The Coming Epic Battle Between Crypto & FAMGA

Lou Kerner
Quantum Economics

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Crypto is a new computing paradigm, poised to create more disruption and wealth creation in the next 20 years, than the internet has in the last 20. The question I face as a VC is who is going to capture that massive wealth creation? The wealth creation can either go largely to the five incumbents who have captured the majority of tech wealth creation over the last five years, or to the new entrants, aka the crypto natives. In this post I’m going to 1) define what I mean by crypto, 2) highlight the strengths and weaknesses of the two warring factions, and 3) state the factors that will decide the coming epic battle for capturing the future wealth generation of crypto.

Defining Crypto?

There are four emerging technologies:

  1. Blockchain — aka Truth
  2. CryptoCurrency — aka frequent flier miles
  3. Smart Contracts — aka as if-this-then-that statements
  4. Zero Knowledge Proof — aka the ability to prove things without showing anything, aka Magic

Those four technologies, in combination, are ushering in a new paradigm in computing, that enables an (almost) infinite variety of new business processes. That’s what all new computing paradigms enable. The most exciting new business process enabled is:

5. Decentralization-aka taking the man out of the middle

And the success (or failure) of these new business processes are increasingly driven by:

6. Community-aka a group of people who help a crypto project succeed incentivized by “value” they derive from that success

The Majority of Wealth Creation Accrues To FAMGA

I first wrote about FAMGA and the destructive impact of the growing oligopoly in January2017. Fewer than 200 people read the story in the first month. But I thought it was important, so I wrote another piece on FAMGA in April 2017. More than 10,000 people read the story in its first month. My biggest Medium success up till that time. My simple premise was that every business was increasingly a data business, and the more relevant data you had, the stronger a…

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Lou Kerner
Quantum Economics

Believe Crypto is the biggest thing to happen in the history of mankind. Focused on community (founded the CryptoOracle Collective & CryptoMondays)