“Maybe the most important paper in economics,” I once wrote, “is the one about how people sometimes give themselves painful electric shocks just because that is an option that’s available to them.” They should teach that paper on the first day of Evil Business School. It might give you ideas for business models. One business model is: I give you something of value, and in exchange you give me money. This is probably the most common business model, and the most socially beneficial, but the problem with it from my perspective is that it is a lot of work for me to give you something of value.
Another business model is: I promise to give you something of value, and in exchange you give me money, and then I don’t give you anything of value. I talk about this model a lot around here — loosely speaking it is called “fraud” — but it has some big downsides for me too. For one thing, it’s a fair amount of work for me to trick you into giving me your money. Plus I might go to jail, etc.
A third business model is: I promise you something worthless, and in exchange you give me money. I suppose I talk about this model a lot around here too. It is called “crypto,” ahahahahahahahaha, no, kidding, sort of. I mean. If I can create some tokens that cost me nothing, and that promise you nothing, and then I can sell them to you for real dollars without technically lying to you, that’s a good business for me. What is it for you? Well. It’s an option that is available to you. If you’re sitting around, bored, thinking “you know what I could go for right now is a painful electric shock,” maybe you’ll buy my worthless tokens?
