Whatever people say, crypto is weird. To a lot of the old guard, like the late Charlie Munger, it is rat poison squared. I totally get that point of view.

BUT….

Almost every time I’ve touched crypto, it has paid me handsomely. Maybe it’s the risk reward equation at work, but make no mistake there are thousands, perhaps tens of thousands of normal people (many of them young) that have made – and more importantly kept – fortunes from crypto.

When you see a CryptoPunk NFT (I must admit I want one) sell for $250,000 – and there are 10,000 of them – it’s likely a young person is buying it with monies they have made dicing with crypto.

Unlike penny stocks and options, crypto is not necessarily a HOV lane to poverty.

I was checking out MetaMask’s new portfolio tool on Sunday (3/10/24) and it happened again. It told me I had $5000 of Optimism tokens (OP-USD). Now, as a crusty old hand at crypto, up went all my red flags. Is it a bug, is it a hack, are these poison tokens primed to rob me? I did my due dil. Nope this really was $5000 of Optimism tokens on the Optimism chain in one of my wallets and now MetaMask’s new tool had alerted me. I checked further, and they appeared to have come from Optimism’s DAO from one of their airdrops about six months previously. Apparently, I had made a donation to some open-source dev project and the DAO felt it necessary to shower me, and many others, with cash. It was an obscure wallet, and the tokens were on the Optimism blockchain version of it. It was little wonder I had no idea I had them.

This was not the first and hopefully will not be the last windfall. Way back, I received the Stellar Lumens (XLM-USD) airdrop as well as others such as Uniswap (UNI-USD); overall, probably a small car’s worth of free money. It’s a weird sensation from the perspective of the fiat world where you expect someone to over bill you on a regular basis rather than toss you a free bunch of cash. That however, is crypto for you. There is, in fact, the other side of the crypto coin from the bust of Emperors like Bankman-Fried. The reverse does indeed have Fortuna on it and with care it has come up that side for me on numerous occasions (props by the way to Zeke Faux for his cover on Number Go Up).

So, this week, Ethereum (ETH-USD) had an update called Dencun. Catchy name huh? However, nothing compared to the name of the new technology! Dencun introduces ‘blobs’ to Ethereum. Yes, we all know crypto needs ‘blobs.’ In reality, it does because Ethereum transaction costs have gone exponential, and blobs allow for recording on the blockchain at a much lower cost for certain applications. The applications are called Layer 2 (L2) blockchains. These do the job of Ethereum on their system before bundling them up in a super-efficient manner and passing them down to Ethereum to be the master record. Optimism is one such Layer 2. In effect, ‘Ethereum’ has handed out a cost break to Optimism to get on with helping Ethereum scale; in other words, enabling people to transact within the Ethereum ecosystem at a cheaper and ultimately faster rate. That should be great news for Optimism. Optimism has a 1% market cap to Ethereum and has outperformed Ethereum in the last few months as you would expect. I own a bit and if you wanted a pop on top of Ethereum for the much-expected continuation of the crypto rally, Optimism is a good punt. However, for me, it’s Ethereum and crypto equities for this time around. It’s tricky to find the next 1000x, 100x or even 10x in a new crypto world where it is either old projects or a crab racing scam of pointless meme coins and where there is a dearth of new token listings with vital ideas and superstar teams.

Here is the chart of Optimism versus Ethereum:

Now a couple of days back I had the opportunity to speak to the CEO of Optimism and make him laugh by thanking him for the six-month-old airdrop I didn’t know I had. This is a fellow who is 101% crypto who speaks in abstracts about the meta issues of blockchain and its potential. I like that; I’ve had enough of speaking to boneheads who think I must need a droney Bitcoin 101 course and who choke on any question approaching: ‘what is your business model?’

Optimism certainly is optimistic. It wants to create a monetary ecosystem where participants get paid for the stuff they do. I think that is what they called being paid for your work in ‘fiat land.’ A proper money flow for crypto and internet denizens has real potential if they can crack the labyrinth.

In any event, if the Dencun Ethereum update unlocks demand for Optimism only good things can happen and as long as the crypto/Bitcoin rally keeps on chugging towards its $100,000+ destination all the numbers are going up.

It all seems mad, of course, but the money is real. Internet money is no less potent than real world money, and when you see so many people living online as much as they do in ‘real life’ it’s not difficult to see where the $2.75 trillion of money has been magicked up from. That is after all, only one Apple (AAPL) market cap. The online existence is only going to get more absorbent and, with internet money – private sector or public sector, – can only grow, and alongside it the providers of that virtual life and its infrastructure.