Earning Crypto > Crypto

The days of disruption, radical token models, value capture theses and spreading crypto gospel to anyone who will listen are over. Make room for blockchain transformation, value creation and adoption. Maturation is a good thing.

Despite the shift, what was once the cypherpunk’s vision of the future — an internet of value, sovereignty, privacy and micro-payments — is still within our reach. The ICO model was tragically flawed. New business and social coordination models were sold ahead of the technology and cultural shifts. Token engineering value capture was hamstrung by the limitations of early cryptonetworks (try computing anything on-chain). However, nothing trumps the blaring noise of our crypto gospel choir than the average Internet user.

They don’t care about sound money policy, decentralization, privacy or censorship resistance; partly because our own industry can’t define these terms. Change is coming. The tide is shifting.

“Give them crypto, and you feed them for a day. Teach them to earn crypto, and you feed them for a lifetime.”

We can walk new users to crypto, but we can’t force them to transact. We must train the mechanism by having them earn their own value. Participatory business models help users form habits, contributing to the network. Once they’ve accrued a meaningful amount, educate them on private keys and a hardware wallet. That’s the point of this post.

Pick one blocker on the path to sovereign individual value creation and solve that problem.

New Models

In 2014–2017 we saw a lot of crazy ideas. I would argue most had good intentions because I’m an optimist. But as a realist, I would also argue that most projects in the space didn’t know what they didn’t know. Founders didn’t understand the fundamentals, limits and had zero idea how they would solve the biggest blockers to their success. Brazen teams sought to upend the worlds infrastructure but hadn’t even done the home work on their prospective domain 🧐

e.g. decentralized social networks popped up everywhere without even a whiff of research into historical coop models. Thanks Jesse Walden for your latest post, “Past, Present, Future: From Co-ops to Cryptonetworks” 👏

Value Capture

Fixed supply token models piled on in 2016/2017, inspired by Chris Burniske. The MV = PQ model was from his seminal work, “Cryptoasset Valuations” (sorry Chris, redemption later in post). The most stable models to come out of this period were staking based. A fixed supply asset with a lockup to signal proportional rewards or mint a new asset, as we’ve seen with layer 2 protocols like Loom Network and Skale, MakerDAO and the emerging #DeFi ecosystem.

This doesn’t bring new users… But it makes noise about how awesome programmable digital scarcity can be. I’m personally relieved out narrative has matured. We are thinking more holistically about bootstrapping networks and community.

Crypto Gospel

Many battle tested entrepreneurs know that you don’t get new users by talking about how awesome your product is. You get new users by solving a problem, creating value, changing lives and creating a true fan.

The crypto industry is too insular. We’re all singing, good songs, but we’re the only ones who know the words. It’s time we focused on education and onboarding.

First we need to meet the users where they are. On Web 2.0 😲

Transformation

I argue constantly that several features of public crypto-networks can be stepped into. We must graduate users as they create more value for the network. Start with a custodial wallet (don’t @ me). Use a payment channel or layer 2 solution to a) de-risk your own database and b) provide the user with a trustless off-ramp onto a public blockchain. Then EDUCATE your top value creators and leave the long tail alone. The lurkers and low value users on your network will be just fine ignoring your onboarding emails.

There are other vectors beyond cryptocurrency and rewards. Think about encrypting user data stored by a centralized database. This can be done with little impact on user experience. Tweak the login flow, use ephemeral key pairs across user devices, encrypt and presto… no more aggregate data dumps from hacked databases. Perhaps you can even flip off the EU and say, “what’s GDPR?” 😎

These are incremental, nonsexy B2B problems with huge value capture opportunities. Who’s solving them? Seriously, contact me…📱

Value Creation

Why is earning crypto more valuable than making crypto more accessible? When people earn something they develop a deeper relationship with the reward. If you train this mechanism today, they will come back tomorrow. This is analogous to Instagram Engineering habit forming behavior. Only this time, the user owns their likes and influencer value in the network. Suck it Zuck 😝

Lots of exciting projects like Cent, SpankChain, Gitcoin, Burner Wallets and more are allowing users to earn value within the network immediately and cash out later. This is the model you were looking for back in 2017 and why it may be, “The Best Time to Buy & Build Tokens.” 😍 Chris Burniske

Adoption

Without beating user experience (UX) drum too loudly (more like a dead horse), we need to make adoption of crypto networks as seamless as their Web 2.0 counterparts. While I commend the incredible engineering efforts of teams like StarkWare and Counterfactual; what are you scaling for?

We need more engineering to the front lines. Let’s meet users where they are and get them earning their crypto. I know we can build solutions with equitable distributions to network contributors ⚒️🤗

Time for a hardware wallet…

Summary

It’s simple and you might want to follow the Cent example:

• On-board users immediately
• Let them create / earn value in the network
• Back by trust-less infrastructure as needed (channels / layer 2)
• Graduate valuable users toward non-custodial value storage

There’s no need for a 14 step sign on process. If the user doesn’t hold anything more valuable than a 2 cent opinion or a $5 collectible, there’s no need to learn anything new. Let’s nail these new patterns down as a community 🤗

How will you help others create and earn value on the Internet?

soloblock.solutionsmedium.com/@mattdlockyertwitter.com/mattdlockyerlinkedin.com/in/mattlockyer

Appendix

Reading

Bounties For The Oceans: Incentives to Change the World_On December 1st and 2nd, Bounties Network, ConsenSys Social Impact, and Coins.ph came together for an event with one…_medium.com

Building Confidence, Not Dapps_We need to start removing fear from the cryptocurrency equation._medium.com

Minimum viable decentralization_If you want people to use your product, decentralize the bare minimum. Lessons from Freenet, I2P, Darknet markets, and…_medium.com

Cent: Income from anywhere._At the end of this summer, my co-founder Cameron and I began testing the beta version of Cent, an ambitious project…_medium.com

Comedy