Will the Next Empire be Built With Tokens? | by Cathy Tao | beyond hype | Medium


Entrepreneurship has taken many interesting and unexpected twists and turns throughout history. Those with a keen aptitude for solving society’s problems and mongering their wares became increasingly more sophisticated as their resources and knowledge expanded. Since as early as 17,000 BCE, the fruits of their innovation have drastically improved living conditions and leapfrogged progress for mankind.

Along the path to the entrepreneurial pinnacle of enlightenment, many fortunes have been made via a myriad of rent seeking and arbitraging methods, and over time, these methods have become more and more technologically driven, rules based, and intangible.

Grave robbing, toll collecting, usury, and profiteering experienced their heyday until they were viewed as too vulgar and controversial. Toiling at factory building and railroad track laying were a megalomaniac’s wet dream until they seemed too time and labor intensive. Then the eyes of the manufacturer-industrialist sparked with longing when they saw how much Wall Street financiers were making simply with their clubroom chats behind closed doors and an army of lawyers.

Fast forward to the present, where losing your iPhone or getting blocked from Instagram is more stressful than losing the keys to your house or being late on your rent. In modern times, the sheen of respectability that the 19th century titans of industry commanded has been replaced by the nerdy T-shirt adorned, barefoot tech moguls of the Zuckerberg era. Masters at manipulating 0s and 1s, they are practicing the Silicon Valley world domination mantra as they feed our ego-driven desires for social inclusiveness, quench our thirst for free knowledge and bargain shopping while surfing in bed, and keep us hopelessly addicted.

Just like how grandmas and laid-off coal miners didn’t understand the hoopla about Facebook nor why online shopping took off, a vast majority of uninitiated Gen X and baby boomers still view Bitcoin and the cryptocurrency mania it spawned with an unabashed smirk and tulip-laced skepticism.

Outside of crypto circles, what many don’t realize yet is just how fiercely determined and focused a group of die-hard cypherpunks are in realizing their vision for a better world by applying the science of secrets, also known as cryptography. A key component of any military arsenal and strategy, cryptography can empower ordinary people by greatly increasing their freedom, privacy, security and productivity. So powerful are the abilities to encode and decipher secrets that if you are an expert cryptographer, you can be considered armed and dangerous. The rest of the world will be shocked at how quickly cryptography and the digital currency and distributed ledger technology it enables will take hold on society and cause major changes in how we organize ourselves, allocate resources, make money, pay for goods and services, save and invest, communicate, transact with one another, interact with our governments, and go about our everyday lives.

From 2014 to 2019, the cryptocurrency market capitalization grew from $5.54 billion to $237.1 billion, an increase of more than 42 fold. By any measure, this is an astonishing rate of growth. However, viewed in the context of the global economy, the cryptocurrency market is still nascent, representing only 0.3% of the global economy estimated to be worth $80 trillion.

Since the Bitcoin network was launched in 2009, many Bitcoin fortunes have been made. Many of the lucky people who mined or bought bitcoins in the earliest days and held on to most of them are millionaires and billionaires. Even more exhilarating and surreal than the stuff dreams are made of, $1000 of BTC back then is worth $2.96 billion today.

The meteoric rise of the cryptocurrency market to its all-time high at the end of 2017 minted many new billionaires and prompted Forbes in February 2018 to inaugurate it’s first ever list of the richest people in cryptocurrency.

It is true that wealth can be defined in many ways other than monetarily. Aptly, Forbes inserted this quote from Bitcoin luminary Brock Pierce who made it to the inaugural rich list:

“This is an opportunity to be a trillionaire — someone who is positively impacting a trillion living things on this planet.”

Most of the people on the Forbes rich list made their crypto fortunes from holding large stashes of Bitcoin, Ethereum (the cryptocurrency with the second highest market capitalization), or Ripple (ranked third in market capitalization) or from building crypto exchanges, such as Changpeng Zhao (“CZ”), the founder of Binance and Brian Armstrong, the co-founder of Coinbase.

Since then, many of the names on that rich list have probably lost their billionaire status: As of December 31, 2019, Bitcoin was down 63.6% from its all-time high of $19,783 reached two years previously on December 17, 2017, and most altcoins are down much more than that.

The biggest crypto fortune was probably made by Bitcoin founder Satoshi Nakamoto whose founding stash of BTC was worth a cool $19 billion at Bitcoin’s all-time high price. Noone knows for sure who the mysterious and elusive Satoshi Nakamoto really is, though plenty of people have claimed to be him. Whether Satoshi Nakamoto is his real name or merely a pseudonym for a group of people or secret government operatives, we may never know. However, even that $19 billion pales in comparison to the net worth of non-crypto tech billionaires Jeff Bezos valued at $115.5 billion and Bill Gates valued at $110 billion.

Despite the impressive technology empires built by Bezos and Gates, both self-made, they pale in comparison to what the robber barons and captains of industry achieved during the Gilded Age in American history. In the latter half of the nineteenth century, the wealth and power accumulated by the great industrialists of that era, such as John D. Rockefeller, Cornelius Vanderbilt, Andrew Carnegie, and Henry Ford, far exceeded the wealth and power of the richest tycoons in the world today.

The net worth of Standard Oil Company founder John D. Rockefeller alone would be valued in excess of $400 billion in today’s inflation-adjusted money, about four times the estimated net worth of Jeff Bezos, the founder of Amazon.com and the wealthiest individual in the world. Although living a life of less notoriety than Rockefeller, Andrew Carnegie built a fortune rivaling that of Rockefeller’s, possibly surpassing it. Carnegie sold his company U.S. Steel to J.P. Morgan for $480 million in 1901, which was more than 2.1% of the GDP of the United States at that time, equivalent to $450 billion in economic power in 2019.

Known as the Commodore, Cornelius Vanderbilt was one of the notorious robber barons who built his shipping and railroad empire from scratch. He was the former owner of the New York Central Railroad and founder of Vanderbilt University and had a net worth of $230 billion in today’s inflation-adjusted dollars. Henry Ford invented the automobile assembly line and made cars affordable for everyone. By 1918, almost half of all cars on American roads were Fords. At the time of his death in 1947, Ford was worth about $210 billion in today’s dollars. Lastly, another important Gilded Age industrialist was J.P. Morgan. He became the most influential figure on Wall Street and his banking empire bailed out the federal government twice. At the time of his death, his net worth represented 0.3% of the GDP at that time, or about $64 billion using the 2019 estimated GDP of $21.43 trillion.

These great industrialists of the Gilded Age transformed the American economy with their development of railroads, shipping routes, oil production and pipelines, factories, steel manufacturing, coal mining, and Wall Street finance. They all were successful in creating monopolies in their respective industries. They spearheaded efficiencies at scale from consolidating big business and forming cartels. They also practiced unscrupulous and exploitative business practices to maximize profits where competitors were mercilessly driven out of business and workers received low wages and poor working conditions.

The government was hesitant to get in the way of the huge strides in economic progress underway. Whenever regulations threatened to undermine the business interests of these ruthless captains of industry, they swiftly responded by forming pacts and coalitions and used their financial and political clout to win favors and leniency from the sitting legislators and president. In those days, there were no antitrust nor labor laws to speak of and even after the Sherman Antitrust Act was passed in 1890, the courts interpreted it in a way that enabled the big business monopolies to continue to thrive.

Many of the big businesses which dominated the American economy during the Gilded Age were wildly successful and extremely profitable precisely because they were monopolies. They grew within a business, social, economic, and regulatory climate where conditions enabled monopolies to flourish. They operated and thrived in specific industries at the right time when there were few regulations, if any, governing business practices and workers rights and dominant players could skirt the social, ethical, and legal issues they caused using their money, influence, and power.

The lack of clear and cogent regulations, the hesitation among regulators to step in assertively and conclusively, and the pioneering and risk-taking mentality among entrepreneurs found today in the cryptocurrency and blockchain/DLT industry bear a striking resemblance to the environment prevailing during the Gilded Age. Thus, the timing for creating bright new empires in this nascent cryptography-enabled space may never be more opportune.The open plundering and exploitation practiced by the Gilded Age industrialists have their modern parallel in the extreme greed and “anything goes” Wild Wild West-reminiscent crypto fundraising techniques, shady initial coin offerings, pump and dump schemes, and exit scams of the past few years. Wherever the law was either gray or virtually non-existent, and before regulators stepped in, the prevailing attitude among crypto project founders, financial backers, and marketers alike was to strike while the iron was hot and grab as much money as possible while you could.

The lack of clear and cogent regulations, the hesitation among regulators to step in assertively and conclusively, and the pioneering and risk-taking mentality among entrepreneurs found today in the cryptocurrency and blockchain/DLT industry bear a striking resemblance to the environment prevailing during the Gilded Age. Thus, the timing for creating bright new empires in this nascent cryptography-enabled space may never be more opportune.

In the next few years, will empires be built with cryptocurrency coins and tokens that resemble the monopolies built by the robber barons and captains of industry from the Gilded Age? Monopolies immediately convey a negative connotation and elicit a queasy gut reaction. However, upon closer examination, a monopoly is the essence of any successful business empire that endures. Blessed by the lack of notable competition, it typically creating hundreds of thousands of well paying jobs and strong earnings stability for its employees and shareholders alike. Healthy and consistently growing cash flows and profits enable a monopolistic enterprise to have the luxury of benevolence and offer many products and services for free or at a subsidized cost, and practice social impact investing and philanthropy that can be felt on a global scale.

Ironically, the corporate robber barons from the Gilded Age who were considered the most ruthless and cunning at upending their competition were also the greatest philanthropists of all time. Scottish born Andrew Carnegie emigrated to the United States where he worked his way from bobbin boy in a textile factory to single-handedly controlling the entire American steel industry by 1897. He created a vertically integrated monopoly in steel by controlling every stage of the steel production process, from raw materials, to transportation, manufacturing, distribution, and finance. After Carnegie Steel merged with US Steel in 1901, Carnegie retired and devoted the rest of his life to philanthropic efforts. He funded the building of more than 2500 public libraries and the Peace Palace at the Hague, which houses the World Court. By the time of his death in 1919, Carnegie had given away more than 90 percent of his wealth to charitable causes. In 1889, he wrote an essay “The Gospel of Wealth” which proposed that personal wealth beyond what is needed to take care of one’s family should be treated as a trust fund for public benefit. His penned thoughts about the duty of the wealthy have been regarded as seminal in the field of philanthropy.

“The man who dies thus rich dies disgraced.”

Andrew Carnegie

Through his savvy monopolistic business practices, John D. Rockefeller and the Standard Oil Company which he founded managed to control 90% of the oil industry in the United States. Inspired by fellow business magnate “Commodore” Carnegie, Rockefeller donated more than half a billion dollars to educational, religious, and scientific causes during his 97 years of life. His funding was responsible for scientific breakthroughs leading to vaccines for meningitis and yellow fever and the establishment of preeminent educational institutions such as the University of Chicago, Peking Union Medical College (China’s first comprehensive medical school), and the public health schools at Johns Hopkins and Harvard. Rockefeller’s philanthropic work and legacy continue to this day via the Rockefeller Foundation with its multi-billion dollar endowment. Thus history has shown that the most successful monopolists can also be the most compassionate, generous, and effective at sharing their wealth for public good.

Influential startup pundit and billionaire venture capitalist Peter Thiel wrote in his book Zero To One about his belief that the goal of any successful startup should be to build a monopoly: “Monopoly is the condition of every successful business.” Naysayers claim that monopoly is evil and competition is good for society. However, in a world of perfect competition, all profits get competed away. Competition is actually the opposite of capitalism, which depends upon the accumulation of capital. According to Thiel, monopolies would be dangerous if they held back progress but history has show otherwise. When monopolies are not innovating enough, they get replaced by newer, more innovative ones. Unlike businesses facing lots of competition, monopolies have the incentive and cash flow to plan for the future and invest their locked-in profits for future success.

“Monopolies drive progress because the promise of years or even decades of monopoly profits provides a powerful incentive to innovate. Then monopolies can keep innovating because profits enable them to make the long-term plans and to finance the ambitious research projects that firms locked in competition can’t dream of.”

Peter Thiel

At present, the most valuable business empires in the world include Apple, Microsoft, Amazon, Alphabet/Google, and Facebook. All can be considered monopolies in their respective fields. Aspiring empire builders should note that none of their counterparts exist in the crypto space. While many traditional, even tech-intensive industries are considered mature and highly competitive, you get to be a baby again and learn to do something in a new way with a fresh pair of eyes via the lens of cryptography. For instance, while Facebook and Twitter have been “done” already, exciting opportunities exist for decentralized social networks to form which enable users to own, control, and monetize their own data. Blockchain and distributed ledger tech are expected to replace much of the existing centralized tech used in financial, banking, and legal systems; real estate, security, and other asset issuance, record keeping and transfers; business and personal data storage and indexing; messaging and communications; manufacturing supply chains; and many other industry segments.

Decentralization and the cryptography that makes it all possible are indeed revolutionary and mind bending: Entire swaths of prevailing standard industry practices and operations could become obsolete thanks to trustless and disintermediated transactions and smart contract automation. Yet, in the crypto industry’s present state, despite its immense potential and looming threat upon the most valuable business empires, there is still no dominant hardware computing device, operating system or protocol, online marketplace, search engine, or social network that is a serious, full-fledged alternative to the centralized incumbents. So yes, we are still very early.

Despite its vast promise, cryptography does not replace the need for a viable business model and reason to exist beyond initial hype and novelty value.Those cryptocurrency projects that raised funding by issuing a token and cannot find a use case for their token beyond the sole purpose of giving it a utility in the real world not substantially superior to all existing methods will fail when their funds run out. If your token has a plausible use case but it runs on a slow network that cannot be scaled to accommodate its target market, your project will also fail. This lack of product market fit and eventual failure may happen to 90% or more of the cryptocurrencies listed on CoinMarketCap.com.

At the time of this writing, Bitcoin is by far the largest cryptocurrency, with a dominance rate of more than 65% of the total cryptocurrency market’s capitalization. The longer Bitcoin remains dominant, the less likely it is for any other cryptocurrency to usurp Bitcoin’s leading position. Bitcoin maximalists insist there is no reason to invest in any other cryptocurrency besides Bitcoin because its the first, largest, and best one and most altcoins are scams. However, while Bitcoin may become the world’s predominant digital store of value, and also the foundational layer for a global financial settlement network enabled by Layer 2 solutions such as Lightning Network, it will coexist with many other cryptocurrencies that serve their specialized purposes, such as asset backed/asset pegged tokens, security tokens, and non-fungible tokens. How many cryptocurrencies will there be in the future? According to Coinbase founder Brian Armstrong in his blog post “What Will Happen to Cryptocurrency in the 2020s,” there will be millions:

“There will be as many tokens as there are companies/open source projects/DAOs/charities in the world (so millions) but only a handful of chains will power the underlying infrastructure for these. The winning chains will likely follow a power law distribution on outcomes, just like any other industry.”

Brian Armstrong

Beyond Bitcoin (the granddaddy of all cryptocurrencies) and its future untapped potential, what are the major opportunities left in cryptocurrency, blockchain, and distributed ledger technologies? If you want to build yourself an empire, where is the best place to start, with the odds of success highest in your favor?

Coexistence of Monopolies with Decentralization

If you wanted to create a cryptocurrency empire, then based on the history lessons of the past, you would want to build in an industry where you could achieve a monopoly within that industry sector. Your crypto venture becomes so good at what it does that nobody else can offer a close substitute because what you offer is 10 times better at what it does than anybody else. Your crypto venture ends up dominating that sector, enabling you to maximize the prices you can charge and earn the highest profits (while your competitors compete against one another for ever-diminishing profits until they wither away and die).

There is potentially one problem though: Cryptocurrency preaches decentralization and the elimination of a single centralized point of failure. Bitcoin is a decentralized peer-to-peer payments network. There is no company nor legal entity behind Bitcoin. Transactions on the network are verified by a globally distributed network of computer nodes and new bitcoins are generated and rewarded to miners who successfully solve math puzzles. Bitcoin is a permissionless public network and anyone can own bitcoins without being required to run full or light nodes nor become miners, unless they want to. There are many cryptocurrencies which are forks of Bitcoin and their networks run on similar or modified rules, such as Dash and Decred.

Other coins which cannot be mined use the popular delegated proof of stake (DPOS) model whereby those who own the coins vote for delegates to secure the network on their behalf, and the delegates share the rewards of their work with delegating holders in proportion to their “staked” amounts. The delegates receiving the most votes represented by the highest amounts of coins staked have the best chances of being chosen as a validator for new blocks.

Thus, typically a cryptocurrency network’s globally distributed community of users determines its health, usage rate, future trajectory, and the value/price of its currency. These users could be token holders, miners, stakers, node operators, or community members, and they could also hold multiple or all of these roles simultaneously. Thus crypto networks are organized differently than in a traditional business setting with well-defined roles where a company is owned by its founders and shareholders, hires employees, and sells products and services to its customers. Members of a crypto network could wear multiple hats and be both co-owners and users/customers of the network. They could also be working to improve the network and receive salaries or bounties for their services. Many cryptocurrency networks have thousands of different coin or token holders. Collectively, they could be seen as the co-owners of the network. How do you build yourself a monopoly in such a scenario?

The Crypto Empire Builder’s Black Book

  1. Master Contractor: Own the company that develops a dominant crypto network’s infrastructure and applications

Many of the largest cryptocurrencies are open source projects and their codes can be copied and pasted to create forks or new iterations of the currency. Bitcoin, Ethereum, Ripple, Litecoin, EOS, and Monero are examples of open-source cryptocurrencies. The reality is that private permissioned blockchains don’t make much sense and an open source ethos prevails in the crypto ecosystem. If anyone can freely copy and improve upon your code, how do you make money, let alone create a crypto empire? You can be the private company that builds out the open source infrastructure and the applications on top of it, charge development and consulting fees or receive a hefty portion of the coin’s supply for initial and ongoing work, offer freemium products and services, and once your expert authoritative status is established, create other independent profit seeking ventures which sit on top of the open-source infrastructure. These other ventures may include innovative technologies which are protected by patents.

On June 1, 2018, the private Cayman Islands based company block.one released the EOSIO platform it had developed as open source software. The private company distributed 1 billion tokens and reserved 10% for itself. It held an uncapped year-long token sale which started in June 2017 and ended with the EOS platform’s release in June 2018, eventually raising more than $4 billion to support the blockchain’s development. The 100 million tokens reserved by block.one are currently worth more than $400 million. According to its website, block.one will continue to develop and optimize the EOS open-source software for companies and developers to build enterprise-level blockchain solutions.

2. Early Insider: Own a large founder’s share of a dominant crypto network or acquire a significant share of the network

This role is self-explanatory. The early bird and early insider reap the most spectacular gains from price appreciation of the large percentage of a cryptocurrency’s supply they have held since the beginning. Most of the individuals named in the Forbes 2018 cryptocurrency rich list made their fortunes from being either a founder or early investor in a cryptocurrency that made it to to the major leagues. For example, Valery Vavilov was an early bitcoin miner and Brock Pierce was an early bitcoin investor; Chris Larsen and Brad Garlinghouse were co-founders of Ripple, while Matthew Mellon was an early Ripple investor; Vitalik Buterin, Joseph Lubin, Anthony Di Iorio, and Charles Hoskinson struck it rich as co-founders of Ethereum; and Brendan Blumer and Dan Larimer co-founded EOS.

3. Brand Builder: Build wallets, gateways, value-added or peripheral services for a dominant crypto network

So far, cryptocurrency has not experienced mass adoption. But when it does, the companies that had a head start in building successful brands by being the first user-friendly point of contact and doorway into the cryptocurrency world for millions of new users and investors will harvest disproportionately large rewards.

As the user interfaces continue to improve, more and more new users will buy and sell cryptocurrency for the first time via non-custodial wallets on their mobile phones which integrate fiat on/off ramps and built-in decentralized exchanges. The vulnerability of centralized exchanges to hacking incidents, insider theft, and exit scams resulting in loss of users’ funds will cause increasing numbers of existing crypto users to migrate to non-custodial wallets and decentralized exchange platforms.

Once the non-custodial wallets have onboarded new users, they will be able to introduce them to the fascinating world of dApps (dentralized applications) and gradually open up the floodgates to mass adoption. The wallets with the most user-friendly interface and comprehensive features combined with good security which make downloading other wallets obsolete will win this race.

Presently, the non-custodial mobile crypto wallets with large numbers of users include Coinbase, Trust, Enjin, Coinomi, Bread, Mycelium, Metamask, and Blockchain.com, etc. Some of the newer wallets with user-friendly features for hopefully onboarding a massive number of newbies include Torus, Portis, and ZenGo.

Wallet providers with brand recognition and lots of users can enjoy a steady stream of transaction fees, referral fees from integrated dApp providers, and other one-time or recurring fees from value-added services. These wallets can serve huge addressable and borderless markets. When a wallet provider can successfully serve a 100 million+ users with multiple monetization channels, this provider has a good shot at becoming a major crypto empire.

4. Tool Shack: Own the company that builds the picks, shovels, and tools for a dominant crypto network’s infrastructure

Another approach to building a crypto empire is to think in terms of hardware, supplying either mining equipment or the tools that make cryptocurrency more secure. For instance, Jihan Wu and Micree Zhan co-founded Bitmain in 2013 which has since become the world’s largest manufacturer of computer chips for use in Bitcoin mining, with $2.5 billion in revenue in 2017. The success of Bitmain propelled both Wu and Zhan into billionaire status. In 2018, Hurun Report named Zhan the richest cryptocurrency billionaire in the world and in 2019 Bloomberg ranked Zhan, with a net worth of $5.2 billion, as the world’s 9th richest self-made billionaire aged 40 or younger.

If mining equipment is not your cup of tea, you could build a hardware wallet empire instead. For storing large amounts of cryptocurrency, hardware wallets are the most secure and optimal solution. In 2019, the global hardware wallet market was valued at $164.19 million and is expected to reach $708.37 million by 2025. Presently, the Ledger Nano S is the best selling cryptocurrency hardware wallet with more than 1.3 million units sold as of October 2018, or approximately $120 million in total sales. Ledger saw its sales zoom from 33,000 wallets in 2016 to 1 million in 2017. Ledger’s main competitor is Trezor, which has been in the hardware wallet industry longer and was at one time the front-runner.

As popularity of hardware wallets continues to grow, interesting new form factors and options should emerge, such as a card-type wallet or a wallet worn as jewelry such as a ring, or a subdermal wallet consisting of a microchip embedded under the skin. There are vast opportunities for innovation in both technology and design in this space and these consumer product inventions could be protected by patents.

5. Consolidator: Acquire or merge with weaker or smaller crypto networks to create a dominant chain

Coinbase co-founder Brian Armstrong predicts that there will be a consolidation of chains in terms of developer mindshare, user base, and market cap in the coming decade. He suggested that a M&A between two chains could be accomplished by deprecating one chain and exchanging that chain’s token at a fixed rate to the acquiring token.

This consolidation makes sense as there is a surplus of excess capacity with many mainnets being hardly used if at all. The teams from competing chains could join together and work on important non-overlapping features and scalability to end up with a much stronger, high-performance chain.

As an example, the Chinese Ethereum contenders VeChain, Neo, and Ontology could merge together, eliminate their duplicative efforts, combine their respective strengths, and become the leading Chinese blockchain and smart contract platform. A stronger chain after the consolidation process with competing chains deprecated should produce a significant premium in the price of the acquiring token, especially if the surviving chain is now the dominant player in the industry sector or region.

6. Pioneer: Start a company that vastly improves an existing way of doing business by incorporating cryptography or blockchain/distributed ledger technologies

Not every crypto project requires its own token and actually, in a vast majority of cases, issuing a token was never necessary (except for fundraising) and has only created friction and headaches for the founders involved. Many entrepreneurs are waking up to this reality and they are starting crypto projects without issuing a token.

For instance, the Compound lending and borrowing protocol has captured a majority of the decentralized finance (defi) market. While Compound tokenizes balances in the protocol belonging to its users, it does not have its own native token. Similarly, OpenSea is the most popular marketplace for buying and selling digital collectibles in the form of non-fungible tokens (NFTs) and OpenSea operates without its own token.

Perhaps the greatest opportunity for a pioneer in the crypto space today is to tokenize assets that are traditionally illiquid and provide a platform for them to be bought, sold, and financed easily. Tokenization converts real world assets into digital form on the blockchain, enabling fractional shares of the asset to be transferred easily, quickly, securely, and at minimal cost without the need for intermediaries. An entrepreneur in the tokenization of assets could capture part of the liquidity premium given to these assets after they have been tokenized. For example, the shares of a private company (private equity) are usually sold at a discount of 20% to 30%, and in some cases up to 50%, to the shares of a publicly listed company of similar size and profitability in the same industry. Tokenization of any illiquid asset can provide it with instant liquidity, thus making it more appealing to investors.

Traditional assets that are now ripe for tokenization include private equity, real estate, intellectual property, and museum-quality fine art and collectibles. Some promising projects dealing with tokenization of assets and providing liquidity and financing options for traditionally illiquid assets include Harbor and TinLake. Harbor recently tokenized the shares of four real estate funds worth $100 million, while TinLake is working to define a standardized mortgage token to reduce issuance and origination costs. TinLake also recently facilitated the financing of $60,000 worth of music royalty payments on the Ethereum blockchain in less than 30 minutes at a transaction cost of around $3.

7. Ghandi Greatness: Be a founding or main influential figure in a DAO (decentralized autonomous organization) which is dominant in an industry sector

The founding or influential figurehead wields substantial influence in a DAO’s decision making process. This is due to their pivotal role in establishing the DAO, propagating its vision, or formulating its rules and governance. However, all of the DAO’s members may get to vote on proposals. In this scenario, the wealth accrues to all the members of the DAO depending on their monetary or labor contributions, and perhaps their reputation and seniority, and not just to the founders or a company. Thus, the DAO could have a de facto monopoly over an industry, but the wealth is more equitably distributed among a greater number of individuals and/or entities belonging to the DAO, rather than confined to a few founders or owners.

There are indeed many empire-building themes to explore. An alluring possibility is that with new methods of organizing work, such as through a DAO, secrecy and anonymity can be retained. With the availability of privacy coins, privacy preserving protocols, and multi-party computation, it is possible for even complex tasks and missions to be accomplished in secret by anonymous members of a DAO. Identifying aspects of the work involved and the members who performed the work can be concealed without compromising the quality of results. This may give rise to secret cartels and covert monopolies where the members belong to a market dominating or monopolistic enterprise without even knowing it.

So, what type of crypto empire would you like to build?

About the author

Cathy is the chief investment officer for the Vicuna Fund. She bought her first bitcoins in September 2013 to support a friend’s project for a Stanford startup competition and has been advising, investing, and fundraising for the cryptocurrency and distributed ledger technology space since 2017. Originally from Singapore, she has 15+ years experience building, advising, and investing in tech and non-tech startups, personally creating US$1.2 billion+ in demonstrable value across four continents.