Thanks for all the feedback and support. I felt I owed reddit some actual detail on crypto's place in the history of capitalism. It's long, so I emboldened the major points. All feedback and perspectives are welcomed.
1. Land markets in early America were speculative, under-regulated, prone to booms and busts, but nonetheless became the basis of the economy.
- Cryptocurrency shares a similar early history
2. As the economy industrialized, urban land replaced rural land value
3. The 21st Century economy will be digital, but the structure is fundamentally similar to the early 19th Century: call it Crypto-Capitalism.
- The Role of Land in Early American Capitalism
Observing the rush of Europeans across the North American continent, Thomas Jefferson wrote in 1776 that “[Americans] will settle the lands in spite of everybody.” No government, American or British, seemed able to quell colonizers’ thirst for land. In 1676, “Bacon’s Rebellion”, an incident where hundreds of people demanded access to Indegenous lands protected by the Crown and it’s treaties, successfully besieged the capital Jamestown. The incident highlighted the power of colonizers’ land interests even above the power of the royal governor. Many historians argue that the American Revolution itself was largely provoked by the British attempt to stop colonists’ land expansion (into indegenous territory). Not dissimilar to crypto, land fever in eighteenth century North America threatened to undermine the authority of the state - and the imperial winner of the continent would be the state who could harness the land rush to solidify its own power. (see Alan Taylor, “American Revolutions”)
The question to compare it to the nascent crypto revolution, is why was land so crucial?
The Agrarian Economy:
It’s pretty fair to claim that land was the basis of the agrarian economy in eighteenth century North America. This does not mean it was the most important, or even the largest asset (by the mid-nineteenth century, the dollar value of enslaved people and cotton outpaced the value of land; Thomas Piketty argues that “human capital” [i.e. enslaved and the income they generated] was worth more than all other forms of capital combined). That said, land was the foundational asset, upon which all other forms of agrarian-related capital took shape. Enslaved people operated the land, cotton grew from the soil resources, timber grew as a natural resource, infrastructure was built upon it or through it. Land shaped society in ways that gave it more social and political power than all other forms of capital - it had potential energy, so to speak. A title to land could decide the fate of what happened in the broader economy.
[Statistic: Land + Housing = 275% National Income in 1810; Slaves = 250% National Income in 1810; Other forms of capital = Negligible] - source “Capital” by Thomas Piketty
The majority of technological innovations and infrastructure projects in this economy were built upon or around land. Every aspect of the economy, from railroads, to steamships, to industrial manufacturing, to raw materials, to housing, was built upon the asset.
This was not a linear history, of course. Much like crypto in its early stages, there were major speculative bubbles, devastating crashes, under-regulated exchanges, theft and fraud. During the land rush to the Cotton Belt in the early 1800s, many (primarily young men) YOLO’d their life savings and inheritances. Some got rich, many lost their shirts, all as the government scrambled to regulate the wild flow of money into and out of the Deep South.
But the chaos of the asset’s value did not undermine its importance.
2. Land Value Shifts from Rural To Urban:
This shift brings us to the role of land we are familiar with: the urban 20th century. Land gets its value not from its sheer size, or even soil content, but from its place in the urban landscape.
(Location, Location, Location).
A quarter acre in Manhattan, for example, is worth more than 100 acres in North Dakota, because of the potential projects and infrastructure that can be built upon it and in proximity to other developments.
In this way, it’s necessary to see the value of an asset in more than absolute terms. For crypto to become the basis of the future economy doesn’t imply that bitcoin will inherently be worth $1million. Nor does it mean that everyone, everywhere will use it. It will very much depend on the specific project (i.e. the location, and what can be built upon it).
Manhattan land : North Dakota land :: Ethereum/Polkadot/Cardano: (insert shitcoin here).
As the projects built on a particular protocol attract attention, more projects will be built there; while other protocols will remain sparse.
3. Crypto-Capitalism: Nothing New
The reason this “historian” is claiming to predict the future is because (I argue) nothing is really changing. If capitalism once built itself on the privatization of land, the same is happening in the digital realm. Crypto is where power is consolidating itself, and powerful players are building the infrastructure upon which the rest of us will depend. To put it simply, capitalists have found a more efficient way to extract and exchange wealth, and are increasingly adopting it into their industries.
Infrastructure, in the form of applications, web3.0, energy grids, banking, and real-world assets, will be built on top of the block chain. Comparable to 19th century land, the economy we rely on will exist on top of the software protocols we call crypto.
Crypto can be super speculative, prone to booms and busts, filled with irrational euphoria at times. I’m sure it seemed wild for 18th century fur traders on grasslands around Lake Michigan to think a global metropolis like Chicago would exist there. But if they had followed the behavior of Big Money, and the flow of capital across the globe, it may have actually seemed obvious.
(If you want to get wild with the metaphor, think how railroad locations and Robber Baron investments determined the development of certain cities over others re: St. Louis vs. Chicago).
Already, real world assets are being brought into the crypto world through Oracles. Art, of course, is being represented in NFTs on the Ethereum protocol. Cash, through bitcoin, is being increasingly adopted as a means of exchange. But this is just the tip of the iceberg. Blockchain technology makes so much more possible, transforming the internet itself (web3.0). What are the implications? Anyone who wants to build a business will have to interact with the crypto space in some fashion. New infrastructure, like energy grids and payment networks, will be built on existing blockchain technology and protocols.
IMO these big claims aren’t far fetched because crypto is just a more efficient form of the same old Western capitalism we’ve all learned to worship.
[I gotta keep this damn kitty off the keyboard smh]