I’ve spoken with a lot of crypto bros since my departure from Bitnation, almost five years ago.
Bitnation aspired to create “DAOs” (distributed autonomous organizations) on the blockchain, and while we technically accomplished this task, none evolved from cosplay to actual expressions of self-governance.
I departed in 2017, and immediately set upon the task of addressing what I call “the last mile” problem, so I am frequently invited to discuss how top-down crypto projects will deliver to their target market.
I’m old, and frankly I find repetition a little annoying, and so through gritted teeth and furrowed brow I listen to their vision for how their version of magic internet money is going to change the world.
They aren’t talking about Bitcoin, nor Ethereum — both mainstream examples of fairly-successful cryptocurrencies (as alternative currencies to the US dollar).
These projects have created their own currency, and each project comes with a zany plan for saving the world.
To be fair, for the years I’ve been at this, I’ve encountered a lot of well-meaning projects, all with the same Achilles heel: “the last mile.”
To date few of them (none?) have properly considered “the last mile” problem,” and as a result, many of these projects have failed.
First, let’s rewind and revisit the origin of the phrase “the last mile,” a phrase originally from the domain of telecommunications:
“The last mile is typically the speed bottleneck in communication networks; its bandwidth effectively limits the amount of data that can be delivered to the customer.
This is because retail telecommunication networks have the topology of “trees”, with relatively few high capacity “trunk” communication channels branching out to feed many final mile “twigs.”
The final mile links, being the most numerous and thus the most expensive part of the system, as well as having to interface with a wide variety of user equipment, are the most difficult to upgrade to new technology.”
That’s from telecommunications; in this discussion, I’m using “the last mile” as metaphor.
In this context “the last mile” refers to the benefit actual people might gain from making use of a particular newly-created form of magic internet money, more commonly known as “cryptocurrency,” to the extent that they make this currency part of their daily mode of economic function.
To be more precise: how do ordinary people come to use crypto to purchase goods and services on a regular basis, as opposed to using crypto as a basis for speculative investment (the current dominant model).
Because, most people don’t use crypto to buy goods and services; most people use crypto to make more money.
And again, I’m not talking about Bitcoin or Ethereum; I’m talking about a newly-created alternative crypto, and man: there’s a ton of them.
Given my experience, I would say that the following serves as a decent framework for how most of these projects claim this is their solution for addressing “the last mile.”
- We get people crypto wallets, ok? They get the wallets and they put them on their phones. We made our own wallet, and it’s a banger. It’s a different kind of wallet than the thousands of other crypto wallets. Ours is important.
- The people buy our crypto, which we are calling “bucks”
- Some people are “airdropped” a quantity of “bucks” in exchange for serving as an evangelical “ambassador”
- The abundant supply of “bucks” will stimulate innovation within our “marketplace of bucks” that we’ve not yet created, which is why we are speaking with you, Mister Dahlgren.
- We believe that our system will be exciting for those who are tired of the central bank, etc etc
Of course my example is ridiculously over-simplified, but not by much.
In my experience, most (all?) of these projects have failed to put themselves in the role of actual people who are at “the last mile,” and that’s why they fail.
And so my contribution to these discussions is this: I ask how they plan to address the fact that tens of millions of Americans are having a hard time paying bills.
As a rule I’m told that the low-income population isn’t really their target.
I press on this topic, because at first they will try and convince themselves that their “bucks” marketplace will enable them to sidestep the current system.
But what’s step 1?
What’s step 2?
What’s the coherent plan for meeting the needs of those who are at “the last mile?” Because there are indeed tens of millions of them, and their needs are dire.
Frequently, there is no such plan, and therein lies barriers to success, or opportunity, depending upon an entrepreneur’s temperament.
I use “the last mile” metaphor intentionally, because it invites the other parties to review literature on the topic, and learn how other entrepreneurs were able to break the spell, particularly in the domains of telecommunications and supply chain management.
I’ll give you a hint: the solution for “the last mile” did not come from the top; it came from the roots, and from the bottom-up, in countless hybrid forms that eventually consolidated as the markets approached maturation.
The metaphor isn’t precise, and of course none are, but history doesn’t so much repeat itself as much as reverberate in a unnerving manner for those with the gift of discernment, for:
What has been will be again, what has been done will be done again; there is nothing new under the sun.