and has been a first mover.

Gaming in general, like you said, is where we’re breaking a lot of ground. But as an investor, am I just exchanging one gamer for the next gamer? You know what I mean? Where’s the growth if they’re just moving from Fortnite over to whatever, Minecraft, they’re just moving over to a different game. But what you had mentioned about these brand advertisers being on the wall, I think that that’s really the most investible opportunity is for someone like myself who’s a stock investor, is I see brands wanting to participate in the metaverse. So that’s more interesting to me as an investor because I do think there’s so much time spent in the digital realm and ads are not, we’ve brought ads into mobile, we’re bringing ads into connected television.

But I think there’s something bigger that could happen with ads that we’re already seeing with like Gucci. And you try on their sunglasses or their sneakers with your avatar before you buy, those kinds of interactive. Augmented reality ads are an interesting piece for me because I’m looking for new markets and is gamers moving over to metaverse, is that a new market if they’re already gaming? Maybe not. But that’s just one example that you had mentioned about the ads on the wall that I think is really interesting that you picked up on.

Jon: Yeah. It’s interesting too, and I wonder, Gene, I think about kind of a small business audience who might want to think about NFTs as a business model. And I think about the folks who might own like a local art gallery, Beth, to your point where maybe there’s a world where they’re both selling local art, but they’re helping local artists get on a digital platform and actually kind of retailing that version. Or how people even in kind of retail or consultancy or even kind of development might be able to create assets and kind of sell their ideas now in these kind of digital execution. It’s a lot to kind of unpack, but I do wonder if we’re going to start to see the rise of kind of NFT dealers come from main street retailers, if that’s kind of what a future revenue stream might look like.

Beth: Yeah. And I think when it comes to NFTs and the metaverse, I would say we’re looking at younger populations, younger demographics, because I don’t know that I can get an older person to move over to the metaverse. So for me, when you’re looking at markets, you have got to look at who’s serving the younger kids really. And Roblox stands out, Snap stands out because they’ve got the millennials. So I’m always looking for who’s going to do this though. I need a lot of people to be an investor. I want tens of millions, hundreds of millions. So where are we going to find hundreds of millions that are going to spend time in the metaverse?

So as an NFT art dealer, is that going to be hundreds of millions of users, viewers, customers, whatever you want to call them, probably not. So for me, I am not an art dealer. I am an investor, I’m looking for big markets. I am not as keen on NFTs as I am on blockchain companies that are going to build basically what disrupts the internet at the layer one level. And then you have layer two in middleware. So I’m looking more for that piece only because I need hundreds of millions and I don’t know if I can get there with a NFT auction.

Gene: Beth, you say that and I totally get that. You certainly know more about the market than I do. But it’s like every generation almost has their platform. Slightly older people were creating celebrities in markets on Facebook. And then now you’ve got zillions of YouTube and TikTok influencers that’s a giant mark as well. And you hit it right on the head. This is not the people that are adults right now. These are the gen-Zers and the ones behind. They’re going to be living in the metaverse and all of these digital assets will be huge. And I feel like at some point there’s going to be a digital marketplace that young people, teenagers and kids love, where they can buy and sell and trade NFTs, kind of like they love going and watching YouTube influencers put on their makeup right now. Do you know what I mean? I feel like that’s got to come at some point. Does that make sense?

Beth: Yeah. We kind of have a contender potentially. The biggest NFT marketplace is OpenSea. So that is definitely happening. And for sure, OpenSea has attracted lots of new venture capital. So it’s not that NFTs aren’t an investible market by any means, it’s where I’m at, I need something wider and more broader for my personal and for the company’s investments. So I guess what I’m saying too is, I know there’s the supply, I know that there’s lots of great NFTs being offered, sold, transacted, etc., auctioned off. But what I’m looking for as an investor, which is key, is where’s the demand? Can I invest in that piece? And who’s the audience basically, who’s going to adopt all of this? And then of course, the technology is a big piece as well.

Gene: So, Jon, what do you think, are you ready to start making some drawings and selling them online?

Jon: It’s something that’s fascinating to me because you’re buying the idea of something real, but you’re kind of now putting reality around something that you can never really touch, which I don’t know that I’m fully there. I think I need to kind of absorb it a bit more. But it’s a really interesting movement. And it’s kind of, if you don’t want to live in the real world, you can create your own world and every element of it, and how those two things exist together, it kind of blows my mind.

Beth: And if you don’t spend a lot of time gaming, I would say the next adjacent market that is really fully functioning right now would probably be social media. How many times have you been in a social media world and you feel like the people you’re interacting with are close friends? Even if it’s old high school friends or you haven’t seen a family member in whatever, 20 years, let’s say they’re on the other side of the, you feel like you’re with them and you have this rich online world. So I have lots of people I talk to on Twitter. I don’t know them personally, and I feel like they’re either a close friend or they are big supporters of what I’ve done. And they’re very important people to me and I’ve never met them.

So now that’s a rich online digital world that we’ve all lived in. And so if you add where the person I talk to in real life today has had a similar effect as the person I was talking to that I’ve never met online. So you now can you create a bigger world out of that piece, is probably the best way to anchor it into the way that you function today.

Jon: Got it. And I guess the one thing I guess I’d poke on a little bit is, I think of the idea is that you own this one of a kind thing, that really isn’t as tradeable for other things. But when you’re thinking about a digital asset, how do you guarantee that authenticity and that even though you might own it’s really easy to take a screenshot or to do some kind of trace, or to kind of like duplicate something that looks or feels like something that you have? And I guess it’s kind of, if I was to compare it to fashion, when you kind of think about a new high end line by the time it hits mass market, everyone’s wearing something pretty similar.

Do you feel like when we think about NFTs in the future of kind of selling those types of items, that the thought process would be similar, where it’s like that you know have this one of a kind thing, and if everyone else has something that looks similar to it, jokes on them because they couldn’t get the premium? Or do you think that the ability to replicate and kind of copy digitally will start to devalue some of the assets that people are buying today as kind of these premium, one of a kind things?

Beth: Yeah. I think there’ll probably be a market for that too, which is how do you watermark or copyright that kind of thing or protect it. We see that with, the name is escaping me, but where you license images. Getty Images, they’re pretty good. I think if you take one of their images and you go use it at least in an editorial or something like that, you’re going to from them. I’m sure there’s going to be a market for that too. I do want to just, while I have your audience and everything, I do want to say that I am more keen as an investor on the infrastructure layer than NFTs.

And that’s because I don’t know that the audience, the demand is so great today that it’s where I would place my biggest bets, if that makes sense. I think it’s great. It’s obviously had a great start. If you happen to be in that world, you probably can navigate it very well and all of that. But for me, I’m much more interested in, how are we going to replace the internet? How are we going to replace financial transactions with decentralized those?

Jon: Got it.

Beth: Yeah. So I just want to make sure that I’m not somebody who has invested actually in NFTs at this stage. I think we have a lot of volatility ahead of us. They’re very new. If you haven’t heard of NFTs before last year, then they probably have another three, three to five years to go. There’s going to be boom and bust cycles, you’ve seen that with crypto. And so the chances that NFTs have a severe boom and bust cycle ahead of it is pretty high.

Jon: And when we think about the infrastructure layer then, because I think that’s probably really appealing to our audience too. So kind of on the ground as things, and we can go back to crypto, are starting to kind of become more part of the common vernacular, to your point, transaction processes are changing. What are some things that they might be on the lookout for as someone who relies on a transaction service to kind of make income, to start kind of considering or thinking about if it’s time for them to maybe adopt crypto payments. I think about last year and kind of the conversation around some of the big retailers Express or Whole Foods kind of accepting Bitcoin. And I wonder how locally and owned operator businesses might start to think about if they’re ready to, or if they should kind of build in that infrastructure on their end.

Beth: I think they should be very open to it. And I think they should be prepared for whatever point of sale system they use to support it. So I don’t know if maybe you work with Shopify, maybe you work with Square or Block or whatever you want to call it, Square. Maybe you work with Toast, whatever it is that you’re working with on your point of sale system, be fully prepared that these transactions per second will be solved. They’re already technically solved for, with some Ethereum competitors and Ethereum hopefully will have all that straightened out in the next year or two anyways.

And then we’re moving into the stabilizing, the pricing with token pools as market makers. And then from there, I think you’re going to see it move very quickly because all of these payment processing platforms are fully prepared because they know they need to do it if they’re going to survive. Blockchain is nipping at their heels right now and they’ll have to be very quick to that market. So everyone I think is preparing.

Jon: That’s good advice and guidance to kind of give. Because I think it’s a new year, I think everyone likes to start to look at some of their service providers every so often. So they are kind of thinking about how as an owner, they want to accept payments. I think that’s good advice and starting to have those conversations, because it’s probably not as easy as one would think to just switch kind of a full financial management system. So always get to kind of have in the back of your head.

Beth: And it probably truly depends on who your customers are. I think if you have that 25 to 40 range, that demographic is the ones that I fully expect to drive this because they have, like I said, the spending power, purchasing power. And then I think that if you look at some of the sentiment around the financial systems coming from that generation, we’ve all seen that graph of where income is relative to the cost of living. It’s not very pretty. Basically costs living started to skyrocket in the ’70s, income has been flat. Who does that affect the most? 25 to 40 year olds. So that piece is being driven by the demographics. So if you serve those people, you should probably be more prepared than somebody who’s serving maybe a different age group.

Jon: That’s great insight

Beth: And international. There’s nothing quite like the global population’s pushing for crypto. There’s no doubt. If we’re looking at the United States, then that’s a bit myopic because by far the bigger adopters, the fastest adopters we’re seeing our actually low income people, lower GDP countries.

Jon: That’s really interesting, and I think even more relevant given the nature of the currency. Because I think part of this too, is it starts to really redefine boundaries and customer access. And I think as it becomes a more normal way of doing business and way of selling and way of paying for things, your audience can likely grow too.

Beth: Absolutely. And I don’t have the statistics in front of right now, but El Salvador gave out a free, I don’t know if it was $100 or something. Again, I don’t have the numbers in front of me now, but they basically said, if you open a Bitcoin wallet, we’ll give you a little bit of Bitcoin. Within a month or two or within the first couple months, it exceeded the number of people that have checking accounts. So people do not trust the banks. And I think the lower you are in your income level, the more distress there is. So those are the masses and we’re going to see a big push come from there. And I think the that’s really probably the most interesting part of all.

Jon: That’s great. Yeah. I appreciate the insight. I feel like I learned a ton today and I could go for seven more hours, but I won’t. But I just want to thank you for taking some time with my questions.

Beth: Yes, absolutely. My pleasure. It’s really nice speaking with you both.

Gene: Beth, thank you very much. We’ve been speaking with Beth Kindig. She’s the lead tech analyst at IO Fund, that’s Beth, just really great and educational. And I’m going to reach out to you separately as well because I have even more questions for you that I might be writing about in the future. But this is definitely a topic, Jon, that we need to dig into more on Small Biz Ahead as well. And that’ll be something that we discuss. Beth, thank you for all of your input. It’s been great.

Beth: Absolutely. Thank you so much. Have a great weekend.

Gene: Thank you. And everybody, you’ve been listening to the Small Biz Ahead podcast. If you need help or advice or tips in running your business, please join us From my colleague, Jon Aidukonis, and myself, Gene Marks, thank you very much for joining us. We’ll see you on the next episode. Take care.

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