This Is the Internet on Steroids

I returned a rental car to the airport here in Lisbon today… which is of no great importance other than allowing me to state that I took an Uber back home, and to ask you this question: What’s the path between me paying for my Uber and my Uber driving collecting the money he’s due?

That question is the meat of today’s dispatch, and, more importantly, stands at epicenter of a financial world that will soon look identical to today’s financial world. However, it will be entirely different.

Odd as that sounds, it’s entirely accurate.

Back in late-October, I was in Amsterdam at the Solana Breakpoint conference, which is to the Solana crypto blockchain what the Worldwide Developers Conference is to Apple—the big, annual geek-out for fanboys and developers. Early on, I circled one particular event: a talk in which representatives from credit-card giant Visa and global payment network Worldpay outlined their respective employers’ vision for the future of money.

Which means our future using money, and the fundamental shift that will change the way our money moves. There’s profit opportunity in that, by the way.

And that gets me back to my question about the path money takes between me paying for an Uber ride, and my Uber driver collecting his pay plus the tip I left.

I paid with a credit card embedded in my Uber app. Though that process is all digital, the fundamentals of that process haven’t really changed over the last half-century or so. It works like this:

1. A bank issues me a credit card.

My Uber account is linked to my American Express. So, AmEx is the bank in question in my case.

• The transaction flows across a payment network.

Generally, a day after you authorize a payment, your card’s issuer will send your payment to a card network.

AmEx runs its own payment network, so my Uber transaction moved across the AmEx network. Other card companies, such as Visa and Mastercard, use other networks.

• A payment processor receives the money.

The card network attaches a €20.63 charge to my credit card (a debit I owe at the end of the month) and sends a credit to Uber by way of a payment processor.

• The merchant gets paid.

The payment-processor settles the trade and Uber’s account is credited with the €20.63 I paid. Uber then turns around and disperses some of that to the driver.

All of that seems like a very straightforward, four-step path from me ordering an Uber at the Lisbon airport to Uber getting paid.

Alas, the process takes a couple of days, and is slowed even more on the weekends, when financial institutions are closed.

For 50 years or so, the system has worked well, processing between $25 trillion and $30 trillion in annual payment volumes globally. The entire world economy is about $100 trillion, so you can see the enormity of credit-card payment-processing.

Still, for all its success, the system has its flaws—namely speed and efficiency.

Why should AmEx dumping my transaction onto the payment network take a day? Why should weekends pour molasses into the process of transactions? I mean, it’s not like banks and payment networks need Bob the Bean Counter to manually approve every transaction.

Enter crypto and a message I’ve been sharing for many a month now, and which is increasingly rising to the forefront of banking and personal finance.

Blockchain networks such as Solana and others offer a way for companies such as Visa and Worldpay to bring far greater efficiency to the path between steps 2 and 3, and 3 and 4.

On Solana, a payment processes in the blink of an eye.

Assuming I’d been able to pay my Uber fare on the Solana blockchain, the transaction would have processed and cleared within seconds of the driver alerting Uber that he has successfully delivered me to my destination. Literally in the length of time required for me to open the taxi door, step out, and close the door, the transaction would have completed.

Then, the €2 tip I authorized as I was walking up the stairs to my apartment would have landed in the driver’s digital wallet before I could get the key in the lock of my third-floor door.

Uber would have received my payment just as quickly, without any need for a middleman in the process.

That speed is payment efficiency.

As for cost: Doesn’t matter if the fare was $1 or $1 trillion, the transaction cost would have been the same: fractions of a cent. On average, it’s about $0.0002 on the Solana network, meaning you’d have to hail 50 Ubers before you’d pay a full penny in transaction fees.

All of this is important because the financial world you and I grew up with is rapidly racing toward a blockchain future, precisely because of the speed, efficiency, and cost savings.

As I’ve noted elsewhere, internet use cases exploded over the last 20 years not because the masses wanted a quicker way to share cat memes, but because businesses and tech developers saw ways to increase efficiency and reduce costs.

Blockchain efficiency and cost savings is the internet on seven kinds of steroids.

JPMorgan Chase, Visa, PayPal, Goldman Sachs, American Express, too many regional banks to name, too many foreign banks to list, the New York Stock Exchange, Nasdaq, Fidelity, BlackRock, Vanguard, sovereign financial authorities in places like Singapore, the European Union, China—so very many more countries and companies—are all right now embracing blockchain technology.

Which means you and I will be embracing blockchain technology in our personal financial lives sooner rather than later. Whether we’re happy about that or distrustful won’t matter. Luckily, we won’t necessarily know we’re interacting with the blockchain because financial-services providers will make the processes seamless and painless.

But blockchain will be the technology running the engine.

And that’s the opportunity here.

If the financial word is moving to blockchain, then we as investors should be looking to the blockchain for investment riches. Those opportunities will spring from various cryptocurrencies that run various networks across the blockchain—upon which a gargantuan volume of transactions will flow.

I won’t spell out here which cryptos will benefit the most in this dispatch. You just need to understand why I say Crypto X will do well and not just see a name absent any context. I might instead put together a special report.

Still, I wanted you to see a real-life example of how blockchain will upend 50 years of status quo.

What’s coming will be so revolutionary that it won’t change what we do, but it will fundamentally change how we do it—even if we never actually see it in action.