Oct 11, 2021 • 7M

Ep 36. Toy or Next Big Thing?

Facebook, Kim Kardashian and Gen Z

 
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Some say Crypto is a scam. Others swear it's a breakthrough technology. But which is it? Join us, as we explore Crypto in real life (IRL).
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Last week, I enjoyed sharing my thoughts on Pay like you email in longer form. Thanks for the feedback. This week, I have been reflecting on toys, Facebook and Kim Kardashian. Read on to learn how these relate to crypto.

1. Toy or the next big thing?

6 hours!

We were all forced to detox from Facebook, Instagram and WhatsApp for 6 hours during the outage this week. It got me thinking about how entrenched Facebook Inc has become in our lives and global business. When I created my Facebook account in college, my goal was to keep up with classmates…. and check out the ladies :-) Side note, my first contact with my wife was through Facebook. Thanks Zuck!

What first started as a toy used by teenagers has become a global phenomenon with 2.9 billion users each month. This “toy” produced $28.5B advertising revenue in Q2 2021. It is deeply woven into the fabric of our lives whether you live in Atlanta or Zanzibar.

A couple years ago, Chris Dixon of Andressen Horowitz, said that the next big thing will look like a toy. He gave the example of how telephones were dismissed in the 1800s because the technology was still clunky. Naysayers did not believe that businesses would ditch telegrams for telephones. They underestimated the rapid evolution of telephone technology. Today, 6.4 billion people have smartphones.

Along those lines, people who dismiss bitcoin ought to take a closer look first. What looks like a toy today could rapidly evolve and catch you unaware. Many folks erroneously focus on the volatile price of bitcoin without recognizing the game changing technology that underpins it. They do not recognize that there are thousands of sharp software engineers working on it. They get caught up in the FUD (fear, uncertainty, and doubt) in the news cycles but never study for themselves. Don’t be like that. Remain open-minded. Study for yourself. Then decide.

Chris Dixon “Why the next big thing in tech will look like a toy”. Listening time is 4 minutes.

2. Kim Kardashian and millennial millionaires

Kim Kardashian hosted SNL this weekend. Did you see it? Her family’s rise from the fringe of Hollywood to cultural icons would not have been possible a generation ago. The rise of new technology and platforms enables savvy people to create wealth in new ways. Today, Kim is worth $1.2 billion.

The portfolios of millennial and Gen Z millionaires increasingly look different from older millionaires. A CNBC survey found that 47% of younger millionaires have at least 25% of their net worth in digital assets like crypto and NFTs. On the other hand, 98% of baby boomer millionaires do not own NFTs and are not considering it.

This reminds me of how Warren Buffett famously missed investing in tech companies like Facebook. Don’t get me wrong, I am still a Buffett fan but I have recognized that it pays to be open-minded to new technology. It’s important to read widely and challenge the recommendations you receive. There may be newer, faster or just different ways to achieve your goal. I can’t wait to see the wave of new careers unleashed by crypto, NFT and Web 3.0. It’s already happening..

3. Number of Gen Z crypto users could 5x by 2025

All this talk about toys and younger millionaires got me thinking about Gen Z crypto adoption. I wanted to understand how many Gen Zers hold crypto today and what that could look like in 2025. So I did some back of envelope calculations then fired up a spreadsheet. Here’s where I landed:

  • Gen Z in 2021: 29.4 million users. I estimated the number of Gen Z crypto users in 3 ways ranging from 28.7 to 30.4 million users globally.

  • Gen Z in 2025: 147 million users. I developed 3 scenarios to assess what the Gen Z crypto adoption could look like in 4 years. My estimates ranged from 48 to 247 million users globally.

If you are curious or nerdy like me, you can flip through my analysis here.

I hope you have a wonderful week. Let me know your thoughts.