Productive Capital in Cryptonetworks

Thus far, cryptonetworks have used their native asset to entice early investment in their economies via two primary pathways:

• Minting to supply-siders that install productive capital

• Selling to investors that contribute investment capital

While investment capital can ultimately be converted into productive capital, the two are not synonymous, and value doesn’t always make the leap from investment capital → productive capital. Sometimes investment capital can waste away on balance sheets like unused kindling. The question comes down to who is first prioritized, the supply-side that installs the productive capital or the investors that float the investment capital?

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The Nouriel in All of Us

This week crypto has been afire with Nouriel news. After voicing my own disgust at Nouriel’s behavior, Chris King responded: “He’s triggered and we’re triggered. No one really wins.”

Chris is right. We’re all so triggered that conversation between the crypto-community and Nouriel has devolved into an intolerant pissing contest of insults, and such rhetoric between groups goes nowhere. We appear just as badly to Nouriel, as Nouriel appears to us.

I raise it as a reflection now, because a rhetoric of intolerance is dangerously common in crypto. 

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Cryptoassets: Flow & Reflexivity →

“We hypothesize that crypto’s heightened reflexivity is driven by uncertainty and confusion around the early-stage technology, virality of communication mechanisms, lack of standardized valuation frameworks, regulatory paranoia, and majority retail participation. All of these characteristics are amplified by the liquid nature of this emerging asset class, which creates sub-second informational signals that violently feed back on themselves.”

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