What if crypto is to value as the internet was to information? It seems like crypto is changing the nature of value itself. Just as the internet enabled people to easily create and share information, crypto enables people to easily create and share value. The internet led to an explosion of information. Is crypto leading to an explosion of value?
Information is infinite. But what about value? Crypto enables the definition of value where it was not previously defined. It increases the percentage of all existing value in the world that is made quantifiable and tradable. It also facilitates the creation of new value by materially decreasing the friction inherent in value creation.
So what does this mean for legacy industries where value creation is much more difficult, for companies with market caps based on multiples of hard-earned profits from “real-world” business activities? The normalized use of revenue multiples (as opposed to earnings multiples) for valuing technology companies already moved us one step away from the tangible and towards a more abstract understanding of value. Dot-com boom era multiples based on non-financial, attention-based metrics like clicks perhaps previewed an even further abstraction more representative of what’s to come. Could crypto’s impact on value do to traditional companies what the internet’s impact on information did to traditional media?
The nature of value is evolving and it is hard to wrap your head around because it hasn’t really happened yet.
It’s still just starting.
JAKE
We're back with the 15th edition of our weekly digest, highlighting a few hand-selected pieces of writing over the past week or so. Check them out below & let us know which was your favorite...
@jesse writes about how the commercialization of crypto may seem like a departure from its original values, but by adapting to mainstream market pressures and finding a balance between ideological purity and practical compromise, there’s an opportunity for greater impact and influence on a larger scale. "Commercialization, especially that of open/permissionless software, is the form-factor that takes good ideas to their largest possible audience, and thereby makes the most impact on the world." https://blog.variant.fund/next-ten-years-smart-contract-blockchains
@jaredhecht.eth writes about how our online identities have become fragmented across multiple platforms and the growing need for a new digital home that allows people to express themselves and find others with similar interests. "Our homes have shattered and been thrown across the internet." https://jared.xyz/home-on-the-internet
@karima dives into how the future of crypto marketing hinges on embracing Creator-Generated Content (CGC) and User-Generated Content (UGC) to build genuine connections and drive mass adoption, shifting away from the unsustainable reliance on token-driven hype. "In a world overwhelmed by staged, artificial online experiences, consumers are demanding more genuine content." https://paragraph.xyz/@nottoolate/on-crypto,-content,-and-connection
Great set of recommendations, looks like my lunchtime reading is ready
https://paragraph.xyz/@jake/value-after-crypto
“money will flow like information”