Nov 5, 2023Liked by Drago Dimitrov

One big thing about data on the blockchain is that any "truths" on there are only "true at time of writing".

Transferring ownership of it doesn't update the original record of ownership. It adds a later entry saying "this ThingeyThing is now owned by Andy". So, you have to go through everything to get to the current truth. That's the "Ledger" part of blockchain definitions such as "shared, immutable ledger" - it's a giant stack of books that can't be changed so you have to find the most recent entry.

Excel is not a great analogy because people are used to it working (mostly) but don't stop to think about data values changing. It would be vastly more painful if every new value created a new copy of the sheet.

Also, because storing data actually ON most blockchains is incredibly expensive, what happens is they usually have an external document with the important details, so there can be 3 or more things in the relationship:

1. the blockchain entry (think of it like a stamp of authenticity)

2. a document with all the details including the blockchain entry address

3. some other digital asset (the NFT image like a bored ape) described by 2 and certified by 1.

A scary number of NFTs are no longer usable beause 2 was lost. The majority of people I've discussed NFTs with don't know about this vulnerability because of the usual "on the blockchain" terminology. However, you will find that big companies like A16Z carefully use terms like "using the analogy of storing on the blockchain" so they can't be accused of lying.

Expand full comment

Thanks Andy

You make a interesting point about the nuances of what actually gets stored in practice (e.g. like in the case of many NFTs where what's stored is merely a link or JSON pointing to some other off-chain storage solution).

As with any analogy, there will be limitations, but I hope the idea of a permanent, immutable spreadsheet will serve as a useful heuristic and starting point for the layperson.

Expand full comment
Jan 2, 2023Liked by Drago Dimitrov

HI Drago,

You left out the fundamental thing. The whole purpose of Fiat currency is to be able to trade for goods and services with other people, and crypto is supposed to be for the same purpose as long as the people you are trading with agree to it having any value. The case for crypto or NFT's having any value is that people accept them on faith, really as with any fiat currency. There is a problem with your example of Ford. Ford provides a product, Ford is transportation and it's logo just represents the company that sells you the ability to drive. It is not an "intersubjective myth" it is the means to have free movement. That is not the same as an NFT rendering of a car, it is freedom of movement in the real world not the metaverse.

The basic premise of NFT's are that people value them and think they are worth large sums of money and will hold value, as with many intrinsic things. The same is true "great art", some people pay large sums of money for "art" that I think is crap, but I think exotic cars are valuable and some think that is foolish. The difference is that we are getting tangible items and blockchain is not.

My point is really just that the only reason for cyrpto or fiat value, or gold for that matter, is that someone is willing to trade with you for something you need. If they are not willing to trade then you have nothing. Being able to trade is the most important thing.

Expand full comment

Thanks for your feedback. I see I could have been clearer in some areas. My response:

1) Re: Cryptocurrency

Yes, I agree with regard to what the stated and commonly intended purpose for crypto is. My point in this piece was to focus on underlying technical principles and assumptions of what makes all this possible. People’s intentions behind using the technology would come as a separate layer.

i.e. Focusing more on “What is it?” as opposed to “Why will people use it?”

For example, right now, you have the ability to, e.g., create a supply of 1,000 Fallbrook coins; and you can do this **for whatever reason you want to**. You don’t even have to intend for it to be used as exchange value.

Of course, if you wanted other people to “care” about Fallbrook coins, you would need to come up with a compelling reason for them to do so. And naturally, the ability to exchange Fallbrook coins for something else that people already believe has value (i.e. to purchase a good or service with a Fallbrok coin) would be one of the most persuasive reasons possible that you can come up with.

So in practicality, the “purpose” of crypto has been for trading, but in theory the “purpose” can be whatever you want it to be. The realized utility of crypto depends on how many people will choose agree with your “purpose”.

The point that I want to emphasize is that **you, as an individual, now have the means to create the token**. Before, only a government or large institution would have such means.

I would also say that we can separate the concept of “value” from the concept of cryptocurrency (fungible token). First we deal with the technology of a “fungible token”. Only then do we discuss whether that token has “value” or not. i.e. you can have a valuable fungible token, or a worthless fungible token… But in both cases we should understand what “fungible token” itself means, and specifically how its production process has been transformed and democratized through the advent of the blockchain.

I hope that readers of this piece will come away with a better understanding of what is a “token” and what the creation process of a token looks like.

2) Re: Ford and NFTs

I admit it’s hard to precisely elaborate on this point.

I want to try again to point back to the question of “Where is Ford” or “What, precisely, do you mean when you say ‘Ford’?” (The idea is that ‘Ford’ is an intangible reality… an intersubjective myth. While I can touch the physical car produced by Ford… I cannot touch “Ford” itself)

You wrote that Ford is “the company that sells you the ability to drive.” Where is this “company”? When I go to buy the car, where is the “Ford” that is selling to me?

I would be interacting with a human being—a salesperson—who is functioning as some “representative” or agent of “Ford”, but I am not interacting with Ford directly or tangibly, since Ford is an intangible reality, that only exists in our minds, because we agree to pretend it exists.

Why do we agree to pretend it exists? Because there is a “legal entity” (intangible) that has been “recognized” by the government of the United States, as well as individuals (employees, shareholders, customers, etc.) who each have agreed to move around money and build things, all in the name of “Ford”.

I also want to poke a bit at the comparison of “NFT rendering of a car”. I think the common misunderstanding of NFT is to think that the NFT is the object or thing that represents it. I'm not suggesting that this is your understanding, but I do want to offer that clarification.

e.g. With visual collectibles, people tend to think that the piece of art or the digital image is itself the NFT.

But in actually, the NFT is the thing that is behind the piece of art / item.

The NFT is the container for the intersubjective reality / meme / myth / feeling / meaning behind the identifiable symbol/picture/asset that often accompanies it.

Ford is the story, brand, shared mission, tribe, network etc. behind the logo.

Ford is an NFT.


To illustrate this better, I’ll borrow another example from 6529:


What are $200 Jordans?

- A shoe +

- A distribution network to get it to you +

- An unlimited open edition Michael Jordan NFT

Again, there is nothing wrong with myths.

Michael Jordan, the myth, represents generalized excellence in sports and, specifically, in basketball.

I bet people play more basketball and aim higher with MJs on their feet than a generic brand.

That is the myth at work




Expand full comment