How to Start an Economy

There is a fable that explains how economies got started:

A king cut a metal rod into coins and put his seal on each one. He paid his army using these coins, and required the people to trade goods for these coins. This requirement was enforced by the army.

Following the story, this is how you can start your own economy:

• Cut a metal rod into coins and put your seal on each one
• Offer to trade these coins for something you want
• Offer to trade something you have for these coins

We see this today with blockchain applications, and the technology creators who organize under their umbrella.

With the rise of ICOs, projects are organizing around tokens that can provide value to their network.

Unlike the king in the story, this value is not imposed by force, but by offering a compelling narrative that brings users, and more developers, on board.

At its core, it all comes down to an idea. AWS organized around providing cloud services, through virtualized Linux machines. The idea was not unique to them; pretty much anyone could have spotted it, at the time. Furthermore, companies existed that were in the space they came to dominate — Digital Ocean, for example — and could have provided the same service.

But, as a group, they didn’t, because it seemed low-margin and less interesting than other, simpler, less daunting feature developments. Amazon dogfooded their own product and showed the world: this is an idea that was overdue. Today we can barely even imagine Silicon Valley without AWS, showing the power of ideas, and developers, in combination.

Amazon is a king of the market today, powerful and influential enough to move whole cities to court it when it sought a second location for its headquarters.

In the 21st century, the best way to be a king is to bring people to you, by making something people want: a lesson that benefits not just the king and his people, but consumers everywhere.

Thanks to Julian Martinez for collaborating with me on this article!