Investment company Multicoin wagers that ‘Internet Labor Markets’ will propel the next phase of cryptocurrency adoption.

The firm states that the upcoming influx of users into cryptocurrency will result from platforms where individuals earn crypto by providing labor rather than purchasing tokens directly.

Key points:

• The primary application of crypto has historically revolved around the buying and trading of tokens, yet some investors suggest that the next phase of adoption may arise from earning them instead.
• Multicoin Capital refers to this developing framework as Internet Labor Markets, where individuals earn crypto by completing tasks such as data labeling, providing bandwidth, or engaging in other online activities.
• Advocates claim that this model has the potential to shift crypto from a speculative trading environment to a worldwide marketplace for digital labor.

Throughout much of crypto’s past, the main use case was straightforward: purchasing tokens and trading them.

Currently, a faction of investors and developers speculate that the sector may transition to a new paradigm: earning crypto as opposed to purchasing it.

A variant of this notion is what the venture firm Multicoin Capital designates as Internet Labor Markets (ILM) — platforms where users obtain tokens by providing work, resources, or knowledge.

“The method by which individuals acquire their initial crypto in the future will not be through purchasing,” Sengupta remarked in a discussion with CoinDesk. “It will be through earning it.”

This idea has begun to attract interest, especially in ecosystems like Solana, where an increasing number of projects are trialing networks that compensate users for executing verifiable tasks.

This transition — from speculation to earning — lies at the core of Internet Labor Markets, where users provide work, resources, or expertise to decentralized networks and are rewarded with tokens. Should this model gain traction, Sengupta envisions crypto evolving into a more global labor marketplace.

For the majority of crypto’s history, participation involved converting conventional currency into digital assets such as bitcoin, ether, or solana prior to engaging with the ecosystem. ILMs alter this dynamic: instead of initially purchasing tokens, users fulfill tasks and receive crypto as remuneration.

“The concept is straightforward,” Sengupta stated. “There are two ways individuals enter crypto — they either purchase or earn.”

Over the last ten years, most participants have taken the first path. However, Sengupta is confident that the next wave will stem from the latter.

“If you have a framework that allows for the issuance and movement of new assets at extremely low costs,” he continued, “you can coordinate labor on a global scale.”

In practice, that labor can manifest in various forms — providing bandwidth, labeling data, minimizing energy usage, or completing physical tasks connected to decentralized infrastructure.

“An individual establishes a company to meet a market need, and 50,000 individuals globally can be compensated for delivering that labor,” Sengupta noted.

This concept builds upon previous crypto experiments, such as decentralized physical infrastructure networks (DePIN) — a category of initiatives that have largely emerged from the Solana ecosystem — which incentivize contributors for providing resources, like wireless coverage or mapping data.

Nevertheless, Sengupta believes the forthcoming phase extends beyond hardware.

“The system evolves from merely integrating hardware to individuals engaging in more active labor — offering judgment, effort, and time,” he explained.

Rather than passive contributions, many ILM frameworks emphasize specific tasks that can be verified and compensated immediately. A network may reward users for labeling data, reporting local information, identifying bugs in software, or completing real-world tasks.

The blockchain advantage

Blockchain technology enables these systems as it allows for the verification and automatic settlement of work.

In conventional employment structures, payments often necessitate invoices, approvals, and delays. ILMs streamline this process with deterministic verification — confirming that work has been completed and compensating contributors immediately via crypto mechanisms.

A significant portion of that work may ultimately converge with artificial intelligence.

One example Sengupta highlights is Grass, a platform that enables users to share unused internet bandwidth through software on their devices. This bandwidth can subsequently be utilized for data-scraping tasks to assist in training AI models.

Multicoin Capital is a cryptocurrency investment firm that oversees a multi-billion-dollar token hedge fund. In January 2022, the firm announced it raised $422 million for a venture fund supporting early-stage blockchain startups.

“Individuals globally download the software, share excess bandwidth, and earn tokens for their participation in the network,” he stated.

However, the model could further develop.

“The next stage involves not only scraping data but also humans applying discretion — labeling data, assessing quality — in ways that only humans can achieve,” he noted.

In essence, the future of internet labor markets may see humans working alongside AI systems rather than competing against them.

Sengupta contends that AI could actually heighten the demand for distributed human contributors. As businesses become more compact and automated, they still rely on individuals for tasks that necessitate judgment, verification, or real-world execution.

AI may reduce core teams, he stated, but it simultaneously amplifies the necessity for on-demand contributors — generating demand for systems capable of sourcing, verifying, and compensating those contributions on a global scale.

If this vision comes to fruition, crypto’s next users may emerge not through speculation but through labor.

Read more: Multicoin Capital co-founder Kyle Samani steps down after nearly a decade to pursue other areas of tech