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This analogy can be applied to almost anything. According to this criteria, coffee could be considered a startup: the growers of the beans are the founders, the

This analogy can be applied to almost anything. According to this criteria, coffee could be considered a startup: the growers of the beans are the founders, the hipsters sipping their cold frappuccinos at Starbucks are the evangelists, and the price for one pound of coffee beans is its market price. The only problem here is that coffee is a commodity, not a startup. Anyone can grow it and sell it. Likewise, bitcoins can be mined and sold by anyone. Bitcoin by design is decentralized, meaning that there is no central authority, such as a bank, mining new bitcoins. There is no company or government body that officially runs Bitcoin, only individuals (but in a distributed fashion). A startup is completely different, in that it has a governing body and is usually centralized. Bitcoin in a sense is both a currency and a commodity, but is definitely not a startup.

drewcrawford 13y ago
> The only problem here is that coffee is a commodity, not a startup. Anyone can grow it and sell it. The better comparison is to oil. Oil is a commodity, in that anyone can buy it and sell it: but there is a fixed amount of it, and one can only acquire oil by taking oil from the fixed supply. Further, the earlier you got into oil, the more money you made, and the same is true of Bitcoin: the authors have made out to the tune of [100M or more](http://bitslog.wordpress.com/2013/04/17/the-well-deserved-fortune-of-satoshi-nakamoto/ http://bitslog.wordpress.com/2013/04/17/the-well-deserved-fo...) simply by being the first miners. So I don't know exactly what kind of definition you want to use for "startup", but bitcoin is certainly software, that was written by a small team of people, that solves a problem, that has made the authors wealthy in a very short amount of time. If someone like Rockefeller started out today, I think we would probably characterize his operation as a "startup", and the founders of Bitcoin are doing much the same thing that he did.
gojomo 13y ago
However, as soon as you mine (or buy) Bitcoin, and if you decide to hold them, you are now incentive-aligned with all other Bitcoin holders in desiring a future where Bitcoin is more valuable. That's much like the incentive-alignment of founding (and early-investor) equity in a startup venture. You know what your share is, and want it to be worth more. So even separate from any salaries or formal-obligations, you can be expected to improvise to help collaboratively create the world where your shares are more valuable. Other equity is similar: it's a claim on a certain package of legally-respected rights. (You can vote in board elections; you can collect dividends; you receive pro-rata value in case of liquidation.) Those rights might be worth a lot, in certain possible futures, or nothing, in others. If you're an employee-stockholder, you may be a bit more motivated that someone on a fixed salary. If you're an outside shareholder, you'll still "talk your book" and perhaps even direct other investments in ways that synergistically boost the startup. People describe Bitcoin as crypto-currency or crypto-commodity, but its biggest impact may be as crypto-equity.
- dragontamer 13y ago
  And right before you buy it, you are incentive-aligned to crash BTC so that you can buy it cheaper than it's actual value. Come on, markets are more complicated than that.
quantumpotato_ 13y ago
Thanks for posting this. I see a lot of "X is Y" posts in news articles. http://en.wikipedia.org/wiki/E-Prime http://en.wikipedia.org/wiki/E-Prime warned us about this - making false associations. X is NOT Y. Defining X === Y makes for weird neurolinguistics and corrupts your map of the world with bad pointers.

drewcrawford 13y ago

> The only problem here is that coffee is a commodity, not a startup. Anyone can grow it and sell it. The better comparison is to oil. Oil is a commodity, in that anyone can buy it and sell it: but there is a fixed amount of it, and one can only acquire oil by taking oil from the fixed supply. Further, the earlier you got into oil, the more money you made, and the same is true of Bitcoin: the authors have made out to the tune of [100M or more](http://bitslog.wordpress.com/2013/04/17/the-well-deserved-fortune-of-satoshi-nakamoto/ http://bitslog.wordpress.com/2013/04/17/the-well-deserved-fo...) simply by being the first miners. So I don't know exactly what kind of definition you want to use for "startup", but bitcoin is certainly software, that was written by a small team of people, that solves a problem, that has made the authors wealthy in a very short amount of time. If someone like Rockefeller started out today, I think we would probably characterize his operation as a "startup", and the founders of Bitcoin are doing much the same thing that he did.

gojomo 13y ago

However, as soon as you mine (or buy) Bitcoin, and if you decide to hold them, you are now incentive-aligned with all other Bitcoin holders in desiring a future where Bitcoin is more valuable. That's much like the incentive-alignment of founding (and early-investor) equity in a startup venture. You know what your share is, and want it to be worth more. So even separate from any salaries or formal-obligations, you can be expected to improvise to help collaboratively create the world where your shares are more valuable. Other equity is similar: it's a claim on a certain package of legally-respected rights. (You can vote in board elections; you can collect dividends; you receive pro-rata value in case of liquidation.) Those rights might be worth a lot, in certain possible futures, or nothing, in others. If you're an employee-stockholder, you may be a bit more motivated that someone on a fixed salary. If you're an outside shareholder, you'll still "talk your book" and perhaps even direct other investments in ways that synergistically boost the startup. People describe Bitcoin as crypto-currency or crypto-commodity, but its biggest impact may be as crypto-equity.

dragontamer 13y ago
And right before you buy it, you are incentive-aligned to crash BTC so that you can buy it cheaper than it's actual value. Come on, markets are more complicated than that.

quantumpotato_ 13y ago

Thanks for posting this. I see a lot of "X is Y" posts in news articles. http://en.wikipedia.org/wiki/E-Prime http://en.wikipedia.org/wiki/E-Prime warned us about this - making false associations. X is NOT Y. Defining X === Y makes for weird neurolinguistics and corrupts your map of the world with bad pointers.