Chamath Palihapitiya, the billionaire venture capitalist, stated that one sector of the crypto industry could prove useful in monetizing all assets and making them a part of the blockchain.
The Social Capital CEO thinks that asset holders will eventually find a means to tokenize their possessions.
DeFi Could Financialize Everything
Economic leakage refers to income or capital that escapes the system. Palihapitiya explains that this leakage occurs on a regular basis because asset holders fail to monetize what they have. With DeFi, he adds, all assets can be financialized. This includes homes, cars, jewelry, art, and even a career.
The benefit of doing so is that it allows the holder to borrow against it, increase its value, or trade it. In his opinion, people who put their assets on the blockchain won’t have a problem with the associated taxes. That’s because doing so will help them generate impressive revenues.
Assets on the Blockchain Can Be Tracked
Putting assets in the blockchain also makes them easier to track, says Palihapitiya. This, he explains, shouldn’t be a problem as the assets will be physical, making the process much more legitimate. Moreover, he considers that people would be willing to pay taxes if it would mean that they could monetize more of their assets. In the expenses versus revenue argument, it’s likely that asset holders will consider how much money they can make instead.
Monetizing Assets Through the Blockchain – Beyond NFTs
While there has been talking about how the blockchain could help monetize digital assets such as NFTs, the discussion surrounding physical assets has been limited. But this isn’t the first time Palihapitiya has made statements on the crypto sector. Just a few months ago, amid heated discussions about crypto regulation, he explained that Bitcoin should be regulated as a security.
Despite recognizing that Bitcoin isn’t a security, he considers it important to regulate it as such. The reduced reason, he says, is the massive size of the industry. He described the crypto landscape as being prone to significant risk due to the lack of regulation. But unlike regulators, Palihapitiya is on crypto’s side. Having been a supporter of blockchain as early as 2013, he’s now worried about what the future has in store for Bitcoin.
Crypto Use Cases beyond Currencies
Since cryptocurrencies first came about, they have had numerous use cases. The most prominent, in 2008, was that it would replace regular fiat currency. When the rate of adoption wasn’t high enough for Bitcoin to reach that status, the argument was that it acted as an inflation edge. However, now that inflation is at 8.3 percent in the US, Bitcoin prices should he skyrocketing. Although trust in crypto is still high, developers should look beyond the surface to come up with unique uses for cryptocurrencies and blockchain technology.