How Blockchain Technology Can Help Measure Value

Jeremy Epstein Business Leave a Comment

TL;DR–the tokenization of assets may allow us to measure the creation, transfer, and destruction at previously unimaginable levels, which could unleash entire new ways to create value.

Leaving aside the craziness of the cryptomarkets over the past few weeks or so, let’s explore one element of what this whole “blockchain revolution” is all about.

I was on a call the other day when someone was explaining blockchain. It was a technical conversation about distributed ledger, cryptography, etc.

That is important, of course, but the more important part- at least as far as I am concerned- is what it enables:

the cost-effective tokenization of assets down to the near atomic level.

Once we have that, we have the ability to assign ownership (you have the private key and it’s yours) and we have the potential for a market with liquidity (you can trade it or sell it to someone else with low/zero friction).

But one of the eternal questions of markets is about how participants value a certain asset.

You may have a strong sentimental attachment to your wedding ring, but I’m certainly not going to pay you 100 BTC for it, even if that is amount of money you would need to part with it.

So, we place different amounts of value on it.

But value is not a two-sided (crypto) coin, it’s more like a multi-sided object.

This is where Philip Sugai, one of the world’s leading experts on value, has helped shape my thinking.

He explains that, in any transaction, you want to maximize across a few vectors:

  • value for your customers
  • value for your partners (and employees)
  • value for society
  • value for the planet today
  • value for the planet tomorrow
  • …and probably more

In any transaction, all of these value elements are at play, even if we are not conscious (or care) about them.

So, here’s the thought exercise for today…and I certainly do not have the answer.

Given the fact that we can tokenize assets down to the atomic level (or let’s say 18 decimal points of precision)…

is there a way to look more precisely at an asset with the use of blockchain technology so we can more accurately assess how each one could, should, or does not maximize value cross all of these vectors?

In other words, say there are two bags of coffee on the shelf for sale.

Each bag of coffee is represented by a digital token.

Is it possible that one day we might be able to look at the blockchain-based components involved in the creation of that asset (fuel costs, fertilizer, human labor, seeds, energy, etc.) and then see that one actually has more value because it does less damage to the planet, pays people more, while delivering the same taste as the one next to it?

If that’s the case, the first coffee can be proven to have more value and is thus worth more, all backed by the blockchain.

Philip extends this even further:

“In addition to this, over the entire lifecycle of a product or service that they are attached to, you could create a living dashboard here, where you can check in at any time and see the ebb and flow of value. 

If we’re at the atomic level, then you can see components morph into products, get sold, consumed (used) and then reclaimed, recycled and reworked into the next generation of their lifecycle (I’m a big fan of Cradle to Cradle thinking). 

So part one is (1) how can we best apply blockchain technology to help us “see” value as it is created and destroyed across all the value actors, and then (2) track this over time to watch this creation/destruction over time. “

[If you want more of Philip, you should check out this book The Value Plan.]

People call blockchain the “Internet of Value.” If that’s the case, are we about to have an entirely new, more objective way possibly, of assigning value to objects?

I know this one is way out there, but it is one that Philip has got me thinking about and so I am exploring it.