The blockchain is valuable
The blockchain is valuable, so get involved. I’ll explain:
As a kid, my room was a mess. That’s unfair; everything was in its place. The place for clothes not dirty enough for the laundry or clean enough for the drawer was the floor. So I relied on my knowledge of where things were instead of an organizational system.
When I didn’t know where something was, it was hard to locate. Like any kid worth their stuffed animals, I’d cry to my mom, and she would find it. Then she’d tell me to clean, all my floor clothes would hit the washer, and she’d have more laundry to do. Still, I’d found what I’d sought.
New things are like finding something in a messy room; I don’t know how or where to find it. For some time, I searched for how I could use the blockchain. But, I didn’t know what that use was or how to get there. This article is my path to that missing item.
The blockchain is valuable, and I’ll show you how I found that.
The blockchain begins
The blockchain is a database. It is record-keeping technology, a digital ledger.
I don’t remember when I heard of the blockchain; it was sometime before Mt. Gox collapsed in 2014. At that time, I researched the blockchain and Bitcoin but didn’t understand their application. That’s why I’m writing this blog instead of Ticktok’ing from my yacht, B1TC01N$.
My attitude was the blockchain is an exciting technology without a use case. I expected future companies would use it to create value, and I wanted to find them. In other words, I was searching for a blockchain application.
This blockchain room was a mess, and I couldn’t find anything in it. So my goal is to show you the blockchain’s treasures.
Where the blockchain is valuable started
People collect things – jewelry, books, pictures of loved ones, plants, art. When the US released state quarters, I tried to get them all. I collected Pokemon, Tech Deck, Pogs, wrestling action figures, and Showdown the baseball card game. I collected collecting things. Carl Jung hypothesized that our hunter-gatherer roots caused collecting. Whatever the genesis, most people collect something.
A collector himself, my grandfather bought and sold antiques. His dining room is full of Indigenous artifacts and old bottles. When I visit my grandmother, my work set-up is in that room. I’m taking video calls in front of a dreamcatcher, wolf tapestry, and red patterned rug.
As a kid, I’d run around the flea market while my grandfather worked the booths. There, people swapped everything imaginable. Today, people trade on digital markets such as eBay, Etsy, and Amazon.
Like the marketplaces before them, collectibles are going digital. The blockchain enables that transition. That is to say, collectibles brought me to the blockchain.
I collect things, and I’ll walk you through my path from collecting physical assets to digital assets.
Physical Collectibles
Physical collectible value is intuitive – classic cars, vintage comics, and fine art. People want and are willing to pay for Van Gogh’s artworks. These high-end assets are valuable because of that demand.
Yelkrokoyade, Public domain, via Wikimedia Commons
Fractional investment platforms, like Rally Rd, offer partial ownership in assets. If shares of an asset are sold, like company stock, collectors and investors can contribute an amount right for them. For example, instead of one person owning a Van Gogh, a thousand people combine to own part of it. Fractionalization makes high-end collectibles available.
That’s great, but what does fractional investing have to do with the blockchain? An additional benefit of the fractional model is a third party possesses the item. Unlike the Pokemon cards I held and saw, my interaction with fractional collectibles existed through an app. Interacting with collectibles through an app is a blockchain use case.
That use case creates demand, and thus value, for digital collectibles.
Physical collectibles have worth. Also, they led me to their digital counterparts.
Digital Collectibles
A digital collectible is an item that exists on a computer or network of computers. Examples of digital collectibles are digital art, digital cards, or video game items. I’m focused on digital collectibles which exist on the blockchain. The most prevalent are non-fungible tokens (NFTs).
Each NFT is distinct, similar to physical cards or art. For example, a Michael Jordan card is different than a Shaq card. In contrast, something fungible is a dollar bill; one is the same as another. NFTs are unique.
They are unique because the blockchain tracks ownership. That means NFTs on the blockchain have a verified owner and transaction record.
Imagine the Mona Lisa had a publicly accessible log for who created it and every transaction in which it was involved. Anyone can search the database for ownership, where it came from, and when.
That provenance creates scarcity. Someone may copy what you own, but the blockchain proves who owns it. A perfect Mona Lisa replica wouldn’t be valuable because it’s not the real thing. Verifiable ownership creates an asset.
Dapper Labs’s product, NBA TopShot, made adoption simple. Users purchase NFTs the same way they’d order something online. TopShot was my first NFT because they made onboarding easy.
Here was the blockchain use case for which I’d searched. Finally, the fog parted, the heavens sang, and I jigged. Seized on an opportunity, I dove into the rabbit hole. Along my Wonderland travels, I acquired digital art, land, and wearables. With one use case found, I saw them everywhere.
The blockchain is valuable because it creates the internet of assets.
Crypto-curious
Last on my blockchain journey is where most people start – cryptocurrency. It was the first application I’d heard, yet the last I used.
Many NFTs are on the Ethereum blockchain and priced in ether – the medium of exchange native to Ethereum. When I understood that developers built applications on top of the Ethereum blockchain, I plunged into its cryptocurrency (crypto). So I first used ether to buy NFTs.
I got crypto to spend. Then I got crypto to hold.
Here are two benefits of holding crypto:
First, if the ecosystem grows, its purchasing power will increase. To say another way, if the Ethereum blockchain grows, ether can purchase more.
Second, it facilitates transactions. To illustrate that, imagine if all transactions were in pesos, but everyone owned dollars. People would have to convert currency every time something was bought or sold. In addition, volatility would exist because whenever someone exchanged money, they’d receive a different amount. Holding crypto removes those obstacles.
Crypto is the blockchain transaction currency.
Initially, I didn’t understand crypto’s use cases. For example, what transactions would require blockchain currency? Now, the digital economy is sprouting everywhere.
For the people in the back, I’m in crypto because of NFTs. That may be backward, but it’s the way that worked for me.
Like I said, the blockchain is valuable
Meaningful blockchain applications are here, and they’re better than imagined.
My journey into the blockchain started off-chain with something familiar, fractional collectibles. Next, I progressed to digital collectibles with easy adoption on the blockchain. Then further NFTs, and last, cryptocurrency.
The goal of this article is to show you the blockchain is valuable and how I got here. For sharper explainers of the technology and how-to, I defer to resources that helped me: Bales’s Lucky Maverick Blog, DCL Blogger videos, NonFunGerbils podcast, Patrick O’Shaugnassey podcasts, and Tim Ferriss podcasts. And I’ll add, the best way to learn is by doing.
I found the blockchain’s treasures amidst the chaos of a messy room. Like my mom helping me uncover things, collectibles and resources guided my search. The blockchain is valuable; now plunge in.
