Domainers and Bitcoiners — Same speculation different decade
In the early days of the internet, people made money speculating on domain names. Now, in the early days of the blockchain, people are making money speculating on the value of BitCoin and other cryptocurrencies. Both focus on the tangible asset created by a new protocol and both miss the real opportunity: building applications and services on top of the protocol. For the domainers 1.0, this was TCP/IP and HTTP and for the domainers 2.0 this is the blockchain.
The blockchain is the database that captures every transaction on the Bitcoin protocol. Right now, almost all of these transactions are simple transfers between two parties who hold Bitcoin as an investment. But, the transition from BitCoin as speculative asset to a world of powerful blockchain applications that offer incredible utility is coming. Quickly.
As more applications are launched on top of the blockchain, I think it will become obvious that the relative economic value of holding BitCoin vs. building applications on the blockchain is similar to squatting on domain names early in the life of the internet vs. building internet applications and services. When the web first emerged, there were people who held domain names as property, speculating that they would increase in value along with increased market adoption of the internet. Some individuals accumulated wealth in this way, but it quickly became a very small piece of the total value created by the emerging internet technology sector. The biggest domainers built “empires worth over $300M” but people who built the applications and services on top of the new protocol created companies worth orders of magnitude more.
As services and applications that provided incredible utility were created on top of the TCP/IP and HTTP protocols, internet use became ubiquitous, and the domainers were pushed to the edges of the internet economy. We’re about to see the same thing with the blockchain.
Some holders of Bitcoin will get very rich. But, the people who focus on the applications and services that are built on the blockchain and offer utility to end-users will generate incredible and lasting value and will be the ones who really change the world.