I have a friend named Eric who heavily invests in various businesses and real estate. He's adept with numbers and possesses a knack for innovative thinking, leading him to success in numerous ventures. He owns multiple properties, runs several businesses, and enjoys a comfortable lifestyle with nice amenities. Recently, Eric shared a TikTok video featuring a young individual discussing purchasing a house at half its value using cryptocurrency.

Naturally, I clicked on the video. The TikToker explained that he takes half the home's price and stakes the equivalent in UST, earning a 19.5% APY on the Anchor protocol. I reassured Eric that this calculation is sound—19.5% APY is achievable with stablecoins and that the platform has been operational for nearly a year.

I offered to guide Eric through this process, explaining that, like any crypto investment, there are risks involved with the Anchor protocol. I told him it would take a few hours to familiarize him with DeFi. Alternatively, I suggested he could set up an account on Celsius in about 20 minutes to earn 8.5% on stablecoins, which he found more appealing.

Did I mention that Eric has considerable financial resources? He is now exploring the crypto landscape, stepping into non-traditional finance and the digital economy. Could it be that once Eric starts earning 8.5% interest—compared to the under 1% he gets from traditional banks—he might redirect more of his traditional wealth into the digital sphere? I believe so.

Speaking from personal experience, I've been gradually shifting my savings and earnings into digital formats over the past 18 months. Each day, the rationale for moving to digital grows stronger. Here are five reasons why you should closely examine the digital economy and universe.

Reason #1 - Financial Efficiency

Traditional finance is inefficient: it's slow, labor-intensive, fraught with counterparty risks, and often benefits a few at the expense of many. In contrast, the digital economy aims to establish a global framework based on science, rules, and planning. It offers speed, transparency, and opportunities for anyone willing to participate.

In the past year, I've earned more interest on stablecoins than I did from high-yield savings accounts over the previous 13 years combined, considering my savings account offers just 0.4% APY.

High returns serve as an enticing entry point into the digital economy. Eric's example illustrates how financially stable individuals are likely to transition their investments into this digital realm. It seems regulators and financial elites are aware of this trend, as evidenced by the significant penalties imposed on BlockFi recently. They recognize that they cannot fully control the decentralized digital economy and feel threatened by it. It's surprising that the SEC, tasked with protecting investors, targets a company that actually returns interest to its clients.

Ironically, once BlockFi's opportunity fades, those who have tasted the benefits of earning yield on stablecoins will seek other platforms. If BlockFi becomes unavailable in the U.S., DeFi options and centralized alternatives like Celsius, Nexo, and Vauld remain plentiful.

Reason #2 - Growing Necessities

In Southern California, the average rent for a two-bedroom apartment in Los Angeles is $2,600, while the median household income is $71,702 annually. This means that nearly 44% of pre-tax income is consumed by rent! A family of four can expect to spend around $750 for a day at Disneyland, not including parking, food, and souvenirs.

Even a simple trip to the movies for a family of four can easily cost close to $100, especially with concessions! The physical world is becoming increasingly unaffordable. Whether it's hotels, sports events, concerts, healthcare, travel, or dining, many find themselves unable to afford physical experiences and goods.

Consequently, people are turning to digital alternatives. Platforms like Facebook, Instagram, Twitter, YouTube, TikTok, Netflix, and Roblox are becoming essential for those who can't afford physical experiences. The top five most valuable companies in the U.S. are entirely technology-driven.

Reason #3 - The Digital Universe's Future Potential

What if I told you that in 15 years, we'll view platforms like Facebook and Instagram as antiquated, much like how my generation reminisces about online chat rooms from the 1990s? Facebook acknowledges this shift, evident in their rebranding to Meta and their pivot towards more innovative digital solutions.

Visa and Mastercard are actively trying to secure their positions in digital payments before they lose their current transaction monopoly. Banks and financial institutions are racing to establish digital asset infrastructures. What insights do they possess that the average person does not?

They analyze the data. The population is growing, and not everyone will have the means to own homes, drive luxury cars, or afford vacations. Meanwhile, screen time is on the rise. Today's online experiences are relatively basic compared to what they will soon become.

When vast amounts of capital are invested in developing a digital universe backed by a digital economy, rapid progress is inevitable. Consider the advancements in cell phone technology over the last two decades. Just two decades ago, spare phone batteries were a necessity, texting was nonexistent, and "smartphone" was an unfamiliar term.

Imagine attending a concert in virtual or augmented reality, exploring a museum from your classroom, or enjoying coffee in a whimsical digital forest alongside your friend's avatar—no matter where they are in the world. For centuries, books have served as a source of entertainment, education, and escape. The digital universe will blend these elements and more into a continuously accessible world.

Reason #4 - The Inevitable Rise of Technology

Human progress has been fueled by technological advancements. Our creativity and ingenuity have enabled our population to swell to nearly 8 billion, a stark contrast to the under 2 billion of a century ago. Innovations in medicine, agriculture, transportation, and communication have driven this growth.

Take a look at the traditionalists: Charlie Munger, at 98, views technology as a harbinger of doom. Peter Schiff promotes gold as the solution. Authoritarian regimes fear losing their grip on power. The forces resisting the digital economy stand to lose the most in a shifting landscape.

Conversely, those embracing technological change and the digital future are witnessing their fortunes improve. Historical examples illustrate this shift. Before the oil crisis of the 1970s, Japanese car manufacturers like Toyota and Honda were nearly nonexistent in the U.S. I remember when Blockbuster was ubiquitous in every town, only to become a cautionary tale in business studies. Kodak thrived for over a century but faltered as digital photography rendered film obsolete in less than a decade.

Reason #5 - The Power of Youth

Whitney Houston's hit song, "The Greatest Love," captures this sentiment perfectly: "I believe children are our future." We all aspire to create a better world for our children. However, the media often makes us feel guilty about our impact on the environment or having differing opinions.

Our youth, however, are discerning. They navigate through the propaganda that shaped previous generations. The digital universe and economy empower young people, bringing them together and enabling them to thrive in new ways.

Currently, a digital land grab is underway. Many older individuals remain indifferent or uninformed about these developments, focusing instead on their physical assets like homes and retirement funds. The landscape is vastly different for younger generations, who must adapt to a rapidly evolving world.

Perhaps I cannot own a physical Ferrari, but what if I could possess one in a digital realm, zipping along at 180 miles per hour without the risk of tickets or accidents? Maybe I can't afford a beautiful home with a view, but a digital residence near celebrities like Snoop Dogg or Ryan Reynolds sounds appealing. While I may not have front-row seats at a Jay-Z concert, I could still enjoy a digital experience without the hassle of traffic or crowds, getting the best view of a live performance.

Today's youth readily embrace the digital universe. For them, it will be an integral part of life, just like the telephone or the television.

Key Takeaways

We are living in exhilarating times. The shift from physical to digital is monumental, rivaling historical events like European colonization of the Americas or humanity's lunar landing. The possibilities are endless and inclusive for anyone who wishes to participate. The cost of entry is accessible to both affluent and less fortunate individuals. This landscape is continuously improving, becoming an everyday aspect of life.

You have the option to either embrace this digital transformation and enhance your life or remain rooted in a physical existence, largely determined by your origins and upbringing. For those eager about this journey, excitement is warranted! Conversely, if you're resistant to change, I encourage you to reevaluate your perspective and its foundations.

Thank you for engaging with this article. It has been a rewarding experience to write. I welcome any feedback or dissenting views in the comments. If you're interested in delving deeper into the digital universe and economy, consider following me. And if you found this article valuable, a clap would mean a lot, as it shows I’ve been heard!

Disclaimer: This article is not financial advice, and I am not a financial advisor. It solely reflects my opinions as someone striving to sustain and grow wealth for my family and myself. Always conduct your own research before making investment decisions.