The Value Layer

The phrase the value layer of the internet is peppered throughout my work.

When I say, the value layer of the internet, what I’m speaking to is the immensely complex series of systems that support value exchange across the internet. I’ve come to think about this as being comprised of access, value types, transfer types, and a number of other associated complexities I’m going to ignore today because this will be 90 pages if I don’t.

If we can agree access is always via the internet and defined by specific providers or protocols we can start to think about the ValueType and TransferType more critically. I nest them like this for my own thinking and I’m going to focus on these 2 things in this entry.

In a USD Context

Here is how I think about value broken out with consideration to how it’s stored and transferred between entities. This is not a comprehensive list and is meant for illustrative purposes only.

You can access a USD ValueType through systems in the US like Dwolla (programmable payment infrastructure), Cash App (consumer app for exchanging value), or Stripe and Adyen (acceptance and quickly becoming much more). If you flipped the ValueType to BTC you’d have another series of access providers on the top and a more finite series of TransferTypes. If you swap it to GBP a similar set of changes will occur. Same when swapped with STX, PAX, or HNT and on and on.

In a global context

You can pull the ValueType and TransferType vernacular out infinitely across all currencies. I intentionally reference currency as a ValueType because I don’t think all forms of value are currencies. If I was drawing this on a whiteboard and included GBP and MXN the parallel would look something like this:

Again, this is not an exhaustive list and should be thought of as illustrative in the context of currencies as a ValueType. That ValueType could also be the designation used to represent a fractional share of a NFT created by Grimes, or a share of an Apple I.

There’s another blog to be written about enabling connectivity between access points in the future and between ValueType. I’m convinced there is an explosion in innovation wrapped up in the interoperability of access points that Metcalfe’s law has made easy to understand but hasn’t manifested itself at global FinTech scale.

The ValueTypes and TransferTypes used broadly across the internet are interconnected but how varies. Some things are implied in that interconnectedness. Exchanges are implied because ValueTypes have to be converted between one another. Geographies are implied because people live in places where they eat, sleep, and have laws. Even when commerce is machine driven, machines are owned by entities(people/companies/or protocols which benefit people/companies) and entities reside or are registered in geographies governed by laws. I tend to find in my own analysis that the access provider dictates the geographic restrictions or requirements as opposed to the ValueType. This is why I lead with ValueType and not the geography in my thinking.

When you start to imagine this at a global scale you end up with an exceptionally large list of currencies. Likely more than any one human will knowingly interact within their lifetime. Including both fiat and cryptocurrency there are 3,000+ currencies to consider today including thousands of legal jurisdictions and maybe more. As Bowie said, it ain’t easy. It gets exponentially more complex when a ValueType could be a NFT or fractional share, or both.

Let’s consider that a computer produced in 2050 could actually interact with a wide range of ValueTypes on a daily basis programmatically because it’s now embedded into the software on your machine. This isn’t unthinkable and one of the reasons I think cracking the map of the value layer is so interesting. It gives us the freedom to assume someday there is a RAM version of money in every application. Call it RAV (random access value) based on the state of an application taking into account the monetary value of the output of whatever is being produced, mined, purchased, actioned, or whatever. The first logical place for that to manifest itself at a internet scale is the browser. It’s one of many reasons I’ve found Metamask so interesting. I’m getting off track pontificating about access points and not a ValueType or TransferType so I’ll get back on track…

Thinking about the opportunity

You could easily invest $100M trying to figure this out like many others have. When we consider the most recent innovations in real time it’s still hard to wrap your head around. FIS did an admirable job of representing just the fiat based real-time solutions in their flavors of fast report.

One of the views I historically struggle with is a geo first view where the top of the list is a location as opposed to a ValueType (USD, BTC, ETH, RMB, etc, etc). Geographies are a people thing rather than an Internet thing. The Internet is ruled by protocols and the geographies of the world are ruled by laws. One can’t exist without the other but the perspective of ValueType first freed my mind quite a bit.

It’s important for me to note that these are my thoughts and my ramblings. They don’t represent anyone else’s and aren’t representative of anything other than I’ve had a nice cup of coffee and had this on my list of things to write about for a long time. I’m hopeful there is time to write more about access and exchanges soon.