Posted on May 22, 2022Read on

widely used logic vs. valuable datasets

The great early crypto companies look different from the great early internet companies.

early internet companies

The great early internet companies were built on valuable datasets of human activity.

These datasets’ value scaled super-linearly relative to the number of humans they were measuring. The marginal benefit per user increased with the dataset’s size.

They utilized a brand new tool, the internet. The marginal cost of distributing ideas on the internet per additional eyeball was tiny compared to what came before. This allowed internet companies to grow their awareness in a viral manner.

They were capitalizing on a new form of leverage.

early crypto companies

The great early crypto companies were built around logic widely used by other crypto companies.

The value of each company’s logic scaled super-linearly with the number of other systems that depended on it. The marginal benefit per interlocking system also increased as the network of applications grew.

They utilized a new tool, blockchains. The marginal cost of trusting the behavior of an application per additional dependency of the application was tiny and effectively fixed. This allowed blockchain companies to grow their trustworthiness in a viral manner.

They were capitalizing on a new form of leverage.


There’s been a flood of folks from internet companies trying to now build crypto companies. Inevitably, they have biases based on what made them successful on the internet. I have many of these biases myself.

Internet entrepreneurs and employees focused on building valuable systems and datasets. But the most valuable things in crypto are widely used logic and state.

They’ve been designed to be dependencies.

They’re simple, but general and widely used.

More like connective tissue than self-sovereign brains.