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Bigtech layoffs, how much inefficiency

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Bigtech layoffs, how much inefficiency

As Arturo Bandini pointed out in a tweet a few days ago, the numbers relating to people who have been made redundant in recent times are truly impressive:

Amazon 18 mila

Google 12 mila

Target 11 miles

Microsoft 10 mila

Salesforce 8 mila

Twitter 4 mila

Forestry in Sicily 0

There are, on this earth, parallel worlds. Some follow the trend of the economy, others are totally detached from it. Or worse: their work contributes negatively to the performance of the economy itself. Will the public sector still be able to afford such levels of inefficiency for long?

The analysis

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Those who certainly cannot afford it are the crypto segment, hit very hard in 2022 by the global crisis and by the opaque and unsustainable models of many centralized companies. As we all know, the result has been an incredible death of companies (the latest being Genesis Trading, as already mentioned in my post at the end of the year), resulting in the loss of thousands of jobs.

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But what doesn’t kill makes you stronger. Thus, under the radar, there are many companies and DAOs which, having been able to resist the collapses mentioned above, are working hard to plan the new phase of the market. It will be the stage of maturation. The MiCA regulation will finally arrive in Europe: the final vote has been postponed to April, which is in any case just around the corner. And a finally regulated market will have to be counterbalanced by a more structured industry: more solid technologies, more sustainable services and, overall, greater efficiency. This last theme, efficiency, could be a strong distinctive element of the crypto industry in the near future if it is able to combine the basic characteristics of cryptocurrencies with a business model more focused on the “fundamentals”.

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Let’s take a step back and take a look at the world of banking and classic finance. It operates with fiat currencies, such as the euro and the dollar, issued and controlled by central banks. As such, fiat currencies are inflationary: when central banks “turn on the printer” the number of banknotes on the market increases, their value decreases and with it the purchasing power. An example? In 1963, the Beatles’ manager bought a pair of electric guitars for George Harrison and John Lennon, paying around £450 for them. Similar guitars today would cost twenty times more.

Another example closer to us? Ten years ago, it cost $650 or 12 Bitcoins to buy an iPhone. Today to take home an iPhone 14 you have to shell out a good 900 dollars but just 0.05 Bitcoin. All this in just ten years. On closer inspection, the ultimate goal of those who work in traditional finance is to limit the damage inherent in the inflationary nature of fiat currencies. There are millions of people around the world working to protect our savings. They invent all kinds of services and financial products to give us, at the end of the year, a result at least equal to the value of official inflation (and we all know that the real one, at least in this historical period, is at least double). Of course, these services and products cost money, because millions of people need to be paid fairly.

Future station

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On closer inspection, it is a colossal system of grandiose inefficiency. DeFi doesn’t need anything like that. Take for example Uniswap, the largest decentralized exchange in the world. It has come to transact the equivalent of over a billion dollars a day. It’s a protocol, a software behind which just about twenty people work: geniuses of mathematics and computer science without a doubt, but just twenty people. And if that billion a day were to grow tenfold or a hundredfold, there would essentially be no need for more personnel. The same is true for all the other subjects of decentralized finance: their efficiency is almost incredible when compared to that of classical finance. This, among other things, translates into laughable costs for those who use those services: a good example of how blockchain technology generates efficiency and value.

The question is legitimate: for how long will the global banking industry be able to turn a blind eye to all this? And two others are: if we add the next generation of AI to the blockchain (which, for example, will create complex software in a few seconds) what types of services can we ever have? And all of us, the millions who work in banks and software and just about everywhere, all of us, what are we going to do? The foresters, maybe?

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