As business owners, managers, and decision makers, we strive to keep up with the latest technologies that might impact our industries. And if you’re a parent, you’re simply trying to keep up with your child’s technological skills.

By now you have probably heard the phrases ‘Web 3.0’ and/or ‘Metaverse,’ the latter being the driving force behind Facebook’s rebranding as ‘Meta.’

To understand Web 3.0, a brief history of the web is helpful.

In 1989 a computer scientist named Tim Berners-Lee created the World Wide Web while working at CERN laboratories. Originally developed to help scientists and Universities share information, in 1991 Berners-Lee released his WWW software to the public. 

Enter the age of the modern web…

Web 1.0

This was the first publicly available stage of the internet. 

The main goal during web 1.0 was to connect people to information, but there were very few content creators at that time. 

Also, almost all websites were static vs. dynamic, and they were read only.

To the delight of everyone, during this period the first search engines went online, allowing users to search the web for information as opposed to typing in the specific URL address. 

Web 2.0

Welcome to age of amateur content creators!

What began as simple blogs, quickly transformed into global media giants such as Facebook, YouTube and Instagram.

As mentioned above, web 1.0 connected people to information, but web 2.0 connected people to people.

During this period, we also saw the creation of apps and platforms, such as WordPress and Squarespace, which enabled the self-creation of websites. 

The internet truly became mainstream during web 2.0, now hosting 1.8 billion websites.

Website Timeline

Year	# of Websites
2021	1.8 billion
2011	346 million
2001	29.5 million

Web 3.0

What web 3.0 will look like depends on who you ask, but the general idea is the implementation of decentralization and artificial intelligence. Say goodbye to mega-corporations controlling your data, owning your information, and surveilling your habits. 

Just as decentralized crypto currencies are disrupting finance, web 3.0 will be a disrupter of the internet as we know it. 

When referring to a decentralized version of the internet, it means that data storage will be handled by millions of computers linked together worldwide using open-source blockchain networks. This version of the web was originally coined the ‘Semantic Web’ by Tim Berners Lee.

On the artificial intelligence front, to some measure it’s already arrived. When you go on Amazon, advanced algorithms deliver customized shopping suggestions to you. With web 3.0, using superior artificial intelligence, those searches and results will be more powerful and more advanced. Keep in mind Moore’s Law: Gordon Moore’s perception that the number of transistors on a microchip doubles every two years, while the cost of computers is halved.

Also fundamental to web 3.0 is the adoption of Augmented Reality and Virtual Reality. These topics are addressed below in the Metaverse.

Metaverse

Welcome to a new virtual reality where users interact in a
digital world.

In this new world you will no longer search for your favorite clothes online in a 2-dimensional format using drop-down tabs on a website. In the Metaverse, your digital avatar will walk through a 3-dimensional clothing store, browsing aisles and choosing 3-dimensional items from sample racks.

Do you dream of owning a sprawling estate with a handpicked art gallery, but don’t want to handle any of the upkeep or travel to get there? No problem, buy it all in the Metaverse. Simply pay for it with your favorite cryptocurrency, and escape to your virtual world from the comfort of your living room. Everything will get recorded on the blockchain and is yours until you decide to sell, hopefully for a profit! Invite friends over to see your one-of a-kind art collection of NFT’s (Non-fungible tokens) which you exclusively own. For more on NFT’s, be sure to read the Q2 edition coming out on June 15.

Why is This Important…

Disruptive technologies often create new headaches, and new opportunities for business owners. Our job is to leverage these changes while out-thinking and outperforming our competition. Questions we should be asking ourselves:

• What technology investments will be needed to stay competitive?
• Do we need to rethink our short and long-term plans?
• Does this technology create new business categories we can capture before the competition?
• Are we keeping an eye out for new businesses which might be strategic partners or investment opportunities?

These next few years are going to be filled with new challenges and new opportunities. Plan now for the future… Stay vigilant, stay focused, and stay ahead of the competition.

As 2021 recently came to a close, Saratoga County saw tremendous growth and bounce back from the impact COVID-19 had on the economy just last year. County sales tax collections saw double-digit percentage growth in 2021 compared to both 2020 and 2019. Unemployment rates hit a historic low due to a reduction in the labor force. Demand for hotel rooms grew in 2021 compared to 2020, indicating tourists are beginning to return to the county.

Saratoga County Sales Tax Collections Rising

Saratoga County sales tax collections totaled $152.9 million in 2021. As shown in the chart, this was more than 19% higher than 2020 and nearly 18% higher than 2019. Local government sales tax collections in all of New York were up 19% for 2021.

“While local sales tax collections were robust as the economy rebounded from the pandemic, some of that growth is attributed to inflation, which was the highest it has been in over thirty years,” said NYS Comptroller Thomas DiNapoli.

The City of Saratoga Springs collected $14.7 million in sales taxes in 2021, up 32.5% from 2020. These collections cover a range of items from retail purchases to gasoline, lodging, construction materials, cars, boats, etc.

Saratoga County and the Region’s Labor Shortage Clearly Visible

According to the New York State Department of Labor, the four largest counties in the region — Saratoga, Albany, Rensselaer, and Schenectady — saw unemployment rates drop to historic lows.

But this is not just a result of employment growth. Instead, the region’s labor force declined by 2.9% in one year as there are now 13,000 fewer people working or looking for work.

“The Labor Department’s data goes back to 1990 and 2.2% unemployment is the lowest for Saratoga County ever,” said Todd Shimkus, president, Saratoga County Chamber of Commerce. “I wish this was because people were finding new jobs. But the reality is that our labor force is shrinking as the baby boom generation retires and more people choose to stay at home to care for their families. The shortage of labor is hurting every sector of our economy locally.”

Leisure Market Drives Hospitality Sectors Success

Demand for hotel rooms in Saratoga Springs increased in 2021 versus 2020 by 44 percent. This was driven by the fact that the City’s major attractions, SPAC, Live Nation, the Saratoga Casino and the Saratoga Race Course were allowed to open this past summer.

The average daily rate for a room in 2021 was $173.44. This was higher than 2020 and 2019.

“Rate was the good news,” said Darryl Leggieri, president, Discover Saratoga. “The average daily rate helped us salvage a respectable year. 2021 was a nice rebound year after a terrible one in 2020.”

Closed Sales and Median Sales Price Highest in Saratoga County

According to information released by the Greater Capital Association of REALTORS, 2021 was a very good year for the area’s residential real estate sales market. Of the area’s four largest counties, Saratoga County led the way with 3,466 closed sales, up 8.4% versus 2020. The median sales price for a new home in Saratoga County was $348,000 in 2021, up 11.5% from 2020. 

By comparison, Albany County had 3,244 closed sales, up 6.4%; Rensselaer County had 1,698 closed sales, up 4.8%; and Schenectady County had 2,317 closed sales in 2021, up 19.2% from 2020. The median sales price in Albany was $265,000 compared to $237,850 in Rensselaer County and $$212,000 in Schenectady County for 2021. The median sales prices in all four counties increased by double digits, from a low of 10.4% to a high of 11.8%. 

A deeper dive into Saratoga County’s local market shows the median sales price of homes sold in 2021 increased versus 2020 not just county wide, but in Clifton Park, Halfmoon, Malta, Saratoga Springs, and Wilton/Gansevoort. The Town of Clifton Park, Halfmoon, and Malta saw median prices right around $350,000 in 2021. Meanwhile the median sales price of a home in Wilton and Gansevoort was $365,000 in 2021 and $480,000 in the City of Saratoga Springs. The largest increase in median sales price was in Halfmoon where prices rose 18.3%.

The increase in closed sales and median sales prices demonstrates this is a seller’s market. This is especially true as the number of new listings declined in 2021 versus 2020 by 13 percent across Saratoga County. Likewise, the number of days on the market decreased by 35% and the percent of the original list price received topped 100%. 

Looking Forward Into 2022

Let’s get the bad news out of the way first. Inflation is on the rise while employers struggle with an unprecedented labor shortage, not just locally but across the US and many parts of the world. Through the monthly compilation of this Insider’s Report, the Saratoga County Chamber will monitor and share local sales tax and labor force data that might help readers to see how these two trends are impacting our local economy.

For the optimists among us, Saratoga County remains a popular place to live, work, play and visit. Locally, all of us at the Chamber – – and many of the small locally owned businesses we promote – – have been incredibly thankful for the tremendous effort by so many of our neighbors to shop and buy local throughout the pandemic. We hope these purchasing trends will continue because saving our local businesses is one of the best ways, we can all sustain the incredible quality of life we have here.

Local hotels report strong advanced bookings for vacations in 2022, and the Saratoga Springs City Center is expecting the return of even more conventions, meetings, and events. NYRA is planning for a full 40-day race meeting; SPAC for a full return of its Jazz Festival, the New York City Ballet, and the Philadelphia Orchestra; and Live Nation appears poised to have one of its largest concert schedules in years.

Saratoga County Chamber of Commerce

The Saratoga County Chamber of Commerce offers entrepreneurs and small businesses: FREE in-person and virtual business counseling; free talent recruitment services; access to the only Saratoga County focused monthly economic update; boosted posts on our largest in the region social networks to amplify local news, products, services and job openings; health insurance; and local networking.
518-584-3255 | saratoga.org

Capital Region Chamber of Commerce

Build connections, gain knowledge, generate business, and be part of our collective influence for businesses and people to thrive. The Chamber helps build a strong community by connecting our members to people, business and issues important to business success. Through the Chamber, you and your business are engaged in initiatives that move us toward a successful future.
518-431-1400 | CapitalRegionChamber.com

Business Council of New York State

The leading business organization in New York State, representing the interests of large and small firms throughout the state. 111 Washington Avenue, Suite 400, Albany, NY 12210 | 518-465-7511 | bcnys.org

Business Mentor NY

For entrepreneurs, turning a passion into a business is the ultimate dream. But that dream doesn’t come easily. Fortunately, entrepreneurs don’t have to go it alone. Business Mentor NY is a free, easy-to-use social network that allows entrepreneurs and volunteer business mentors to connect so they can solve problems and build businesses together. bmny.micromentor.org | support.businessmentor@esd.ny.gov

Empire State Development

New York’s chief economic development agency. Through the use of loans, grants, tax credits and other forms of financial assistance, Empire State Development strives to enhance private business investment and growth to spur job creation and support prosperous communities across New York State.
625 Broadway, Albany, NY 12207 | 518-292-5100

New York State Contract Reporter

The New York State Contract Reporter is an online publication of procurement opportunities with New York State agencies, authorities, public benefit corporations, and many municipalities.  The Contract Reporter is an essential tool for selling your product/services to New York State government. nyscr.ny.gov

New York State Department of Labor

518-457-9000 | dol.ny.gov

New York State Directory of Small Business Programs

Helping NYS business build back. Find out more about Business Pandemic Recovery Initiative programs – including $800 million in state funding for small businesses – and about rental assistance for tenants. esd.ny.gov/business-pandemic-recovery-initiative

New York State Energy Research & Development Authority (NYSERDA)

NYSERDA offers objective information and analysis, innovative programs, technical expertise, and support to help New Yorkers increase energy efficiency, save money, use renewable energy, and reduce reliance on fossil fuels. 518-862-1090 | nyserda.ny.gov

New York State Minority & Women Owned Business Enterprise

esd.ny.gov/mwbe-new-certification

Pursuit

Access more than 15 small business loan programs custom-fit to your needs, including SBA 504, SBA 7(a), and SBA Microloans. You’ll work one-on-one with a lender dedicated to understanding your business and your borrowing needs.
800-923-2504 | PursuitLending.com

SCORE

38 local SCORE volunteer mentors help small businesses and entrepreneurs start and grow their businesses. SCORE is a nonprofit and all services are free and confidential.
Contact: Richard Sellers | richard.sellers@scorevolunteer.org

Our region is home to a growing base of public and private businesses including many in the cutting-edge technology sectors. 

On the public front (companies whose stock is publicly traded,) we explored the performance of 5 local companies: Angio Dynamics, Arrow Financial, Espey Manufacturing, Plug Power and Quad Graphics.

Angio Dynamics, Inc
Symbol: ANGO
14 Plaza Drive, Latham, NY 12110
About: Creating disruptive and innovative medical devices, Angio Dynamics provides healthcare professionals with the tools they need to deliver high-quality patient care and improve patient outcomes.

Arrow Financial Corp.
Symbol: AROW
250 Glen Street Glens Falls, NY 12801
About: Arrow is a multi-bank holding company based in Glens Falls, New York, which includes Saratoga National Bank. Arrow provides banking and insurance services across northeastern New York.

Espey Mfg. & Electronics Corp
Symbol: ESP
233 Ballston Avenue, Saratoga Springs, NY 12866
About: Espey designs, develops, tests and manufactures specialized Military and Rugged Industrial Power Supplies and Transformers for use in harsh or severe environment applications.

Plug Power Inc.
Symbol: PLUG
968 Albany Shaker Road, Latham, NY 12110
About: Plug Power is a leading provider of clean hydrogen and zero-emission fuel
cell solutions that are both cost-effective
and reliable.

Quad Graphics Inc.
Symbol: QUAD
56 Duplainville Road, Saratoga Springs, NY 12866 (Local Plant)
About: A leader in the industry, Quad Graphics is helping clients stay competitive through multi-channel integration including print, media, in-store packaging, marketing strategy and marketing management.

These days it seems like Bitcoin is everywhere; you hear about it on TV, on the internet and on the lips of everyone who has been involved with it since 2017. And for good reason: an investment in Bitcoin has beaten every single other asset class in the last 4 years in terms of growth and adoption. An investment in Bitcoin in 2019, when it was valued at $3,700, would yield a 1,864% return on investment in 2021 when it reached the high of $69,000. And it’s still not done climbing. Mention these numbers to any fund manager and you’ll see them turn green with envy as they try to explain the risks of such as asset.

In the short term, Bitcoin IS a risky asset class. It has seen price declines between 75% and 90% over very short periods of time (3 – 4 weeks). In fact, as I composed this article I watched Bitcoin lose 50% of its value. This can be very jarring to your average investor without the stomach for such volatility or the understanding of what Bitcoin actually is.

So what IS Bitcoin? Bitcoin is something new. It’s difficult to liken it to any existing asset types. Some say Bitcoin is like gold. While that’s partially true, it has much more utility than gold. Gold is heavy and cumbersome and doesn’t transport easily, so traveling with your wealth in gold isn’t easy, but Bitcoin only requires a USB key to allow you to transport hundreds of millions of dollars. Others say Bitcoin is like money. Yes that’s also partially true, assuming vendors are willing to accept it as currency, and many are using it that way. Still others have classified it as an asset, like a house or stocks. In fact, the US tax system treats it that way, with gains/losses being classified as Capital Gains/Losses and taxed accordingly. However, Bitcoin hasn’t been as tightly regulated as stocks and enjoys some of the tax loopholes that have been closed around stocks and real estate. I like to think of Bitcoin as Financial Freedom for the citizens of the world. 

Bitcoin transactions between two private parties transcend borders, countries, and laws that may otherwise exist between the parties in a traditional Fiat transaction. (Fiat is the term used to describe what we all know as government issued currency such as the US Dollar or the European Pound or Chinese Yuan). Currently, when I want to buy goods or services using the US Dollar, I need to “ask” for permission from my bank to transfer the sum of money to the vendor in order to purchase the services I want. This has been refined into a fairly smooth process in the US with the use of credit cards, cash, and most recently through apps such as Paypal, but ultimately the bank holds my wealth, and therefore is in control of my wealth.

In 2008, financial institutions played fast and loose with our money by underwriting risky mortgage holders which led to a real estate market bubble. That bubble eventually burst and revealed the dangerous actions the institutions had undertaken, leading to the great recession. To combat this, President Obama launched several quantitative easing programs that helped prop up the market with free cash, but in turn raised our national debt more than all the previous presidents combined. All of this was possible because we had handed over control of our wealth to a handful of people we “trusted.”

Bitcoin was born from that chaos like a phoenix rising from the ashes. The inventor, known as Satoshi Nakamoto, wanted to take money out of the control of governments and put it back into the hands of the people so that we were no longer subject to whims of greedy individuals. Through the distributed nature of the internet, Satoshi was able to create a new network layer that sits on top of the internet to facilitate such permission-less transactions between two parties. Due to the international nature of the internet and the usefulness it has given to communication and e-commerce, Bitcoin is able to take advantage of that same usefulness and apply it a new field: Digital Finance (DeFi).

Bitcoin and other digital currencies now allows us to conduct financial transactions with the same ease and flexibility as sending an email or one swipe ordering from Amazon. Imagine being able to mortgage a house without the need to go to a bank, or fund a business idea without the need for shareholders. This has already been done with DeFi and this new field is just getting started. That’s the freedom Bitcoin can bring to the world of finance and to everyday people.

While Bitcoin only exists on the internet, Saratoga businesses can take advantage of its benefits even at the local level. Even though Bitcoin adoption is still relatively small, there are already millions of users. The novelty of Bitcoin may wear off someday, but today it is very much in the spotlight and users of Bitcoin love to find places where they can spend their currency. Being able to accept Bitcoin will open a business up to newcomers looking to spend their coins in novel ways.

Novelty is cute and all, but being in business means that everything we do affects our bottom line and Bitcoin can help you there as well. Since Bitcoin is a decentralized network and not a central bank, the fees for money transfers are very low and are shifted from the receiver (the business) to the sender (the customer). Yes, it’s true! Businesses that accept Bitcoin no longer need to pay the 3% fee that they are charged by credit card companies and that can have a huge impact on small margin businesses.

Another, albeit riskier, proposition, is a business opting to hold some of their net profit in Bitcoin, rather than converting it all to Fiat at the point of sale.  Since its launch in 2009, Bitcoin has seen exponential growth in value, going from less than $1 per coin to an all-time high of $69,000 in 2021.

This may seem like “gambling with your profits” on a risky asset class, but I have two points to make about that: one, there are many large companies that are entering the Bitcoin world and holding a portion of their portfolio in Bitcoin. Even entire countries have started to look at Bitcoin, with El Salvador leading the way in 2021 when it announced that Bitcoin is now considered legal tender throughout the country. This adoption by more and more companies will remove today’s risk factors.  Two, the free money monetary policies the Federal Reserve has enacted and upheld for over a decade has led to some of the highest inflation numbers I have ever seen in my lifetime, which means the buying power of the US Dollar is eroding and the profit being held by businesses is no longer as valuable as it once was. Since Bitcoin is deflationary in nature, it will protect against that erosion.

At the time of writing, Bitcoin’s Market Capitalization is $660 Billion. That’s a lot. But it’s a paltry sum compared to the size of the markets this technology could overtake.  In its simplest form, Bitcoin is an easy way to store value and send that value across the world within minutes. Another good store of value is gold and if Bitcoin were to take the place of gold as said store of value then its market cap would be closer to $11 Trillion and Bitcoin would be worth $647,058 each. That’s a 10x growth from its previous all-time high and a 20x growth from where it is today.

Like gold, Bitcoin has a limited supply: there will only ever be 21,000,000btc in circulation. This was purposefully done by Satoshi in an effort to make Bitcoin a deflationary asset, contrary to the inflationary nature of Fiat. To put that into perspective, there are 23,000,000 millionaires in the US alone and 56,000,000 in the world, which simply means that if every millionaire wanted 1 Bitcoin, it would not be possible to fulfill that demand. In fact if each millionaire in the world wanted an equal share of Bitcoin then they would only be able to have 0.375 btc each. When looking at these numbers you can start to see the potential Bitcoin has in the coming decades, even just building a small nest egg in Bitcoin could result in substantial future gains.

Bitcoin can be divided by 8 decimal places. The lowest unit of Bitcoin is called a “Satoshi” or “Sat”. One sat is 0.00000001 Bitcoin equal to $0.00034. This means that any amount of USD can be invested into Bitcoin, you don’t need to invest in a whole coin which is worth $37,000 as of this writing.  $100 will get you 0.00294118 Bitcoin or put another way 294,118 Sats.

Everything in life has a learning curve for us to go through before we feel comfortable with it. Email and online shopping both went through their periods of anxious adoption by the masses. In the early days of email, people didn’t know how to use it, some believed you still needed stamps, and others thought you needed to send it from the post office. Online shopping was rife with stories of stolen credit cards and lost packages. But those anxieties were overcome and new money making markets emerged. Bitcoin is no different; once you understand it and work with it, a whole new emerging market rife with innovation will open up to you.

NEXT EDITION

Digital Finance is the next step in the internet’s evolution, and platforms like Bitcoin Lightning (Layer 2), Ethereum (The world’s super computer) and Solana are working hard to make these digital financial products as accessible to everyone as email, and one click shopping, are to us today.