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@jake
It’s interesting to think about crypto in the context of value creation vs. value capture. For context, Amazon is well known for creating a ton of value and continuously pushing value capture further into the future as they lower consumer costs while improving their products and services. Amazon’s revenue does not represent the vast value they have created, only the small percentage of that which they have captured to date. Crypto is certainly a value creating technology, but it is also inherently a value capture technology. The word “capture” may carry negative connotations but I don’t believe this is a bad thing. Rather than capturing value, you can think of it as realizing value. The word “realize” is more neutral/positive. Crypto enables us to realize so much value that was previously unrealized. It creates markets to put a price on how much we like things, for example, like the concept of /higher. You could have created that concept 15 years ago. But crypto gives it a market cap.
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@jake
Another way to think about this is that crypto makes intangible value tangible. This is kind of crazy if you think about it. It’s categorically different from other technologies likes AI or nuclear which are clearly value creating but not doing anything different on the value capture side of the equation. The closest comparable to crypto would probably be, unsurprisingly, the internet. But the value captured went to big tech. With crypto, the value capture should be shared more broadly among market participants, though it can still be expected that there will be power law winners in terms of people, protocols, and companies. I’m not sure how this impacts things like GDP, inflation, money itself, but it seems significant. It feels hard to foresee the future as impacted by it because it feels so fundamental, just as it was hard to foresee many outcomes that resulted from the internet. There is enormous value in the world that remains intangible and unpriced. What happens when it’s priced and tradable?
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