Ten years ago, everything envisioned by cryptocurrency enthusiasts is slowly becoming "boring" enough to be practical, and all of this is happening at a critical moment.

Author: Christian Catalini

Translated by: Deep Tide TechFlow

Image: Alex Blania and Sam Altman at the "World Unwrapped" event in San Francisco on December 11, 2025

Christian Catalini

If you have been following the cryptocurrency space, you may have noticed that everything seems to be accelerating recently. Typically, this means "the numbers are going up," but this time the driving force is not a bull market or a breakthrough in some crypto technology, but rather that the rules are finally starting to be clearly defined.

With the gradual implementation of stablecoin regulations, the "handbrake" on the industry has finally been released. Projects are accelerating their shift from "serving the crypto insiders" to truly mainstream market products. After all, when you no longer worry about breaking the law at every turn, you can focus more boldly on building real business models.

It turns out that when the foundational components are in place—when stablecoins are no longer an existential threat but a regulated business—the definition of "ambition" changes as well.

You are no longer trying to reinvent the concept of money; instead, you start focusing on creating genuinely useful products. The "last mile" barriers that previously limited blockchain development are gradually disappearing, primarily because decentralized networks are finally starting to do those obvious, even somewhat boring things: acknowledging that one of the most useful functions of blockchain at this stage is to connect it with Visa cards.

Anonymity Vulnerability

Payments have always been the foundational layer that cryptocurrency must first break through. Payments are the fundamental primitive function of everything else. Satoshi Nakamoto has provided almost all the necessary elements for an electronic cash system: a digital asset, a global ledger, and an incentive mechanism to support its operation. However, for payments to scale securely, authentication is essential. This is because modern currency is not just a measure of value; it is also a carrier of intent that needs to be verified.

Bitcoin cleverly solves the double-spending problem, ensuring that digital cash cannot be copied and pasted, but it does not address the issue of identity verification. While some view anonymity as a feature, it is actually a significant vulnerability for global adoption. I realized this deeply during the design of Libra. The first compromise we had to make was to abandon non-custodial wallets: although we designed many clever ways to ensure their security, regulators demanded from day one that we establish a secure and controlled boundary. Society strongly leans towards ensuring that the financial system does not support illegal financial activities, and if your permissionless protocol inadvertently funds terrorism, society will ultimately revoke your license.

Stablecoin Sandwich Phenomenon

The current state of cryptocurrency is a textbook case of "infrastructure inversion." In theory, we will eventually have advanced zero-knowledge proofs and on-chain attestations that perfectly balance privacy and compliance. However, the reality is that we are currently just patching new technologies onto old ones in the most unexciting ways.

Take the "stablecoin sandwich" as an example. This is an industry term that refers to connecting two otherwise independent real-time domestic payment systems by converting fiat currency into stablecoins, transmitting them over a blockchain network, and then converting the stablecoins back into fiat currency on the other end. This method is indeed feasible, but its scaling approach is ironically lacking. It does not rely on the openness of the crypto network. Businesses do not connect directly to the permissionless network because that would require extra work. Instead, they typically hire a coordinating service provider to conduct compliance checks and interact with the blockchain on their behalf.

This status quo is far from the vision of controlling one's own destiny; instead, it brings intermediaries back to the forefront. It turns out that while blockchain does solve the settlement problem—i.e., the transfer of value—it neglects to solve the information problem. In traditional financial systems, every payment comes with relevant data: who initiated the payment, what the payment is for, and whether the payer is on a sanctions list. If this information cannot be conveyed, then even if the payment settlement can be completed in seconds, it is meaningless because the receiving bank will still refuse the transaction due to legal requirements.

Human Currency?

So, what will the future look like? The "Yesterday's World" event held in San Francisco yesterday provided a potential answer, and it surprisingly relates to a chrome sphere. At the event, Alex Blania and Sam Altman reminisced about a time when the prospect of artificial intelligence consuming the internet was not so apparent. However, one clear takeaway for them was that the ability to distinguish a human from a robot will ultimately become the most valuable resource in the world. This pursuit of "Proof of Personhood" prompted Blania to build a customized hardware network to verify whether users are indeed biological entities.

After six years of development, what once seemed like a clumsy futuristic experiment—"scanning everyone's iris"—is now gradually shedding its gimmicky label and beginning to show its practicality. Sam Altman quoted Paul Buchheit to succinctly summarize this key point: "The future may require two currencies: machine currency and human currency." It turns out that "Proof of Personhood" is indeed a compliance function for the age of artificial intelligence. To scale payments, you need this technology to distinguish between benevolent actors and malicious ones; and in a world filled with infinite synthetic content, you need it to prove the only scarce thing: that certain things are indeed created by humans.

For years, the dream of cryptocurrency has been to build a global version of Venmo based on cryptographic technology. And at yesterday's "World" event, they showcased a wallet that fundamentally achieves this goal. Although the infrastructure it relies on is quite similar to traditional fintech architecture, by integrating virtual bank accounts from 18 countries, a Visa card, and local payment networks, they successfully bridged the gap between cryptocurrency and reality. It turns out that the real demand from users for global fund movement is not a new token, but a simple solution that allows them to deposit their salaries and swipe a Visa card. The way to attract users to adopt this service is through the classic tech growth model: World charges no fees for most services.

Part of the reason is that banks need to charge fees to obtain rent, while World does not. But more importantly, the core of this model is that the flow of funds should be low-cost. For banks, a wire transfer may require the "diplomatic mission" of going through three intermediary banks and a fax machine; for blockchain, it is merely updating a ledger record. World is betting that the actual cost of fund movement will approach zero.

App Store Arbitrage

Innovation is not limited to the payment sector; it continues to expand. As early as 2024, I predicted that "Mini Apps" could become the "killer app" in the crypto space. The prophecy at that time was that they might appear "clumsy, niche, and even toy-like" upon their initial debut. This may sound trivial, even somewhat annoying, but its impact on market structure is profound. The significance of mini apps is not just embedding a calculator into your X (the new name for Twitter) feed, but allowing developers to distribute software without needing permission from app stores or paying up to 30% in commissions. It turns out that escaping the "walled garden" is just another way of saying developers want to preserve their income. The most valuable feature a new ecosystem can provide to developers is to free them from the "landlord's" cut when handling payments.

The combination of mini apps and strong identity verification offers developers a whole new set of foundational capabilities while also signaling World’s strategic transformation. In the past, World’s strategy was more rigid—"scan your iris or leave," which was clearly too dogmatic. Now, World has adopted a tiered service approach, treating verified "human identity" as a premium feature. This market mechanism seems more reasonable. Users may hesitate to scan their biometric information for an abstract future reward, but if they can receive higher yields or more interesting experiences as a result, they are likely to willingly participate. For example, the team demonstrated how Japanese Tinder users utilize World ID for identity verification. It turns out that the "killer app" for sovereign identity may just be proving to a date that you are not a robot. If you doubt whether users will give up their biometric information for convenience, just ask those willing to scan their eyes to skip the security line at San Francisco International Airport (SFO).

Beyond the Record

Blania clearly understands the paradox of platforms: you want top online marketplaces, social networks, chatbots, and financial services to adopt World ID as a foundational feature, but they won’t easily adopt it until you have enough users. And without a product, you cannot attract users. Therefore, you must build the product yourself to attract users.

This also explains World’s layout in the payment sector and its expansion into messaging. World is collaborating with Shane Mac's team to directly integrate the decentralized messaging protocol XMTP into the application. Compared to centralized alternatives like Signal, WhatsApp, or Telegram, this approach offers significant privacy advantages. It turns out that if you want to become the invisible identity layer of the internet, you may first need to demonstrate your capabilities by building better messaging products.

Before the event started, Shane Mac showed me his latest experimental project—Convos. This application is also based on XMTP, indicating that the interoperability of cryptographic technology is not limited to financial services but can extend to communication tools that people use daily. Convos utilizes cryptographic techniques to provide a user experience that requires no registration, phone numbers, history, or tracking. Of course, all of this is completely independent of centralized servers.

The selling point here is that this may be the first truly "zero-trace" messaging application. In a world where every Slack message and email is permanently saved, conversations that genuinely disappear are becoming the ultimate luxury. I think the earliest users may be investigative journalists, but the broader vision is to reset private conversations as the default mode of human interaction rather than a suspicious exception.

Overall, although these experiments are still in their early stages, the trajectory of development is already clear. The infrastructure of cryptographic technology is finally catching up with the original declarations. Everything envisioned by cryptocurrency enthusiasts ten years ago is slowly becoming "boring" enough to be practical, and all of this is happening at a critical moment. With the accelerated development of artificial intelligence, the ability to verify truth using cryptography is no longer just a philosophical hobby for cypherpunks but an indispensable infrastructure for the entire digital economy.

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