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Token valuation relies on magic–belief, actually. That is, tokens are valuable if people believe they are valuable–that is, if they have trust in their value. Furthermore, there is a sort of information cascade logic that can create market value: if people see that a token sells at a positive price–especially if it sells at a very large positive price–and they observe that supposedly smart people hold it, they conclude it must have some intrinsic value. So they pile in, increasing the value, validating beliefs, and extending the information cascade.
*On the basis that among the many things we couldn’t believe about the FTX debacle, we thought it couldn’t be a real name, we tried myriad versions of anagrams of Sam(uel) Bankman Fried and concluded that while Slam me a...
So Facebook have rebranded as Meta and the buzz is growing about the MetaVerse. Despite all the memes and the criticism of FB/Meta, the key takeway is that this whole Internet 3.0 and the world of Crypto is simply now ‘too big to fail”.
A digital coin that doesn’t change in value (up or down) is the missing component that has so far prevented the online world of internet 3.0 transitioning from an entertainment space to a genuine alternative Economy.