Social Agreement Drives Crypto

Shaan Puri explains how his perspective on cryptocurrency and NFTs evolved from skepticism to understanding through the lens of social agreement theory. He draws parallels between traditional value systems and digital assets, emphasizing how collective belief creates and maintains value.

• Initial Skepticism of Crypto (2013-2015):

  • Dismissed Bitcoin as having no intrinsic value
  • Viewed it as a potential Ponzi scheme
  • Didn't understand the fundamental value proposition

• Evolution of Understanding:

  • Realized all forms of value (gold, paper money, diamonds) are based on social agreements
  • Value comes from collective belief and acceptance
  • Scarcity plays a role but isn't the primary driver

• Bitcoin Adoption Insights:

  • Potentially fastest-adopted technology ever
  • Faster adoption rate than mobile phones and internet
  • Strong holder mentality: 86% held through 80% crash
  • Belief system comparable to "religious zealots"

• NFT Perspective:

  • Initially dismissed NFTs after CryptoKitties crash in 2017
  • Now sees value in original collections like CryptoPunks
  • Compares early NFTs to traditional art value:
    • Mona Lisa valuable due to social agreement
    • CryptoPunks valuable as "the OG" NFT project

• Current Investment Approach:

  • Treats NFTs like lottery tickets
  • Most investments might fail
  • Some can increase 5x in value quickly
  • Focus on community strength and holder mentality

• Key Value Indicator:

  • Strong holder mentality indicates long-term value
  • Community conviction creates scarcity
  • Social agreement strengthens over time with more believers