This is Part 3.
In Part 1, I discuss why rents vs tolls is an increasingly relevant and powerful descriptor of business models (from a revenue generation perspective) and why it matters.
In Part 2, I discuss the conditions that allow for the rise of rents, why technology is becoming the new “landlord”, and why you want to own it anyway as a hedge.
In Part 3, I will discuss the missed opportunity in crypto to break the cycle.
Before I get into discussing crypto (everyone’s favorite topic!), I want to talk about history and kings (and queens).
The beauty of history is that it’s mostly known and factual and it is defined by people downstream in time. This means everything you see and hear is already interpreted in a way that is relevant to modern day people.
For example, when you read about slavery and Nazis, there is only one right interpretation. It’s the interpretation of the modern time (which, of course, is the only judge and jury that matters; And just to be very clear, on these two specific sensitive issues, the modern interpretation is the right interpretation, which is to say neither should have happened.). The facts can all remain the same. But what you understand and get out of history is always the interpretation of the Now.
And for that reason, I’ve always found kings and queens to be such a fascinating subject.
In fact, in the Western (modern) World, the venerable and family-oriented Disney is fond of suggesting, generation after generation, that the greatest achievement for any young girl is to become a princess or a queen.

Source: Fandom
Kings and queens, in a way, are celebrated.
This is interesting because history suggests this is probably not anywhere close to being true…
Beyond a handful of truly benevolent and just rulers, humanity largely spent anywhere between 100-200 generations trying to get rid of their kings and queens.
Living in a castle is glamorous as interpreted by modern people, but the reality is kings and queens lived in castles because, more likely than not, a lot of people wanted to decapitate them…A very unfortunate truth that some arrogant (or naive) kings and queens have had to learn firsthand.
For thousands of years, that was the never-ending cycle.
A king or queen (or their children) would abuse their power to extract rents from people (usually in the form of a tax or some “protection” racket).
The people deal with it at first…until they don’t want to (or can’t) deal with it anymore.
Then off with their heads!
More than a hundred generations of humans went through this never ending cycle.
And what’s interesting is how it always rhymes.
Someone abuses power and collects rents.
And someone new comes along and says, “King Horrible is evil! Out with the old king!” Make me your new…Leader! And I will fight to restore justice!
Of course, then the old king loses his head. The new Leader comes in (and then usually soon after promotes himself to King or Emperor or what have you).
Every generation seems to find agreement that King Horrible is indeed horrible. But what’s amazing is how few people (at least in recorded history) stopped to ask, “Hmmm, is the problem really Mr. Horrible as THE KING? Or is it the office and position and power of the King that is the problem?”
So for over a hundred generations, the conclusion always seems to be, “Gosh we’ve had such bad luck. Somehow we always end up with a new Mr. Horrible. Why can’t we just have a nice king for once??”
BUT humans are amazing in that out of all the species on earth, humans tend to learn new things better than other species. It took a while, but then a bunch of colonists from England finally hit it right: “Oh my God, the problem isn’t that there are so many Mr. Horribles in the world (this is not true, but I will humor the colonists here)…maybe the problem is just that Kings have too much power. And we just need to make sure no one can become king, again!”
Thus, for once, an unbreakable cycle was broken. (Yes, there are a lot of other examples of countries independently arriving at this conclusion, too, including other parts of Europe and Asia, but for simplicity, I’m going to keep this story short).
The lesson from history is that to change the outcome, you need to change the circumstances.
But what’s interesting is that the lesson from History with a capital H (as interpreted in modern times) is that we all want to be kings and queens!
“Yes, kings and queens are evil…unless it’s me! I definitely won’t be evil. I will be amazing and cool. 😎”
The reason why I bring this all up is because in Part 2 I noted how ironic it is that despite how much everyone hates rent-seeking behavior and landlords, we somehow would all wish we were landlords ourselves.
In a way, rent-seeking behavior is on an unbreakable cycle not unlike the cycle of kings and the game of thrones (I’ve always wanted to say that).
It’s the reason why Daenerys in Game of Thrones, the breaker of chains, ends up being a villain when she decides she doesn’t want to break all the chains.

Source: Polygon
In Part 2, I noted how rent-seeking behavior is prevalent in real estate, healthcare, and increasingly in technology.
One of the sectors that towers above all of those, historically, is finance.
Finance (and money) is the gateway to almost everything. And the people and institutions that have controlled it have always derived immense power and the ability to take rents.
The power of Kings and governments, for example, have also always risen and fallen with the power of the purse.
That brings me to crypto.
When crypto (e.g. Bitcoin) was first proposed, it represented an ideal that would wrestle power from the existing “money landlords” and put it back in the hands of the people. In a way, the original propose wasn’t just “let’s get rid of the king”…it was very much “let’s break the cycle”.
For good reason, this vision has made the adoption of Bitcoin a very tall order. The existing system has a lot of power it would like to not lose.
But a funny thing has happened. In the past three years, the traditional financial system has warmed up very quickly to crypto assets! This isn’t so much a financial system that is finding religion and adopting the ideals as proposed by the original vision of Satoshi…it’s very much “wow, there is potentially a new king ascending, and that needs to be me”.
How do I know this?
There’s a lot of ways to skin this cat, but the most straightforward way to see it is to look at concentration of wealth.
What’s broken about the existing system? It’s that too much money is in the hands of too few people!
We, as people, know what happens if someone monopolizes something. This can be local real estate, local business, maybe your local government. The current financial system is working less and less well because too much money is no longer moving at all. It’s been cornered in the hands of a few people.
When someone (or group of people) monopolizes real estate, it means less available (or more expensive) housing for people.
When someone monopolizes money, it means less of the lifeblood that makes modern capitalism work. Capitalism works when money moves. Depriving the system of that, deprives the system of the very thing that is needed to motivate people and get people to improve the world about us and bring about the future we want.
I don’t think this is necessarily a controversial view (usually the controversy is around what to do about it).
How concentrated you ask?
According to the UN, the top 1% of people in the world in terms of wealth control about 40% of the world’s assets. The top 2% control more than half of the world’s assets. That’s pretty concentrated and it’s gotten worse over time.
So there are reasons to hope for a better way to do things (that doesn’t involve killing the current “kings”…hopefully).
And crypto might have been one way to approach it. A new system that is distributed and secure and low cost.
But it turns out it’s not even close to reality at the moment.
In fact, crypto might be worse.
The great thing about crypto is that all the wallet addresses are visible. Turns out 2% of Bitcoin wallets hold 95% of all the Bitcoin out there. Even if you do some adjustments as some crypto-enthusiasts are suggesting, you still get 2% of wallets controlling 72% of all Bitcoin.
The way rents work is always the same. The people that show up first get to hold the people that show up later, hostage.
I’ll leave it as an exercise for you to decide what you want to see, but my question for you is:
Is it all the same?
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