The Lack of Utility is the Sign

Another crypto scam is imploding. None of this is hard to see coming if you refuse to believe something is valuable without demanding to see utility.

When the value derives entirely from the belief that other people will believe that other people will believe that other people will believe it’s valuable, you’re in trouble.

You can win if you time it right, but you never sleep well and you never know if you’re timing it right.

A few years ago, I thought 90% of crypto was fake, useless scams. Today, I think it’s probably more like 98%. The percent of crypto projects that have any real utility has pretty much declined every year since Bitcoin was released. Maybe it increased for the first few years, but since at least 2015, it has been plummeting rapidly.

There are a few things that blockchain tech can do that offer the promise of real utility. Solving the Byzantine General’s problem with economic incentives in a digital environment is pretty amazing, at least in theory.

In practice, it opens up new surface area for digital innovation. Nanopayments. Timestamps and proof of history. Global, instant, nearly free transactions. Data and units of exchange combined. Split payments. Liquidity for things like revenue streams and fractional ownership. And on the fringes, some additional tools for the constant cat and mouse game of evading government censorship and regulations (though most crypto makes government’s job easier and tyranny far stronger, a few ever shifting edge cases will always exist, and such gray/black market outlets are on the whole a good thing).

But almost no one is working on any of these things. The few that are have almost no traction.

Pretty much all of crypto is – and has been at least since BTC crippled itself with tiny blocks to purposely curb its utility – useless ponzi garbage and government/organized crime grift, surveillance, and psyops.

The saddest part is how many full-throated libertarian types have empowered tyrants and corrupt legacy banksters while believing they are resisting them.

Again, it may seem confusing and hard to discern what’s what, but if you simply and relentlessly ask “What’s the utility”, all of this is and has been obvious to see for some time.

The stock market can be (and is) manipulated and corrupt, but shares of a company at least have a causal connection with utility. You can see where they get worth beyond just the belief that others may value it. The companies make and sell things that create value for people, and get revenue in return.

When the only value is the belief that it will someday create value for someone, but no one has even attempted to propose how, you’re in trouble.

You may buy shares in a company without a product, but only if you have seen some kind of vision or roadmap that plausibly lays out how your money will result in a product that creates value. None of that is present in almost any crypto project.

Again, there is real value in the underlying problems that Bitcoin solved in 2009. But almost no one is attempting to tap into any of it.

Look for utility. Would you use the thing for something, or could you find someone to sell it to who would? Otherwise, you’re mostly just contributing to a big egregore that wants to eat you.

This isn’t a perfect rule in a world of limited info and subjective economic value, but it’s a great heuristic to reduce downside risk massively, and keep your sanity intact.

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