Crypto is not a fad, scam, or get rich scheme. Crypto marks our inevitable entry into a new economic era. Today, we live in the elaborate remnants of an industrial economy — and yet we’ve entered an information age in which data can be considered the most valuable asset in the world. Crypto and decentralization mark our collective historical movement into a new economy: the Information Resource Economy.
The Sorry State of Crypto Conversations
One of the most frustrating aspects of working in crypto is the madness and inanity of its public discourse. On the one hand, there are the old worlders of mainstream media and the government saying all kinds of false things. On the other hand, there are the crass get-rich crypto folks—When lambo?! is one of their favorite declarations—who only see it as a way to make more of their national currency (aka “fiat” currency). Both miss the point: crypto is an inevitable historical shift with the power to reorganize civilization itself.
→ Mainstream Myths About Crypto
- Crypto is for money laundering! Sure, sometimes it is. But I hate to tell you: more laundering goes on with US dollars through corporate shell accounts sanctioned and fostered by the state and its banks. Plus, with crypto there’s always a trail so what are the Feds complaining about?
- Crypto is bad for the environment! Well, printing US dollars uses more electricity than, say, bitcoin. And while bitcoin mining is energy intensive, it also incentivizes miners to be efficient and use alternate energy sources. Which they do—if you care to actually look at the facts.
- Crypto is a scam! This one is confusing. No doubt, there have been crypto scams—token sales without a product that disappear once the sale is over. But there have always been scams in every field and currency—including US dollars. Crypto is not inherently a scam. Like any purchase, buying crypto takes some due diligence by buyers. But the fact is crypto is more certain and transparent than any national currency. While US dollars are controlled by a few unelected people in back rooms who print money whenever they want and give to whomever they want—banks—crypto has code that is open to all. We know exactly how many bitcoin are in the world and how many there will ever be. Can you say that about US dollars?
→ The Insanity of the Crypto Community
- Obsession with price. Price is the least interesting aspect of crypto! Too many crypto folks view it as an investment, a way to earn more of their national currency (fiat). But crypto is not primarily a speculative instrument; it’s a transformative technology that has the power to fundamentally reshape civilization by reorganizing the creation and distribution of value created by information—as well as attention (looking at ads, movies, media) and engagement (posting content on sites).
- The lambo moonshot thing misses the whole point. People who made millions on bitcoin then sold it for US dollars—or whatever their national currency is—and then brag to the world on social media as they show off their Lamborghinis do crypto a great injustice. They believe that all that matters is making more fiat when crypto gives us the ability to re-craft civilization itself so that no one, anywhere, is ever poor again.
- Jargon, jargon, jargon. Speaking “inside baseball” only hurts the industry as people hear it and assume that crypto is not for them—when the very point of decentralization is that it’s for everyone, not just oligarchs. (I wrote about jargon in crypto here.)
Crypto Marks a Radical Historical Shift Dwarfing the Internet
So what is crypto? It is to money what the internet is to information and communication. Before the internet, information was created, controlled, and distributed through a few anointed sources—big newspaper, network news, film studios. After the internet, anyone can create and distribute a film, be a journalist, share their opinions (for better and worse).
Crypto does that with money. Before bitcoin, there was only one source of money—the government—and only one financial system, namely, global banking. They controlled the creation and distribution of money. (Ever try to buy something with your debit card and been denied by your bank? How can they do that—it’s your money, right? Wrong: it’s not your money if you can’t spend it and move it around as you want.) Thanks to bitcoin and the thousands of other cryptocurrencies, each with a different value proposition, anyone can create and distribute money.
This is the rise of the Information Resource Economy. Our dominant banking system is premised on a petrol or precious metal economy—things that are scarce and so imply geopolitical involvement (that is, war). But, thanks to the internet and its proliferation of information, data can now be considered the most valuable asset in the world. There’s a reason social media and search engine companies dominate the stock market: they’re extracting all the value from our information just as oil companies extract oil from the earth—but it costs exponentially less to extract data than to extract oil from the ground. Which is why it’s no longer ExxonMobil at the top of the stock exchange.
There is a vast categorical difference between oil and information—so we need financial systems that suit an information economy.
- Oil is scarce and expensive to extract, process, and ship. (And because it’s in the ground, it’s always geopolitical: nations bomb others to secure the oil for oil companies.)
- Information is abundant, regenerative, and is created and shared at near-zero marginal costs. (And has no real geopolitical implications, no reason to bomb anyone.)
- And yet all that tremendous amount of value unleashed by the internet revolution continues to operate in an extractive financial system. All that value flows to the few execs and investors at the top. Meanwhile, it’s our data, our attention, our engagement! Yet we receive no value from it.
- Even if, say, Facebook wanted to share the value with its end users—the people who created the value in the first place—it would be prohibitively expensive thanks to our centralized financial system.
- Such is the incommensurability of our information systems and financial systems: information, attention, and engagement flow continuously from individuals but the wealth only flows upwards to those at the top. Our problem is a structural problem—and crypto and decentralization solve it.
Crypto allows us to point the tremendous value generated by decentralized information and currency wherever we want.
Right now, all this new value goes to a few owners of large businesses—even though it’s all of us who actually create the majority of that value. Sure, these companies built the platforms. But after their return on investment, why do they continue to extract so much wealth from us and keep it for themselves? Yes, it costs money to maintain—but not that much!
Imagine now a social network that is “owned” by its participants. Imagine doing all the things you do on Facebook, LinkedIn, Twitter and rather than all the revenue generated by your information and behavior going to execs, it goes automatically and immediately to you. That’s impossibly expensive in the present banking system—but it’s easy with crypto and its smart contracts.
Now imagine this with ride sharing, house sharing, banking: why are those organizations extracting all the revenue for themselves when we’re the ones creating that value?
So, thanks to crypto and decentralization, we can eliminate the tops of these information based organizations and distribute all that value continuously to the very people creating the value—you and me.
This is how we finally enter the real Information Age—by creating an Information Resource Economy. And that, alas, is what crypto is all about. It’s not a fad: it’s the future happening now. It’s inevitable. So the question is: do you fight a futile battle with it? Or do you take advantage of this historical moment and help reorganize civilization as all this value is unleashed?
DANIEL COFFEEN
Chief Communications Officer
