The Internet of Value | Bradley Kimes | TEDxCincinnati

Key Concepts

• Friction in Money Transfer: The inefficiencies, delays, and fees associated with traditional cross-border money transfers.
• Onchain Systems: Digital infrastructure designed to facilitate the movement of value, analogous to digital rails for information.
• Tokenization: The process of representing an asset of value (e.g., money, stocks, real estate) as a digital token on a blockchain.
• Internet of Information: The current internet, enabled by protocols like TCP/IP, SMTP, and HTTPS, which facilitates the rapid exchange of information.
• Internet of Value: A future iteration of the internet where value can be transferred as seamlessly and instantly as information, powered by new protocols for money.
• Digital Assets: Cryptocurrencies, stablecoins, and other digital representations of value.
• Central Bank Digital Currencies (CBDCs): Digital forms of a country's fiat currency, issued and backed by the central bank.

The Problem with Traditional Money Transfer

The speaker recounts a personal experience from years ago when running a small business importing from China. Sending money overseas via the traditional banking system was a "painful process" involving significant delays (5-7 days) and substantial losses due to fees and currency differences. This contrasts sharply with the instantaneity of sending texts or making video calls globally. The core issue identified is not just the slowness of money movement, but the "friction" inherent in the system.

Friction Explained: The Chain of Middlemen

Money transfers, especially cross-border ones, do not travel directly. Instead, they pass through a "long chain of middlemen," including banks, correspondent banks, and clearing houses. Each step in this chain:

• Takes time: Contributing to the overall delay.
• Skims off a fee: Leading to significant costs for users.

This friction forces international businesses to maintain large amounts of capital "trapped in bank accounts all over the world" simply to ensure smooth operations.

The Breakthrough: Onchain Systems and Removing Friction

The solution lies in new technology that removes this friction by building "onchain systems." These are described as "digital rails for money," enabling value to move as efficiently as information.

Examples of Onchain Systems:

• Bitcoin
• XRP
• Stablecoins

These systems allow for global and instant value transfer, mirroring the speed of information transfer on the internet.

Tokenization: Digitizing Value

The concept of "tokenization" is central to this transformation. It involves representing "something of value like money, stocks, real estate, even music rights" digitally. This digital representation, or token, can then be moved across the internet with the same ease as an email.

The Evolution from Internet of Information to Internet of Value

The speaker draws a parallel between the development of the internet and the emerging "internet of value."

• Internet of Information: Began with foundational protocols like TCP/IP (computer communication), SMTP (email), and HTTPS (websites), which collectively enabled the internet as we know it.
• Internet of Value: Is being built with "new protocols... for money itself."

Potential Impact of the Internet of Value

Just as the internet revolutionized entire industries beyond simply speeding up mail, the internet of value is poised to reshape financial activities:

• Remittances: Families sending money home will no longer lose a significant portion to fees.
• Small Businesses: Will benefit from faster payment clearing.
• Global Economies: Massive capital currently locked in traditional banking systems could be unlocked to fuel economic growth.

Current Progress and Future Outlook

This transformation is not a distant prospect but is "unfolding right now quietly in the background."

• Government and Central Bank Involvement: Experiments with digital currencies are underway.
• Legislative Action: Lawmakers are developing regulations to support this innovation, similar to how the internet was supported in the 1990s.

Historical Parallels: Connecting Humanity

The speaker emphasizes that major leaps in human progress have always been driven by "stronger, faster connections":

• Printing Press: Connected people with knowledge.
• Telegraph: Connected people with communication.
• Internet: Connected people with information.
• Blockchain and Digital Assets: Are now connecting people with "value itself."

Conclusion: The Present is the Future

The speaker concludes by asserting that the future of money is not a distant event but is already here. The inefficiencies of past money transfer methods, like waiting days and paying high fees, will become as anachronistic as dial-up internet. The question posed is, "Where were you when money finally caught up to the digital economy? Where were you when the internet of value was born?" The speaker positions themselves as being present and sharing this transformation.