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What part of that diagram would break down for a company within the 'real economy'? Naively, if I am running a SaaS company, I receive fiat in and pay fiat out.
by wakamoleguy 4y ago
What part of that diagram would break down for a company within the 'real economy'? Naively, if I am running a SaaS company, I receive fiat in and pay fiat out. It's the same two pipes. It's just that some of the fiat coming out is going to shareholders. The 'value' that the service is providing only justifies who the fiat is going to, not how much there is.
- wakamoleguy 4y agoI suppose one answer is that the diagram does still work for non-crypto companies. Reading the analysis that way, the simple conclusion is that they didn't see the value being created. However, it's not impossible that it could have been created.
- colmmacc 4y agoThe real point being made here is that a 'real company' can generate value in the form goods or services, which hopefully makes the out pipe bigger than the in pipe. This could be true of crypto; maybe the voting system in a DAO, or the art in an NFT, or the peer to peer trust, has intrinsic value that people will sustain a profit margin for. But with the simple empty circle they are making the point that the main reason folks invest is just to make money, and in that regard crypto is mostly just moving it around and that's not a value add. You could say that regular finance is the same, but it brings intrinsic values like insurance on deposits and investments to the table, and invests in 'real-growth' businesses that produce goods and services.