$2T and Counting: Some Friday Perspective

It’s easy to become desensitized to the value being generated in crypto. Here are a few real-world analogs.

AccessTimeIconOct 15, 2021 at 5:06 p.m. UTC
Updated May 11, 2023 at 7:00 p.m. UTC
AccessTimeIconOct 15, 2021 at 5:06 p.m. UTCUpdated May 11, 2023 at 7:00 p.m. UTC
AccessTimeIconOct 15, 2021 at 5:06 p.m. UTCUpdated May 11, 2023 at 7:00 p.m. UTC

Nic Carter, prominent industry venture capitalist and shyguy, had an insightful comment yesterday about how it’s easy to lose sight of reality when you’re logged on, heads down focused on building the digital tomorrow. It was in an article about tungsten – the latest obsession among many on Crypto Twitter.

“Focusing on metals is funny because, like, we’re dealing with synthetic stuff all day, right? So, like, why not just recenter on some analog physical goods every now and again. That’s the joke,” he said.

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Of course, crypto isn’t the only online community to realize the importance of stepping back now and again. Before there was touching tungsten, there was touching “grass.” The internet, with its enclaves, pseudo-anonymity and torrent of information has its psychological effects. It’s reshaping our memory, changing the quality of our friendships and, in what’s called the “disinhibition effect,” may be making us meaner.

Getting a little perspective on that is important. This is especially true in crypto, where digital pet rock NFTs (non-fungible tokens) sell for millions of dollars and governments call stablecoins “systemic risks.” It’s surreal, but it’s happening.

Some of this weirdness stems from the sheer amount of capital in the industry – now valued well above $2 trillion. Maybe it’s because we’ve seen it before, or maybe it’s that the human mind is just bad at conceptualizing large numbers, but that number means almost nothing to me. I can’t be the only one that has become so desensitized.

Sometimes it helps to put crypto in context. I’ve tried to find analogies so we can tie back to reality just for a moment.

The current market cap of all crypto assets tracked by CoinGecko sits at $2,520,948,299,351. That would have paid for two decades of war in Afghanistan, according to researchers at Brown University’s Costs of War Project. America’s longest conflict is estimated conservatively to have cost $2.3 trillion.

Bitcoin cash (BCH), the unit of account for the payments-focused fork of the Bitcoin blockchain, is currently trading at or around $600. That’s the price for one pound of the world’s most expensive cheese, Pule donkey cheese, which is produced by a single farm in Serbia’s Zasavica Special Nature Reserve.

Last month, community members that sprung up around the text-based NFT game Loot, developed by Vine co-creator Dom Hofmann, issued 10,000 adventure gold (AGLD) tokens to NFT holders. Those airdropped tokens are now worth $35,900 at today’s price level, which can no longer buy you an entry-level Tesla.

Bitcoin trotted above $60,000 today following news an exchange-traded fund (ETF) could hit markets next week, before dropping back down, then back up. No matter, BTC is still in the ballpark of costs associated with feeding an elephant for a year.

On May 22, 2010, early bitcoin miner Laszlo Hanyecz bought two Papa Johns pizzas for 10,000 BTC. Had Hanyecz held onto those bitcoins instead, today the coins would have been worth $598,311,000. That was the projected cost to build the original Prince George Hotel in New York City in 1917.

Uniswap, the largest decentralized exchange, expended some 1,500 ETH in gas fees (the price paid to run transactions on the Ethereum blockchain) over the past 30 days, according to data site Gas Station. Depending on price fluctuations, that’s somewhere between the $4 million allocated to fund full scholarships for Black and low-income residents who attend the City University of New York and the $6.5 million meant for a retraining program in the current New York City government budget.

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Daniel Kuhn

Daniel Kuhn is a deputy managing editor for Consensus Magazine. He owns minor amounts of BTC and ETH.