Is an ocean of capital waiting to spill into crypto?
PLUS: understanding monetary energy & "unforkable utility"
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On Valentine’s day in 2011 Bitcoin was $1. On Valentine’s day in 2022 it was over $42,000. Patience, my friends.
In this issue:
Is an ocean of capital waiting to spill into crypto?
Understanding monetary energy
What is “unforkable utility” and why should you care?
NITRO! (3 can’t-miss things)
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Is an ocean of capital waiting to spill into crypto?
The Super Bowl was awash in crypto ads and references over the weekend which, I’m sure many have guessed, must mean lots more money will be pouring into the crypto space now. Well… if by lots more money you actually mean lots more “dumb” money then you’re absolutely right. Coinbase’s website crashed after their clever QR code ad aired (cue the might as well help new customers adjust to the experience right away jokes). But it’s the inevitable flow of smart money moving into the space that really piques my interest:
Also… bear in mind… talking about panic selling… I see what you did there Guy…
While you’re wrapping your head around the 2 above tweets think about this: which assets are likely to capture the most smart money once the proper regulations are in place? Hint: not a flavor-of-the-month GameFi project.
Do yourself a big favor and actually ask yourself which crypto assets are purely speculative (very long list) and which aspects aren’t (very short list).
Understanding monetary energy
I came across an interesting reply to an interesting tweet today that mentioned the term monetary energy — a term I first encountered in yet another tweet from the one and only Michael Saylor:
I sorta/kinda comprehended that Michael was saying something profoundly cool at the time but… I didn’t really get it. When I came across the term again today (as I do from time to time) I decided enough was enough: today I would wrap my head around monetary energy. Here’s a quote from the best explanation I’ve found thus far:
Money is what rules the world around us. We all know how to make money; we all know how to spend money. However, despite the fact that we all interact with money on a daily basis, we do not all have an understanding of what money truly is at a foundational level. A simple way to comprehend the nature of money is to think about money as energy. This energy, referred to as monetary energy, has been harvested and innovated by humans to help transact value with one another (across space), as well as to store value for later usage (across time).
What is “unforkable utility” and why should you care?
If your head isn’t aching from trying to work out monetary energy then you’re not going to like me any better for throwing unforkable utility your way… and yet… here it comes.
To fork means to copy and crypto projects get forked all the time.
Saw an interesting article which I wanted to put on your radar. It’s about an interesting insight from a VC who looks for unforkable utilities (aspects of successful crypto projects that can’t be copied as easy as their open-source code). What is an unforkable utility? He explains:
…it is not strictly a protocol’s popularity that increases its long-term value but a combination of its popularity and defensibility. While popularity is easy to measure, defensibility is more complicated, presenting itself in various forms. After evaluating dozens of protocols, I believe the most desirable form of defensibility is usefulness that cannot be easily forked by a competitive project.
Reading through this list of 6 types of unforkable utilities I get the feeling that it mostly boils down to first-mover advantage — and even if you think that’s an oversimplification… you can get a good sense here of why being first (original) really does matter in crypto (and in business).
NITRO!
Cool: Pearpop introduces dynamic NFTs that gain value as a social media post goes viral
News: What the BlockFi SEC Settlement Means for Bitcoin and Crypto Lending
See you next time and don’t forget to check out Jasper!