Money Reimagined: Musk Masters the Attention Economy

Bitcoin’s fresh surge shows the energy of celeb and the absolute best arrangement, esteem it or now no longer, influencers make price in the fresh economic system.

(Rachel Sun/CoinDesk)


Money Reimagined: Musk Masters the Consideration Economy

Welcome to Money Reimagined.

Well, this previous week felt historical. As bitcoin surged to all-time highs and found its arrangement into TV studios and onto newspaper entrance pages, it felt esteem we’d crossed the chasm and long gone mainstream. This took living in predictably queer and wild ways, with memes and attention-grabbing stunts – as discussed in the column under. Regardless, it regarded esteem no one would possibly maybe maybe additionally stop talking about bitcoin. 

Ethereum had a giant week, too. The Chicago Mercantile Alternate launched ether futures, which helped the token hit all-time highs as successfully. And the fun around decentralized finance (DeFi) and nonfungible tokens (NFTs) lawful obtained louder. 

All of that exercise is putting ever more stress on the Ethereum community, the set transaction bills – in the blueprint of “gasoline charges” –  are surging (demand under). There’s an pressing need, in diversified phrases, for the scalability promised by Ethereum’s prolonged-awaited 2.0 give a enhance to. 

That’s what Sheila Warren and I discussed in this week’s episode of our “Money Reimagined” podcast. We requested Danny Ryan, a key Ethereum core researcher and communicator, to present us the lowdown on what’s occurring with the massive give a enhance to, and more. 

Bear a hear. After studying the publication under.

Elon’s masterful meme rally

Are we now no longer entertained?

When news broke Monday that Elon Musk’s Tesla had invested $1.5 billion in bitcoin, it capped off weeks of cryptic crypto tweets from the incandescent CEO and it with ease distracted other folks from some now no longer-so-definite news about his company. As he steered a huge bitcoin label surge, he proved that for all his talents as an entrepreneur, Musk’s ideal skill lies in mastering the “attention economic system.” 

In the eye economic system, all americans – literally, all of us in the actual person-generated world of social media – are competing for the one scarce commodity that digital abilities can not replicate into abundance: our time. The eye we give to entertainment and data is in scarce supply; account for of it dictates how money and energy is disbursed all the absolute best arrangement during the web. 

Musk and others of his ilk – judge Dave Portnoy, Kim Kardashian or Donald J. Trump [no social link available anymore] – are the ones successful this competition. They’ve developed huge audiences and possess realized deploy shareable memes, horny photos or shock commentary to trigger dopamine releases among their followers, whether or now no longer it’s from amusement, anger, arousal or some diversified emotion. 

Alongside the absolute best arrangement, their hyper-engaged communities share their chief’s work, establishing viral effects and, in a roundabout arrangement, attractive other folks to get rid of things: shares, nation club memberships, celeb-branded heady scent or crypto tokens. Right here is how the game is played, how the dominance of messages and their social distribution is converted into money and energy. 

Now, an increasing selection of of these attention masters are turning their virality machines to crypto. The celeb impression of Price Cuban, Gene Simmons, Snoop Dogg and Lindsay Lohan every individually had a noticeable impression on certain crypto resources this previous week. The successful meme in all that no doubt went to rapper Snoop Dogg, with a paean to dogecoin that included a bawl-out to Musk:

Scarce attention meets digital scarcity

As Felix Salmon well-known in his publication for Axios this week, crypto is made for this because it enables attention masters to in actuality convert clicks, likes and shares into tangible rewards. The exercise and enthusiasm they plan to a mission creates buzz and steers consumers to tokens. In essence, they power scarce-supply human attention into scarce-supply digital resources, a wedding that ends in label gains. 

This more or less behavior goes far beyond crypto. Consideration economics has been a component for a whereas, successfully sooner than “meme investing” moves by Reddit neighborhood WallStreetBets’ two weeks in the past fostered a great circulation to power up GameStop’s stock. (“The Consideration Economy,” a book by Thomas Davenport and John Beck, regarded in 2001.) The utilize of viral, social community-driven communication is mostly the foundation of the tips economic system. 

And it’s now no longer necessarily a definite vogue. This trade model creates huge social distortions and shifts incentives both for individuals who account for energy inside of the system and those that don’t. 

Beyoncé can develop $1 million from a single, short Instagram put up and image. That’s a great more atmosphere splendid draw to generate money than the unparalleled work that goes correct into a tune album. How does that possess an impress on her priorities? (Conceal: the trade-off may possibly be very diversified for the overwhelming majority of musicians, who possess nowhere arrive Queen Bey’s 165 million followers.)

Judge additionally of Donald Trump and what he represents. I would argue his presidency wasn’t about political energy in the light sense; it used to be a mechanism for amplifying his attention engagement energy. His tweets regarded intentionally designed to make outrage and division among both his hundreds of hundreds of exact supporters and his vehement opponents. The relentless, irresolvable arguments he fomented generated traffic and engagement, all of which he monetized in diversified ways.

Neighborhood = price

That crypto is fueled and buffeted by all this noise raises many points. It’s now no longer necessarily frightening, but for individuals who’ve confidence in the abilities’s probably, it does save into tantalizing relief some core questions about who gets to affect its vogue. Crypto prides itself on meritocracy: Basically the most efficient builders, basically the most efficient suggestions are supposed to make a choice. It’s now no longer about repute, seniority and undoubtedly now no longer celeb. How impress we square that ethos with all this unseemingly self-promotion?

On the unfavourable aspect, a Musk-led rally appears to be like and feels to about a esteem an empty “pump and dump” 2d, one which the Tesla impresario or anyone in his circle would possibly maybe maybe additionally exploit, leaving meme-following investors conserving the safe. It’s now no longer a factual look crypto in general.

Nonetheless whenever you occur to steal into the principle that that bitcoin will at some point be a reserve asset for companies and other folks, despite how it gets there, then Tesla’s get rid of would be viewed more positively. Musk is motivating a lot of new Joes in a direction of of democratization. Mass, social participation in these label rallies is a decentralizing force, simply because it diminishes the dominance of latecomer institutions. 

What makes these arguments sophisticated is a circularity insist around the set price comes from in crypto initiatives. Unlike a stock such as GameStop, the set price will in a roundabout arrangement be dictated by expectations on whether or now no longer the company can make profits at some point, price in a cryptocurrency esteem bitcoin is intrinsically linked with the expansion of its particular person community. The wider the adoption, the larger the community, the more is at stake, the safer it is miles and the more it is miles permitted as a store-of-price and, presumably at final, as a medium of change.

Building a community is the single main component dictating price for a cryptocurrency. So, in theory, an episode of meme-driven mass social vitality that stirs popular engagement, as silly as all of it may possibly well maybe seem, would be a path to success. 

At the end of the day, despite the fact that, price can’t be separated from values, from the underlying account of why a crypto asset is price proudly owning. If a crypto community expands on the principle that of a viral gross sales pitch on my own, that diminishes and overshadows the core technical substances of the mission – teach, Bitcoin’s censorship resistance or its principles of self-custody and look-to-look change.  

Enact meme rallies develop regulators more or less seemingly to intervene in a crypto token’s development? And what does that mean for the prolonged-time frame dreams many of us need to demand occur, such as financial inclusion? Or is expansion and adoption, despite how it grows, basically the most efficient component that issues at this point?

What we can teach is the abilities itself doesn’t care what we impress with it. It’s as a lot as us to steal whether or now no longer to race with Elon “to the moon” or steal a more prosaic direction to mainstream acceptance.

A flippening 7,000 years in the making

As I’ve written sooner than, it’s unfair to steal bitcoin’s aspirations to turn out to be a “digital gold” store-of-price by its most fresh, volatile label efficiency. This would possibly maybe maybe additionally honest steal time for bitcoin to turn out to be permitted extensively satisfactory as a universal reserve asset, great as it no doubt took gold a truly prolonged time to turn out to be a extensively permitted foreign money hundreds of years in the past. Bitcoin is now no longer but digital gold. It is miles changing into digital gold. 

The author Grant Bartel has give you a easy arrangement of tracking that changing into: a  proxy called “Flip Development” that measures bitcoin’s price versus gold based completely on market capitalization. Right here is from his web exclaim.


What’s placing, for certain, is the acceleration. At 7%, the flip growth ratio level-headed has a prolonged draw to transfer. Nonetheless when when when put next with the 1% ratio it held a one year in the past, it suggests a accurate shift in account would be occurring. 

The Conversation: ETH gasoline charges

(Rachel Sun/CoinDesk)

Whereas bitcoiners, dogecoiners and NFTers had been obsessing with Elon Musk, Snoop Dogg and Gene Simmons this week, the “Degens” riding the DeFi craze on Ethereum had been consumed with but one more topic: gasoline charges. Surging exercise formula that the already overburdened Ethereum blockchain is changing into far more congested. And when that occurs, the miners who bustle the computational community originate to rake in higher charges as customers jack up charges to total transactions.

DeFi enthusiast @JeanneDeBit save the arithmetic insist of high gasoline charges in stark phrases:

And then she provided a rationalization, which, even despite the fact that in jest, used to be moderately spot on. Costs are indeed a blueprint of natural, on-chain laws. They add friction to the system to defend exercise inside of the limits of ability.

Meanwhile, Messari CEO Ryan Selkis, provided a special steal: that, whenever you occur to’re incandescent, you may possibly well provide you the option to join the “yield farmers” who play the DeFi market to merit on curiosity fee arbitrage alternatives whereas the larger insist of Ethereum charges works itself out. 

Nonetheless, in a roundabout arrangement, acknowledged Ryan Sean Adams, there’s now no longer great you may possibly well provide you the option to impress in a booming market.

Associated reads: The blue-chips diving in

The memoir drift at some point of this crypto-mainstreaming week used to be paunchy of blue-chip companies. 

Mastercard acknowledged it may possibly well maybe allow crypto funds for merchants on its community… 

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