Thread by @IntuitMachine

I am curious, what countries actually have restrictive rules against multi-level marketing business models? It's pervasive and legal in the USA. I ask because this docuseries about Lularue is an eye-opener to its inner workings. amazon.com/LuLaRich-Seaso…

Multi-level marketing has been around for a long time in the USA. Examples of companies that have been around a long time are Tupperware, Avon and Amway.

But it's interesting that almost every human institution is like a multi-level marketing scheme. But unlike an MLM the rules of the hierarchy are tacitly encoded and the rewards are more intangible.

In some way, cryptocurrencies have similar features to MLM. The early adopters are the ones who reap the outsized gains. In fact, one could argue that in almost any human technology, it's the early adopter and true believer who are given the opportunity for the greatest gains.

Of course, every technology to grow requires proof of utility. It's the same with any product that is sold within an MLM scheme. The product should have some kind of value. But like surprisingly, like almost every hierarchy there are two valuation schemes present.

There is a valuation scheme for the product that is consumed and a valuation scheme as to where in the hierarchy you belong. As an example, Apple products have value but it is not the same as Apple corporate shares.

In cryptocurrency vocabulary, there's a utility token and there's a governance token. They are not necessarily the same thing. Proof of work systems don't have a governance token, governance is controlled by the workers (i.e. miners).

People rarely realize that the newly minted billionaires of today's modern society achieved their wealth through the increase in value of governance tokens. It is not (although it is related) to the sale of utility tokens. It's a fundamental decoupling of how wealth is acquired.

This of course has always been true throughout history. It is not the producers who accumulate the greatest wealth, but it is rather the owners of the platform who do. He who administers and controls the interactions between parties is the one that rules.

Throughout human history, interactions between parties have been defined by explicit and tacit rules of behavior. But what is the change when these rules are in code and managed through governance tokens?

NFTs are equivalent to the products that are sold by an MLM. Governance tokens are equivalent to the hierarchical compensation schemes in an MLM. The difference is that it's decentralized for cryptocurrencies.