The value proposition of crypto/blockchain is fairly straight-forward:
Blockchain technology allows users to tokenize digital assets and execute digital transactions in a decentralized manner, removing the need for third parties which take fees and require trust.
Below is a somewhat dated chart comparing the rate of user growth for the internet vs crypto.
We can reasonably assume that this fast growth rate in users means there will be fast growth in value (users = value).
320 million users is a lot. Is it too late to jump in? Probably not. If you were one of the first billion internet users you were still early.
Because cryptocurrencies are networks, and networks become exponentially more valuable as more people join.
Metcalfe’s law states that “the value of a network is proportional to the square of the number of connected users. As the physical cost of the network grows linearly, its value grows exponentially.”
The over-arching thesis for investing in crypto is simply investing in the expected growth of blockchain based networks. Remember this as we move through the course.
Investing in growth.
We want to find investments (networks) that are growing.