What is the smart economy? A conversation with Lili Zhao from Neo Blockchain

What is actually valuable work? Two examples: housework and childcare. But these areas are hardly valued. But why, and what does this have to do with the smart economy?

At the BlockDown conference in Croatia, BeInCrypto spoke to Lili Zhao from Neo Blockchain about exactly this: the smart economy and what they already know.

Lily Chow’s photo

When we pay someone to take care of the kids and do the chores, that’s value creation. If we take on these tasks ourselves, don’t.

In economics, value is a measure of market transactions. That is, if it is a non-market transaction, it has no value. A very different example: the environmental damage caused by corporations creates problems for society. This also does not count. We call this economy negative externalities. So the benefit, the revenue, is recorded in the company’s balance sheet, but the costs are not, and they are borne by a third party.

Another example: a JPEG NFT image sold for $69 million. Does this have any value? It all depends on who you ask…

Here we see the influence of neoclassical thinking. Because in neoclassical economic thinking, value is determined by demand. Values ​​created by utilities, when there is demand for something because someone is taking advantage of it, there is value in it and the value is in the eye of the beholder. But in classical economics, value is determined more by cost. Production cost, cost card, raw material cost. So the cost is not random.

And to clear up the mess a bit, Lilly sums up the solution to the problem like this: We have to differentiate between value and price.

Value and price – two completely different things, right?

“I often talk about how value and price are two different things. Hence I have to say that the line between value and price is blurred, and they both influence the other. So you see value creation depends on value, but value capture depends on price. So it’s of interest Some companies blur the line between value and price. So they can justify the value they get by saying that they create value.”

Example from the financial sector: What happened during the 2008 banking crisis? At Investopedia we read:

Most of this drop can be attributed to the decline in net new bond issuance, which fell from more than $2.5 trillion in 2007 to a small positive number in 2008. Net new bank loan issuance also saw a significant decline of “only” 47%. However, in 2009, both net new bond issuance and net new bank lending were in negative territory.

So the bonds were sold on a large scale, a lot of money was made from them, but no tangible value was created.

Lilly goes on to say that economics has shifted this problem from physical to digital. This is where social media comes in – here we are the users who create value with our data and content. However, we usually don’t have anything of this added value.

Technological progress has led to more prosperity, but it has also widened the gap between the rich and the poor. Now let’s take another look at the smart economy.

Smart Economy: Between Value Creation and Value Acquisition

This is where this ultimate alignment between value creation and value capture occurs. The smart economy is powered by blockchain technology and allows us to code and own everything: experiences, emotions, moods, tweets, moments, laughter… Now is the best time to step into Web3 and the world of the smart economy to delve into it

According to Lili, the smart economy is based on digital assets, digital identities and smart contracts: “Thanks to the blockchain, everything works peer-to-peer. Above all, it is important that we have our own identity in the smart economy. Even when we move from one platform to another, we retain ownership of our digital identity. We can simply take our digital identity with us.”

This also simplifies processes such as KYC and the like. Do you want to change your bank? With a digital ID, this can be done with just a few clicks.

So the smart economy solves many problems at once. We can work more efficiently in the digital realm, gaining mastery over our data and redefining value creation.

Neo Blockchain has to contribute a part to this. The Neo Blockchain platform is equipped with the most comprehensive features for building decentralized applications. Neo allows developers to digitize and automate asset management through smart contracts. It also provides powerful native infrastructures such as decentralized storage, oracles, and domain name service, creating a solid foundation for the next generation Internet.

The vision behind this is to provide the digital infrastructure for the smart economy, making any asset, digital or physical, accessible to people and programs with minimal trust and permission.

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All information on our website has been researched to the best of our knowledge and belief. Press contributions are for general information purposes only. Any action the reader takes based on the information on our website is entirely at his or her own risk.

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