How Crypto Actually Creates Value | Real Case Studies

Oh, here we are running into the underground crypto moonbased research laboratory to drink. Bitcoin began as an abstract idea. Digital scarcity without authority. At first, belief was fragile. Adoption was small. Value fluctuated widely. But persistence changed perception. As more participants trusted its supply rules and censorship resistance, Bitcoin transitioned from a novelty to a monetary system. value stabilized because belief became collective and enduring. Ethereum followed a different path. So over the course of the week in the series that we've been doing this raising your crypto IQ about value in cryptocurrency or digital assets or whatever you want to call it, call it whatever you want. Come up with a cool name for yourself since everybody seems entitled to do so. Um what makes value real anywhere? Anywhere across the board? It's kind of like a collective agreement or somebody with

authority like a government saying hey this is worth money right like property worth money US dollar worth money like whatever it is so it's rather like the strong arm of an authority or just a collective social agreement that it's worth money and therefore value is a little bit more abstract than I think most people understand matter of fact the one person who came in here pretty hot the one the first day that we started this series really proved the point cuz like he really couldn't understand how value could not could he he he really was coming from a place where value is just value, right? Things are just valuable because they're valuable. And he really didn't get many of the nuances of value, you know, and uh you know, like value is not connected to scarcity. I've never heard

such a thing. It's always the opposite. Um and and maybe I'm mixing it up. Maybe that's what he meant. But either way, value is very abstract. And that's what we keep talking about. Why am I saying this? Because that's basically what we've been saying all week is we're trying to lay out the scenario for us as speculators to understand what is value. Because that's what you're chasing, right? You're chasing number go up. What makes the number go up? Perceived value, agreed value, literal value, people putting money in the market cap, value going up. And that just doesn't happen for no reason. And it's not a mystical thing. So what we're saying here is that it's at first an abstract idea and then it moves into a scarcity without any authority, right? And then adoption comes in. And as adoption

comes in, you get into this loop where like people use it and because they use it, other people use it. And because other people use it, then trust comes in and more people trust it because a lot of people use it. And then that makes it seem valuable and you get in this loop that just runs something up. But at some point there's a separation between everybody's bullishness and where they think something is going and how fast it can actually accomplish it. And at some point it seems like people's expectations go to the moon and the asset isn't ready to go there yet, right? They only built half the rocket. They didn't fill it full of any fuel or anything and it's just not ready to take off and go to the moon. But people are impatient and they're

not ready to wait for it to finish being built, put fuel in the rocket, and start that thing up. They're not ready for that. And so people lose confidence. They start jumping ship. And in the meantime, somewhere else in digital asset land, something else pops up that looks promising and people jump ship and go to the next thing. Anyways, I'm going to follow I'm going to follow the story now and not just whatever I want to say. All right. But Ethereum followed a different path. Instead of scarcity alone, it offered capability. Smart contracts. Developers could build programs that executed without external control. Applications required ETH for fees and computation, gas fees, usage generated demand. As more systems depend on Ethereum, value embedded itself in activity rather than just speculation. DeFi extended this pattern. Protocols enabled lending, trading, and liquidity

markets without intermediaries. Tokens represented participation in financial systems and when they say without intermediaries we're talking about decentralized exchanges. All right. Value flowed from activities itself capital moving markets forming transition transactions executing adoption creating economic gravity. Thousands of other tokens attempted similar growth but failed. They remain dependent on attention rather than usage. And this is the distinction that we've been trying to drive home. uh more than just this week about value, but also several other series that we've done touch on the same point. Is that is the coin that you're speculating on that you are really excited about? Is it depending solely on hype, attention? It's like a pyramid scheme. Bringing new people in is the only thing keeping it alive. And the moment it doesn't keep bringing new people in, it's dead, right? or does it have utility?

Does it have use case? Does it do a thing? Right? It's does it do anything at all? Or is it a useless memecoin? Keep this in mind. All right. They remained dependent on attention rather than usage. Demand faded when speculation slowed. Without structural reinforcement, value collapsed. A difference between persistence and a collapse is not marketing or hype. It is whether a system creates demand that continues even when attention moves elsewhere. Durable crypto value is not discovered by markets alone. It is built by systems that people keep using. And this is like something I've learned a lot from doing this show. And I knew a little bit in the beginning, but I really didn't have it hammered in over and over and over and over like I do now from doing the talking points. If you're using a website, a

service, anything in crypto, right, and you're like, "This is cool." Is it because they're giving you an incentive to be there? Is it because like every time I go here and I click a few buttons, they give me some reward points and um I know that they're saying they're going to do a airdrop based off of these air points, like whatever, like Lighter did. Don't think that worked out so well for Lighter if you look at where Lighter's at. Anyways, um or does it actually do something cool that even if I went from getting an incentive for being here to I actually had to pay a small amount of money to be here, would I still come here? Think about it. So, like, let me put it another way. There's a coffee shop down the street, right? And you

go there, they have amazing coffee and they just opened up and it's the best coffee you've ever had, right? and they give that coffee away for free for their first month, right? They're giving everybody free coffee for a first month because getting everybody hooked. They want to make sure everybody has had their coffee and they know people are going to come for free when things are free, right? Freelicious is delicious. So, you go there for a month, you get your free coffee, and you're like, "This is this is awesome. All right. I hated paying $6 at the other place down the street for coffee." And then the month is over. The trial is over. The opening ceremony is over. and they're like, "Coffee is $8." And you're like, "Man, the place I normally go is $6 or $5.50. I

could just go back there. It's a little bit cheaper. $8 is a little steep, but their coffee is much better." Right? You've you've gone there for a month, got it for free, and you're like, "This is better coffee. I don't really want that other coffee. Even if it's six bucks, I'm willing to pay $8 for this coffee every day." But what what got you there? It was the free coffee for a month. Otherwise, if they would have opened and from day one, they would have just been like, "We have $8 coffee." You would have been like, "No, thank you. I'm just going to stay at the place where I'm already at." So, what's the point that I'm trying to make as I made that metaphor up completely on the fly? The point that I'm trying to make here is

that you bring people in, right? You give them a reason to come over. That's normal business. That's normal marketing. But just like that coffee shop, you can't give away coffee every day all the time in your business indefinitely and expect to ever make any money unless like it's just a random thing you give away and then you make a lot of money on something else. Okay, those are different business models. I'm not trying to get into the nuance here of different business models, but generally at a coffee place they're not giving away coffee for free. that is their main source of business. Does that make sense to anybody? Anybody care about a thing I just said? If not, we're talking points, right? Let's continue to raise that crypto IQ on a Saturday night. If you are here with me

on a Saturday night, smash that like button because you are exceptionary. If anyone knows about it, people check check it. Check it. Uh if anyone knows about I I I assume he means um ATLA. Yeah, if anybody has the sauce on ATLA, please let us know. All right, so Bitcoin monetary value through scarcity and trust. Look how they put that together. Only tinfoil hat was here. All right, Bitcoin created value as digital scarcity. Its fixed supply, decentralized issuance, and resistance to control established credibility. Over time, adoption reinforced the trust. Monetary belief stabilized value. Ethereum was all about utility though, right? So, Bitcoin very much won through censorship, resistance, and scarcity. Ethereum got its value mostly from utility through computation or the ability to process smart contracts, right? What Bitcoin lacked and still very much does. Ethereum introduced programmable smart

contracts demand emergence from applications requiring execution fees and settlements. Developers built systems that require ETH usage. Utility generate generated sustained demand. Of course, utility is probably one of the things that that really generates the most demand, right? Because utility is like better said it's just usefulness, right? It's just useful. So, of course, it's going to have people use it and that's going to validate it, right? DeFi financial value through activity. See how we're going through the different types of value. This was very much what I was trying to explain to Tim Foil hat. DeFi protocols created value by enabling lending, trading, and liquidity provisions without intermediaries. Tokens represented participations in financial activity. economic function created the value, right? So, it it it functions economically. It's DeFi, so it's decentralized finance, lending, trading, and liquidity. Of course, that's going to

have value because that's useful. If you can get a loan, you can stake your money and earn yield. People are going to come running from the hills. Network effect across systems. Bitcoin gained users and liquidity. Ethereum gained developers and applications and DeFi gained capital in markets. Adoption compounded value across all of the networks reinforced persistence. 333 utility tangible value in my opinion. Yeah, I'm with you there. That's why I keep trying to drive home is like if you go to a website or whatever the use case for a certain crypto project is and you look at it and you're like this is not really very useful. Um shout out whatever that fandor.ai was, right? If you're not bullish on it, maybe a lot of other people are not very bullish on it, right? And that means in the long

run when they remove the hand that's feeding everybody, right? There will be nothing to eat and nobody will come. Kind of like the coffee shop giving away the free coffee. For a lot of people, it doesn't matter how good that coffee is. As soon as they quit giving away the free coffee, a huge majority of the people who come in to drink the free coffee will stop coming. Right? So why many tokens fail? Failed tokens typically lacked durable utility, sustained adoption, strong incentives, and credible narratives. Without reinforcing structure, value fades, compounding value mechanisms, right? To get compounding value, right? Isn't that one of is that like the ninth wonder of the world? Successful crypto systems share increased usage, growing integration, liquidity, depth, and community persistence. Also, um, continued development from developers, which I guess could be the same as

growing integration, right? But, you know, those developers sticking around and continuing to build is very important. You've been spot on with multiple episodes on value because there truly are many ways for something to have value in one way or another. Awesome, man. I love that you get it, plague dogs. That's my man. Thank you for uh sticking around and I'm glad that you said that. So maybe some other people uh will tune in to the fact of there are many different ways that value is created. Structural and speculative value, speculative value rises quickly but fades because the value is really just FOMO based off of speculation where structural value grows slowly by endurance. Right? Grow slowly but endures. I changed it because that's the way I wanted it to say, right? Case studies show durable assets rely on sustained

participation. So structural value meaning it did something of value within the structure of an ecosystem. So it remained because people needed to use it even if it wasn't the most exciting. Think of like a bridge, right? A bridge is not a game. It's not like the funnest thing in the world to do. A lot of times, especially for newbies, it's kind of an anxious, nerve-wracking thing to do. Um, and if you're trying to use the main bridge on Kronos ecosystem, you might just lose your money. I'm just throwing some shade out there because I'm still annoyed with that. But anyways, um, it has a function that matters and therefore it's going to stay. It's going to be there because people need it. And nobody cares, and I used to say this a lot that I don't say it so

much anymore, but I got to bring it back. Nobody cares about infrastructure until you need it, right? Nobody gives a damn about a bridge from whatever asset to another asset until you're desperately trying to move Ethereum to Harmony 1, right? Like until you're trying to move it to some very obscure new upcoming blockchain that just went live and there's a bridge and then you're able to do it and then all of a sudden you're like, "Thank God for this bridge. I'm so smart. I was able to figure this out." But you're not really you're just very lucky that somebody had built the infrastructure. They had enough foresight to see that it was going to be needed. So structure determines longevity. Lessons across the different case studies here. Durable crypto value emerges from real demand, credible design, network growth, and

long-term trust. These factors repeat across systems. Core insight here. Crypto assets hold lasting value when systems create demand that persists beyond speculation. And there it is, guys. That's the