Pyramid Scheme

11 months ago

From my AMA:

Hi Mikkel. Just finished watching The great crypto scam with James Jani. I have previously (Kortsluttet) heard you talk positively about the possibilities of block chain technology. Are you still optimistic about the potential now or do you share some of his concerns, that it is mostly utilized as a pyramid scheme to make early adopters rich.

I’m quite involved now in the digital collectible scene, AKA NFTs, and I hold some crypto, mainly $ETH that I’ve made from selling and helping others sell NFTs. So take my opinion with that in mind.

I don’t see crypto, Ethereum at least, as a pyramid scheme. There have definitely been folks who’ve been rewarded solely by being first but that is also true in start-up investing or real estate or whatever else people invest in. There’s always risk and then sometimes there’s a reward for taking on that risk.

I like how NFTs allow me to collect art directly from artists. I support them in their creative endeavours and I get to call some pieces mine. Whether you think this form of ownership is even a thing (I CAN JUST RIGHT-CLICK SAVE AS?!) is up to you but it is meaningful to me.

I think the last 10 years have shown us that if we want to live increasingly larger parts of our lives online, we need somewhere to live. Huge corporations and their Social Media products were easy to move into as they had the means to pay thousands of talented people to build very easy to use and welcoming machines. But the rent was paid with attention and privacy and, on Facebook democracy, and recently on Twitter with our dignity.

So we need something else. Public blockchains provide a solution to the problem of where do we put all the stuff?! Just think of them as a database that no one owns. It’s slow and expensive and cumbersome. But no one owns it. So no one can fiddle with the data. No one can decide to sell your data against your will. No one can tell you, you have to use their app, because there’s no moat around the data.

There are a few other decentralisation efforts that don’t include the whole money aspect so prominently, like Holepunch or Scuttlebutt. They’re very interesting as well.

I don’t think Bitcoin will replace the dollar. I’m not sure it’s a good investment to buy any crypto at any point. Well, it would’ve been 6 years ago and wouldn’t 1 year ago. But who knows where prices go from here. I’m not too interested in that aspect (I mean, if the $ETH price goes to a million USD and I become generationally rich, I won’t complain.)

Join my mailing list

Receive a note when I publish new writings on building, shaping and running small-to-medium software.