I was disappointed to hear the Oracle of Omaha call bitcoin “rat poison” at his recent annual shareholder event. Wasn’t it, after all, the same meeting where he admitted to missing the mark on both Google and Amazon? Digital currency may be volatile and risky today – a modern day Wild West – but my bet is changing consumer preferences will force markets (and regulators) to wrangle it into something more tame at some point.
Haven't we watched this movie before? A failure of older generations to recognize the impact of future ones, something that seems really odd given how many evolutions of change we can cite: The gramophone became a record player then a DVD and now it’s streaming music. The airplane became a jet, which spawned the space shuttle. The original mainframe morphed into a computer then a laptop, which gave birth to a tablet. Shopping used to only be done in physical stores but now a good deal of us prefer to do it online. And the stagecoach became a car, which will eventually become driverless. You get the point -- standing still isn't how the human race rolls. Not that any of it happened overnight; change is gradual until it’s sudden. So making strong declarative statements against any emerging technology without nuance or additional context seems hazardous, even for someone of Warren Buffett’s stature and admirable track record.
In my original blog, back in January, I touched on how changing demographics will impact financial services. But the reality is it holds sway in every sector – from retail to healthcare to manufacturing – which ultimately moves GDP. For example, a whitepaper published by the Federal Reserve Board of Governors in 2016, cites Japan’s aging population as a reason for their prolonged economic slowdown in the 2000’s. And a Wall Street Journal article published May 30, 2018 says the United States' own maturing citizens is likely to knock a full 1% off annual economic growth for the next three years at least. In short, a lot shakes when demographics shift and according to PEW Research, Millennials will outnumber Boomers this year. What's more, Neilsen data says Gen Z is now the single largest population segment in the world at a whopping 26%. Put another way, a new generation is replacing their grandparents, something that only happens every 20-25 years.
The implications are significant: Roughly half the population will have haptic memories of technology. Gen Y of the laptop and Gen Z the smartphone. Both cohorts are considered digital natives and keeping pace with them is no joke. Their attention spans are short, their expectations tall. And even though I harp constantly on the requirements of emerging generations, the fact is older ones (Boomers and Gen X) have high demands of technology -- Gen X especially - we just happen to be more patient about it.
It’s for this reason I feel it’s a trap for any age group to believe they did everything better than the ones before, although so many often do. My Gen-Z-aged boys didn't ask to grow up in a technology-ubiquitous-world, yet they are and soon enough they'll be in charge. The same way they prefer eGaming over traditional sports, it’s increasingly likely digital currency will be as normal to them as paper money is to my parents and bartering was in 6000 B.C., which is why I choose to keep my mind open to what's possible even if I'm not buying it today.
#Amazon #Disruption #DigitalCurrency #DigitalEcosystem #Demographics #GenZ #Millennials #WomenInTech #Bitcoin #WarrenBuffett #WealthManagement #FinancialServices #Blockchain #eGaming #eSports #GameChangers