“Your system is fueled by the creation and capture of value,” Carl said. “The goal is to capture as much value as you create, though in practice that is more or less impossible. Altus is creating false scarcity because they think that is the best way to capture the value they are creating—there’s no more to it than that. They’re just following the incentives of the system.”
“But isn’t the point to create value?” April asked the monkey.
“That is unclear.” They scratched the back of their little head. “Creating the value is what people publicly praise, but capturing value is what is actually rewarded. Altus is creating value, likely far more than it is capturing, at least right now. But your system does not have good ways of even recognizing the existence of value that is created but not captured.”
Hank Green is some nerd scientist on TikTok.
He also runs a business that I know very little about. My girlfriend likes his content quite a bit. Over the past few trips visiting family and going across the country we listened to both his books on the various trips we've done. She's listened to them multiple times she likes them so much. Apparently it's not that hard for her to focus on work while listening to something like this in the background. My ADHD could never allow such a thing, so kudos to her.
In any case, I don't read much, and these books are quite good. In fact, I can't even remember the last time I experienced a book. Definitely more than ten years ago. This was a nice change of pace, to experience something a bit more meaningful than zoning out or playing a video game on my laptop. Actually I was playing a video game on my laptop for about 4 hours during... maybe I can multitask after all!
In any case, there are a ton of randomly insightful quotes in these books. Some pertaining to fame. Others pertaining to the economy or other random macro game-theory. The above quote really stood out in my mind, as it relates directly to crypto, which is ironic because the only crypto referenced appears in the second book, and it's owned an operated by the bad guy (go figure). Still, the story is good, and comes highly recommended by me.
“Your system is fueled by the creation and capture of value,”
This is the crux of the entire economy.
Legacy institutions must not only create value, but they must also capture value. Corporations that create value but can't seem to capture the value they create will go out of business. After all, corporations have employees and other massive overhead costs. Without value capture such an entity can not sustain itself, becomes unsustainable, and goes out of business. Too bad so sad. Capitalism.
The true irony:
Is that crypto, while displayed as a tool of the 'bad guy', actually flips this entire concept on its ear. This is something I've attempted to talk about several times, and the above quote has reinvigorated the topic for discussion.
Crypto captures all value.
In the world of cryptocurrency, everything built within the system is captured by the system. Nothing escapes the underlying value of the currency itself. Thus, a corporation can create massive amounts of value, and if they own enough of the underlying currency, it does not matter if they don't know how to capture the value that they create, because the currency they are holding captures 100% of the value for them.
Of course many other entities also hold the token, so if the corporation in question only owns 1% of all the token, they will only capture 1% of the total value they bring to the table. However, this is often icing on the cake. In many instances the crypto corporation will capture value in another way as well, on top of getting the raw gains from holding the token.
This was the business model of Steemit Incorporated.
And while Steemit was obviously a huge fail, it did not fail because the model was flawed, but because the leadership was incompetent, foolish, and greedy during times when they should have been taking gains (remind you of anyone/anything?).
In many respects, Blocktrades has the exact same business model. He puts a lot of work in and captures very little direct value in return. Sure, he runs an exchange and captures exchange fees and likely arbitrages markets with bots, but that's really not a lot of value capture for someone creating straight up hardforks for Hive. How does Blocktrades capture the value of the hardforks he creates? The answer is by controlling a metric shitton of Hive. That is the only way to benefit from working for 'free' and generating value for everyone.
The idea here is that more people will do this as well. It doesn't have to be just blocktrades. We can all participate. How many people write a blog post that has value but doesn't get rewarded as much as it should. That benefits everyone on Hive, even if it is theoretically unfair to that specific author. How many devs are building and Hive and creating a ton of value that they can not capture? Again, all that value is captured by the underlying token.
Central banking hacks.
The reason why this value capture can not occur in the fiat system is that the people generating value within a USD system have zero control over USD. Central banks have been sucking down the gains of everyone else for hundreds of years, and that monopoly is slowly coming to an end. It seems slow now, but the tipping point will send us flying into the future and the banks will have no idea what hit them. Financial warfare is coming, and they will lose swiftly because they are soft and weak and haven't fought a real opponent in decades.
Decentralized Hive Fund
Hive is in a fairly unique position compared to other chains in that we already have a governance system set up that allows us to subsidize work that devs can not capture value from, but is extremely valuable to the network itself. It is so damn easy to look at the DHF and point out all the projects we threw money at that failed, but this is essentially a venture capital fund. 90% of the projects in the DHF can be complete failures and the DHF money can still pay for itself ten times over. That's how venture capital allocations work in the cutting edge tech industry. Assuming that everything should be a winner is downright foolish.
For example, we are funding a documentary about the hostile takeover. Who does this documentary benefit? How can the group that creates the documentary extract enough value from it to turn a profit? The short answer is: they can't. It's impossible. This is why we use the DHF to fund the project, because Hive cryptocurrency will automatically capture value from the creation of the project. With the Hive safety net in play, we no longer have to worry about value capture. This simple fact is going to have massive ramifications down the road.
Extend this idea to the medical industry.
As of right now, in many instances, the medical industry can't turn a profit if everyone is healthy. This creates very messed up situations and infinite conspiracy theories as to the motivations of doctors, insurance companies, and Big Pharma.
Meanwhile, in crypto land, if a network subsidizes the healthcare industry the entire business model changes. All of a sudden we can pay our citizens to diet and exercise, because diet and exercise are the primary components to supporting our own bodies to heal themselves. Does this sound like something the medical industry could ever hope to achieve? Never! In fact, even governments can't seem to handle paying citizens to take care of themselves, or to even take care of them when something unfortunate happens. Everything has become monetized and corrupted with extremely toxic business models that absolutely depend on capturing value. Crypto changes everything.
Of course this is all "in theory", and as we all know the theory doesn't exactly line up with the practice. People are still greedy, and crypto needs so much infrastructure and development before we could even begin to dream about challenging a Goliath such a Big Pharma or Big Oil or the Military Industrial Complex or insert_centralized_Goliath_here.
Personally I believe that even the military itself and the concept of "defense" will be shaken to its core. If you look at the military, it acts like it values human life, but it absolutely does not. People have a price tag on their heads. Some people are worth more than others.
For example, a grunt in the Army is worth less than a fighter pilot officer in the Airforce. Its very obvious that if someone had to chose between one or the other, they'd easily let the grunt get killed to save the fighter pilot.
However, there's even more to it than that. We could allocate more resources to better body armor or employ tactics that are statistically guaranteed to save lives, but we choose not to employ these options on purpose, because again, human life has a price tag on it, and some people are literally worth more than others. This is how the Military Industrial Complex operates, and it is also how the economy operates as well.
In the opinion of the economy, people don't matter except within the context of how much value they can create/capture within that system. All of these 'rules' were created by flawed systems that put people in charge to make the tough decisions, and most of the time those people in charge do not act on the behalf on the ones they control, but some other entity (boss, greed, corporation, patriotism, etc). We all know that people should not have a dollar cost value associated to their own lives, but they do. There are only so many resources to go around. If we have the option to do a heart transplant on an 80 year old smoker or a 20 year old otherwise healthy individual, which one is going to get picked? Maybe the 80 year old if they are "important" and rich enough. Again. Capitalism.
I believe we are on the verge of an new system and new line of thinking entirely. Individualism will be valued higher, but so will community. These seem like contradictory ideologies, but they are not. While we empower individuals and support them to create the most value possible, we will also create communities and automate power away from the leaders it would have inevitably corrupted. The individual and the community go hand it hand.
Conclusion
Economy 2.0 doesn't care about capturing value; only creating it. Those who create value will be rewarded with reputation, and those with reputation will be rewarded with crypto and whatever else society has to offer. The entire system is on the verge of a complete overhaul, and I guarantee the transition phase will not be a pretty one. The tunnel is dark, but the light at the end of it is bright. Stay strong.
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"there are a ton of randomly insightful quotes in these books"
you just the nail on the head. i started reading these books the other day and I'm already half way through the second one. any progressive person would gain a lot from the experience and perspectives hidden throughout these books. they cover such a wide range of the modern world.
I read this quote while on the train and I had to stop and nearly cried because I felt so seen...
"If we do not let people know that it is possible to be different, the ones who are different will live their entire lives in a kind of cultural prison. And there are so many ways to be different that almost everyone ends up feeling imprisoned by some aspect of a society that only allows for the default path.
“The problem is that, as progressives, we pretend that there are no costs, and that no one is losing anything,” the video continued. “But, of course, some people do lose—especially those whose power was tied up, not in their wealth, but in fitting comfortably into the clear path."
Wow.
if you want more books like this, read the names of the authors who praised this book in the front cover. Patrick Rothfuss, Catherynne Valente, Lev Grossman...
as soon as I opened up the first book and saw these names I knew I was home.
yeah that quote was pretty epic I totally forgot about it
thanks for posting it here.
Truly amazing mate. I don't read books that much either but it's nice to pivot sometimes. I read a lot of articles though 😬 and this one is so relatable.
The reason why I love HIVE and LEO because some of the brilliant minds are working on it. They own those tokens too, they capture the value for me so I also feel like going an extra mile for them. Shilling them on social media or telling about them to my friends. By doing our parts we are doing charity to everyone on the network including ourselves. Crypto promotes the culture of self serving altruism. Just imagine once we have thousands of successful DApps and Projects going at once. Each holder will get the benefit!
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It makes me wonder if organizations like the Military or the medical industry will ever change for the better. For some reason, I don't think they will because that is the very thing they thrive off of and they will always be trying to build the situations where they profit.
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they have to get better when they are controlled by transparent communities.
if we could see all the bullshit they were doing and it was just wide out in the open they'd never be able to get away with it.
Exactly,.. I once asked myself how the USD gained so much power to be the most used currency of conversion and in the world market. That is why they control lot of economies indirectly.
By the way, I love that Gandhi's quote there. @edicted
That's actually a nice fact and a way forward in achieving more goals with determination, courage and hardwork with the mindset to never give up and I believe such goals will be accomplished
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I liked the wise quote from Mahatma Gandhi in your post. Hello to the gigantic Carl, it designed really superb. I appreciate.
Haha! ADHD never bothers me too.
I think Steemit was incorporated on the baseline tag where rich gets richer and poor gets poorer. I don't know if someone agrees with me :D
Great Post!
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Is matic still down, or is it just stealthex?