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If enough people believe something, does that make it real? Nope.
Storytelling is a powerful force in human interaction. From stories around the fire, to books, movies, or even marketing, narratives have the power to alter courses and change outcomes.
Even when people know stories are fake, like government propaganda, for instance, it still has an effect, even on the non-believers. What’s this have to do with Bitcoin and crypto?
Everything.
Let’s get real for a second here. Everything in crypto, including Bitcoin, is based on a story. A narrative. There is no “fundamental” value in crypto. Put another way, there is no way to do something like a net present value (NPV) calculation on crypto.
If you remove all profits and losses from every crypto transaction ever, the result is zero. Meaning, crypto is a zero-sum game. If money is coming in faster than the money is going out (and faster than new tokens are being issued), then number go up.
If money goes out faster than it comes in (or if it doesn’t outpace token inflation), then number go down. It’s pretty simple really. Thus, the “business model” is:
- Get money coming in; and
- Do everything you can to keep money from going out.
What gets the money coming in? Stories. What keeps the money from going out? Stories.
That’s it.
The better the story, the more money comes in. Really good stories help keep the money around. The idea isn’t new.
Organised religion tapped into this ages ago.
With crypto, developers tell venture capitalists (VCs) a story. VCs tell market makers a story. Collectively they tell influencers a story. Then all of them tell retail buyers a story.
Digital gold. Store of value. Freedom money. Revolutionary technology. No middle man. Reclaiming privacy. Get paid to move. Get paid to play games. Get paid from “yield.”
It almost doesn’t matter what the story is. It doesn’t have to be true. It doesn’t have to ever come true. All the story has to do is get you to buy in and keep you around long enough for…
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