A cryptocurrency practitioner who once held libertarian ideals has fallen into disillusionment after reflecting on his career of building a "financial casino." His experience has sparked profound reflections on the divergence between the original intentions and the reality of the crypto space.
Written by: Nic Carter, Partner at Castle Island Ventures
Translated by: AididiaoJP, Foresight News
Ken Chang recently published an article titled “I Wasted Eight Years of My Life in Cryptocurrency,” in which he laments the inherent capital destruction and financial nihilism of this industry.
People in the crypto circle often love to mock such "angry exit" articles and relish in recounting the stories of historical figures like Mike Hearn or Jeff Garzik who made high-profile exits, while not forgetting to point out how much Bitcoin rose after they left.
But Ken's article is largely correct. He states:
Cryptocurrency claims to help decentralize the financial system, a belief I once held dearly, but the reality is that it is merely a super system of speculation and gambling, essentially a replica of the current economy. Reality hit me like a truck; I was not building a new financial system, I built a casino. A casino that does not call itself a casino, yet it is the largest, always-on, multiplayer online casino constructed by our generation.
Ken points out that venture capitalists have burned billions of dollars funding various new public chains, which we clearly do not need so many of. This is true, although his description of the incentive model is slightly off (venture capitalists are essentially conduits of capital—overall, they will only do what limited partners are willing to tolerate). Ken also criticizes the proliferation of perpetual and spot DEXs, prediction markets, and meme coin launch platforms. Indeed, while you can defend these concepts from an abstract level (except for meme coin launch platforms, which are utterly nonsensical), it is undeniable that their proliferation is merely due to market incentives and the willingness of venture capitalists to foot the bill.
Ken says he initially entered the crypto space with idealistic aspirations and a glimmer in his eye. This is familiar to participants in this field: he had libertarian tendencies. But in the end, he did not practice libertarian ideals; instead, he built a casino. Specifically, he is best known for his work at Ribbon Finance, a protocol that allows users to deposit assets into a treasury and earn returns through systematic selling of options.
I don’t want to be too harsh, but it is indeed the case. If it were me, I would also reflect deeply. When the conflict between principles and work becomes unbearable, Ken arrives at his pessimistic conclusion: cryptocurrency is a casino, not a revolution.
One point that resonates with me is that it reminds me of the article Mike Hearn wrote nearly a decade ago. Hearn wrote:
Why did Bitcoin fail? Because the community behind it failed. It was supposed to become a new type of decentralized currency, without "systemically important institutions," without "too big to fail," but it turned into something worse: a system completely controlled by a few. Worse still, the network is on the brink of technical collapse. The mechanisms that were supposed to prevent all this have failed, so there is little reason to believe that Bitcoin can truly be better than the existing financial system.
Though the details differ, the arguments are consistent. Bitcoin/cryptocurrency was supposed to be something (decentralized, a practice of cypherpunk), but it has turned into something else (a casino, centralized). Both agree: it ultimately is not better than the existing financial system.
Hearn and Ken's arguments can be summarized in one sentence: cryptocurrency initially had good intentions but ultimately went astray. Thus, we must ask: what is the purpose of cryptocurrency?
Five Goals of Cryptocurrency
In my view, there are roughly five camps, which are not mutually exclusive. Personally, I resonate most with the first and fifth camps, but I empathize with all camps. However, I am not rigidly attached to any one side, even the hardcore Bitcoin camp.
Restoring Sound Money
This is the original dream shared by most (but not all) early Bitcoin players. The idea is that, given time, Bitcoin will pose a competitive threat to the monetary privileges of many sovereign nations and may even replace fiat currency, bringing us back to a new gold standard order. This camp generally believes that everything else in the cryptocurrency space is a distraction and a scam, merely riding on Bitcoin's coattails. It is undeniable that Bitcoin has made limited progress at the level of national sovereignty, but in just 15 years, it has come far enough as an important monetary asset. Those who hold this view have long been caught in a contradiction of disillusionment and hope, harboring nearly delusional expectations that Bitcoin's widespread adoption is just around the corner.
Encoding Business Logic with Smart Contracts
This view is advocated by Vitalik Buterin and most Ethereum camp members: since we can digitize currency, we can express various transactions and contracts in code, making the world more efficient and fair. For Bitcoin purists, this was once heresy. But it has indeed achieved success in certain narrow areas, especially in contracts that are easily expressed mathematically, such as derivatives.
Making Digital Property Real
This is my summary of the "Web3" or "read-write-own" philosophy. The idea is not without merit; digital property should be as real and reliable as physical property. However, its practice in NFTs and Web3 social has either completely gone astray or, to put it politely, is out of sync with the times. Despite billions of dollars being invested, few defend this philosophy today. But I still believe there are worthwhile considerations within it. I think many of our current internet dilemmas stem from the fact that we do not truly "own" our online identities and spaces, nor can we effectively control our interactions and content distribution. I believe that one day we will regain sovereignty over our digital property, and blockchain may play a role in that. It’s just that this idea is not yet timely.
Enhancing Capital Market Efficiency
This is the least ideologically charged of the five goals. Few people get excited about securities settlement, COBOL language, SWIFT systems, or wire transfer windows. Nevertheless, this is indeed a significant driving force behind the advancement of the cryptocurrency industry. The logic is that the Western financial system is built on outdated technology stacks, and due to path dependency, it is extremely difficult to upgrade (no one dares to easily replace core facilities that handle trillions of dollars in settlements daily), thus it has long needed an update. This update must come from outside the system and adopt a completely new architecture. The value here is largely reflected in efficiency improvements and potential consumer surplus, making it less thrilling.
Expanding Global Financial Inclusion
Finally, there are some passionate individuals who view cryptocurrency as an inclusive technology that can provide low-cost financial infrastructure globally, offering financial services to some for the first time in their lives. This means enabling people to self-custody crypto assets (now more commonly stablecoins), access tokenized securities or money market funds, obtain credit cards issued based on crypto wallets or exchange accounts, and be treated equally on the financial internet. This is a very real phenomenon, and its superficial success provides comfort to many idealists whose enthusiasm has waned.
Pragmatic Optimism
So, who is right? The idealists or the pessimists? Or is there a third possibility?
I could elaborate at length, saying that bubbles always accompany significant technological changes, and that bubbles actually catalyze the construction of useful infrastructure, and that the speculation in cryptocurrency is particularly intense because it is financial technology itself, but that would be somewhat self-soothing.
My real answer is: maintaining a pragmatic optimism is the correct attitude. Whenever you feel despair about the cryptocurrency casino, you must hold onto this point tightly. Speculation, frenzy, and capital withdrawal should be understood as inevitable yet unpleasant side effects of building useful infrastructure. It brings real human costs, and I do not intend to downplay that. The normalization of meme coins, pointless gambling, and financial nihilism among young people is particularly disheartening and unhelpful to society. But this is an inevitable (even if negative) side effect of building capital markets on an unpermissioned track. I believe there is no other way; you can only accept that this is part of how blockchain operates. And you can choose not to participate in it.
The key is: cryptocurrency has its goals, and it is entirely normal to hold ideals about it. It is these goals that inspire thousands of people to dedicate their careers to this industry.
It’s just that it may not be as exciting as you imagine.
The world is unlikely to suddenly embrace Bitcoin fully. NFTs have not revolutionized digital ownership, and capital markets are slowly moving on-chain. Aside from the dollar, we have not tokenized many assets, and no authoritarian regime has fallen due to ordinary people holding crypto wallets. Smart contracts are mainly used for derivatives, with few other applications. To date, the truly product-market fit applications remain limited to Bitcoin, stablecoins, DEXs, and prediction markets. Yes, much of the value created may be captured by large companies or ultimately returned to consumers in the form of efficiency gains and cost savings.
Therefore, the real challenge is to maintain an optimism rooted in realistic possibilities, rather than indulging in blind optimistic fantasies. If you subscribe to a libertarian utopia, the gap between expectations and reality will ultimately lead to your disillusionment. As for the casino effect, unrestrained token issuance, and rampant speculation, these should be seen as ugly growths on the belly of the industry, difficult to remove yet objectively present. If you believe that the costs brought by blockchain have exceeded its benefits, then choosing disillusionment is entirely reasonable. But in my view, the current situation is actually better than ever. We have more evidence than ever that we are on the right path.
Just remember that goal.
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