Podcasting “The Byzantine Premium”

The contradiction at the heart of Bitcoin advocacy.

This week on my podcast, I read my Medium column, “The Byzantine Premium,” which examines the contradiction at the heart of cryptocurrency advocates’ stated desire to have cryptos serve as money.

https://onezero.medium.com/the-byzantine-premium-8411521db843

The article draws on Alex Pickard’s article “Cryptocurrencies: The Power of Memes,” for Research Affiliates, which breaks down the valuation of cryptos into four factors:

https://www.researchaffiliates.com/publications/articles/913-cryptocurrencies-the-power-of-memes

1. Fair value: This is the intrinsic value of a token, based on its utility as a means of exchange and/or a unit of account. Anything that does something money-like has some value, after all.
2. The avant-garde premium: The additional value arising from being lucky or insightful enough to buy a cryptocurrency when its value was not yet obvious and the price was still low.
3. The speculation premium: The price bump driven by people who buy cryptocurrency because they think it will go up in value (if you buy and hold, you are a speculator)
4. The Byzantine premium: The part of the price that comes from confused people…