Below are some thoughtful and entertaining crypto-related content since the last update
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Ethereum hit $10 billion in revenue faster than any other major software company besides Google
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Programmable, composable data structures (ie, tokens) are the “new computing primitive” that will usher in the next phase of the internet
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We need an alternative. Crypto is the perfect marriage for AI since the transparent global human coordination that underpins the movement is something that can harness AI for good at global scale. Crowdfunding (with cash or with your GPU) the creation and fine tuning of open source models which anyone can audit in real time for biases or issues is the safest path forward in the accelerating world of AI.
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Chris takes the same journey but he calls these phases Read, Write, and Own. The initial phase of the web, when the web browser arrived, was mostly a reading experience. Then in the early 2000s, the web became two-way and we could Read and Write. What Blockchain Networks have unlocked is the ability to own things on the web
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The “big, long macro trend” is what’s important, not the “technology” of “passive investing” or “indexing”. American Boomers of the last 30 years think they are “smart” to Index, but their real smartness was to jump on board a trend fueled by US money printing combined with quantitative easing and globalism
The idea of Bitcoin, like the idea of Index funds is a clean “world view” that markets itself. It’s not the only crypto that does so. Once you do accept Bitcoin into your brain, part of your brain opens up to other cryptos: Eth, Solana, NFTs, Ordinals … maybe some combination of Crypto and AI like Tao.
My sense is that this new idea: Bitcoin, and this new demographic: Millenials are in for an epic bull run.
The BTC ETF will be the gateway drug for this. It will get the Boomers and GenXs so that they CAN participate in the transition. Most won’t. But enough will.
It’s an idea that will take over the next 20 years.
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Friend.tech does ~$7M in annualized revenue from only ~500 DAUs. But you need to have an extremely high CLV for the economics to work.
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He defines crypto as a meeting of “generative tech” (the creation of new things, users and markets) and “participatory capital formation” (individuals pooling money in new ways to create new types of businesses).
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Cdixon on investing (he leads a16z’s Crypto Fund):
I used to think venture investing is 80% an intellectual test, 20% emotional test. Now I’d say it’s the reverse.
I’d say the same about my experiences as a startup founder. Probably true of many other long-term activities.
Giving up too early, being overly influenced by external sentiment, acting hastily, losing sight of fundamentals, getting too optimistic, getting too pessimistic, being overeager to do something when sometimes you just have to wait, other times waiting too long…. Etc etc :)
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Every bull market in crypto has been kicked off by a new method of token distribution. Examples include:
* PoW chain proliferation—2013/2014
* ICOs—2017
* IEOs—2019
* Liquidity mining—2020
* NFT minting—2021
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Some view this regression phenomenon as the foundational policy of the crypto space: “whatever is permitted by the protocol’s code and market structure is legitimate.” This viewpoint, while rarely expressed in such direct terms, is remarkably common among crypto users
Regression to the code erodes social norms, and this consequence accounts in large part for what repulses people from crypto. Even as protocols fulfill important social functions like affordable remittances and escape from inflationary regimes, “the space” appears to outsiders as greedy and riddled with scams. It is for this reason that crypto seems to stand apart from all prior human institutions
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Token buyers will be to investors what bloggers/tweeters are to journalists:
Tokens will break down the barrier between professional investors and token buyers in the same way that the internet brought down the barrier between professional journalists and tweeters and bloggers.
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Multi-chain developers have 10x-ed since 2015 and accelerated after 2018.
30% of devs have been working on 2+ chains for 3 years.
Most chains share deployers with Ethereum. Ethereum, @0xPolygonLabs, & @BNBChain cross-polinate the most frequently.
Large ecosystems have emerged for @0xPolygonLabs, @Optimism, @Solana, @NEARprotocol, @Cosmos, @Arbitrum, @BNBChain, and @avax
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Treasuries are just staked US dollars (!)
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In these cycles, bitcoin consistently outperformed altcoins in phase 1 of the upswing. In phase 2, altcoins substantially outperformed bitcoin. What’s interesting is that the magnitude of outperformance is so large that altcoins have outperformed bitcoin across the full length of both cycles
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If attention is the core pricing factor, then what crypto enables is an infinite canvas to issue and trade assets that track attention. The broader pattern of “financializing attention” requires two of crypto’s most important properties to reach its natural end state: permissionlessness and composability.
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The reason is that the transition from a gold-backed to fiat-backed system was comparable to a soft communist revolution, as the *visible* seizure of gold laid the groundwork for the *invisible* seizure of wealth via money printing.
And the classically trained judges at that time fully understood this. Justice McReynolds’ then-famous dissent denounced the ruling in the harshest terms, noting that the “Constitution is gone” and the “dollar…may be 30c tomorrow, 10c the next day, and 1c the day following”.
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The most important takehome is that tokens are not equity, but are more similar to paid API keys. Nevertheless, they may represent a >1000X improvement in the time-to-liquidity and a >100X improvement in the size of the buyer base relative to traditional means for US technology financing — like a Kickstarter on steroids
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Crypto is the modern version of the long emerging markets trade. As an industry, it will see the most relative capital inflows, budding innovation and has an innately global footprint. It provides a fiat currency debasement hedge (Bitcoin), new application networks akin to the internet (smart contract blockchains like Ethereum and Solana) and the fastest growing population. You can compare it to any individual sovereign, country or financial market and nothing beats it.
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Our thesis at Variant is that the next generation of internet networks will turn users into owners—specifically asset owners. The internet enabled everyone to become a publisher, and similarly, crypto enables everyone to become an asset owner, and therefore, an investor. You don’t need capital to invest, you can invest your time or work by producing art, running machines, or doing physical work.
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Ethereum is just a super useful thing – Ippolito
