Written by: Nic Carter, Co-founder of Castle Island Ventures
Translated by: Tia, Techub News
No man can serve two masters; for either he will hate the one and love the other; or else he will hold to the one and despise the other. Ye cannot serve God and mammon.
Matthew 6:24 (King James Version)
Ken Chang recently published an article titled "I Wasted 8 Years in the Cryptocurrency Space," lamenting the seemingly inherent capital destruction and financial nihilism of the industry.
People in the cryptocurrency circle love to mock such "angry exit" articles, gleefully recalling the dramatic exits of historical figures like… Mike Hearn or Jeff Garzik (pointing out how much Bitcoin has risen since then).
But much of what Ken says is correct. He states:
Cryptocurrency claims to help decentralize the financial system, and I believe that wholeheartedly, but in reality, it is just a super system of speculation and gambling, merely a replica of the existing economy. Reality has slapped me hard. I am not building a new financial system; I am building a casino. A casino that does not call itself a casino, but it is the largest, always-online multiplayer casino ever conceived by our generation.
Ken points out that venture capital firms have poured billions into supporting new L1 layers, which we actually do not need so many of. This is true, even if he slightly distorts the incentive mechanisms (venture capital firms are merely conduits for capital—they will do whatever limited partners are willing to tolerate). Ken condemns the proliferation of decentralized exchanges (DEXs), prediction markets, meme coin issuance platforms, and so on. Indeed, while you can theoretically argue for the validity of these concepts (except for meme coin issuance platforms, which are fundamentally unsound), it is undeniable that their proliferation is merely driven by market incentives, and venture capital firms are willing to fund them.
Ken says he entered the cryptocurrency space with enthusiasm and idealistic motives. These motives are very familiar to anyone who has ventured into cryptocurrency: he sympathizes with Randian libertarianism. However, he did not practice libertarianism; instead, he created a casino. Specifically, he is most famous for his involvement in the Ribbon Finance project, which developed a protocol allowing users to deposit assets into a treasury and earn returns by systematically selling options.
I do not want to be too harsh, but it is true. I would also engage in some deep reflection. When the conflict between principles and work becomes unbearable, Ken ultimately realizes with pessimism: cryptocurrency is just a casino, not a revolution.
Reading Chang's article, one thing that impressed me is that it reminded me of an article written by Mike Hearn nearly a decade ago. Hearn wrote:
Why Bitcoin Failed?_ The reason lies in the failure of the community. Bitcoin was originally intended to be a new form of decentralized currency, free from the pitfalls of "systemically important institutions" and "too big to fail," but it has now become a worse situation: a system completely controlled by a few. More worryingly, the Bitcoin network is on the brink of a technical collapse. The mechanisms that were supposed to prevent this have failed, and thus, there is little reason to believe that Bitcoin can be better than the existing financial system._
The details may differ, but the argument is the same. The original vision of Bitcoin/cryptocurrency was decentralization and cypherpunk practice, but it ultimately turned into a casino, something centralized. Both sides agree: it is ultimately no better than the existing financial system.
The arguments of Hearn and Chang can be summarized in the following statement: cryptocurrency was originally purposeful but ultimately became something else. Thus, we end up in a debate about the ultimate goals or purposes of cryptocurrency. But what is the ultimate goal of cryptocurrency?
The Five Goals of Cryptocurrency
In my view, these can roughly be divided into five camps. They are not mutually exclusive. For example, I personally resonate most with the first and fifth camps, although I sympathize with all camps. But I do not overly favor any one camp, not even the staunch supporters of Bitcoin. (Clarified in 2022)
- Restoring Sound Money
This is the original dream, shared by most (but not all) early Bitcoin holders. Their idea is that over time, Bitcoin will pose a competitive threat to the monetary privileges of many nations, potentially even replacing their currencies, bringing us back to a system akin to a new gold standard. This group generally views everything happening in the cryptocurrency space as a distraction, a scam riding on Bitcoin's coattails. Undoubtedly, Bitcoin has achieved limited success at the sovereign level, but as an important monetary asset, it has made remarkable achievements in just 15 years. Holders of this view are always in a state of disillusionment while holding onto hope, even if that hope may be somewhat unrealistic, believing that hyper-Bitcoinization is imminent.
- Encoding Business Logic into Smart Contracts
This is precisely the viewpoint that Vitalik Buterin and most Ethereum supporters vigorously advocate: since we can digitize money, we can also express various transactions and contracts in code, making the world more efficient and fairer. For Bitcoin advocates, this is sheer heresy. But in certain specific aspects, this viewpoint has undoubtedly succeeded, especially when considering contracts that are easily expressible mathematically, such as derivatives.
- Making Digital Assets Real
This is my best summary of the "Web 3" or "Read-Write-Own" concept. This idea is not without merit; it posits that digital assets should exist as tangibly as physical assets. However, the practice of this idea—such as NFTs and Web3 social platforms—has either been completely misguided or, to put it more diplomatically, ahead of its time. Despite billions being poured into it, few defend this idea today. Nevertheless, I still believe it has its merits. I think most of our internet dilemmas stem from the fact that we do not truly own our own namespace and cannot effectively control who we interact with and who can see our content. I believe that ultimately we will regain control of our online assets, and this will likely involve blockchain technology. But for now, the timing for this idea's realization is not ripe.
- Improving Capital Market Efficiency
This is the least ideologically charged of the five categories. You won't see many people particularly interested in securities settlement, COBOL, SWIFT, or wire transfer windows. But good or bad, it does drive an important branch of the cryptocurrency industry. The idea is that the Western financial system is built on outdated technology, which is difficult to update due to path dependency (you certainly do not want to easily replace the core infrastructure that supports trillions of dollars in settlements daily), and it is in urgent need of an upgrade. This update must come from outside the system and requires a new architecture. Much of the value here is reflected in efficiency gains and possibly some consumer surplus, so it is not that exciting.
- Expanding Global Financial Services Coverage
Finally, there are some well-meaning individuals who view cryptocurrency as an inclusive technology, believing it will enable countries in the Global South to access low-cost financial infrastructure, in some cases for the first time. This means giving them the opportunity to self-custody crypto assets, or more commonly, stablecoins, access tokenized stocks or money market funds, obtain debit cards linked to their crypto wallets or exchange accounts, and enjoy equal standing in the realm of internet finance. This is indeed a real phenomenon, and its apparent success has rekindled the confidence of many theorists whose enthusiasm has gradually waned.
Pragmatic Optimism
So, who is correct: the idealists or the cynics? Or is there perhaps a third, unknown truth?
I could go on and on about how bubbles always accompany significant technological changes, how bubbles actually promote the construction of useful infrastructure, and how cryptocurrency is particularly speculative because it is a financial-related technology, but that is mostly just self-soothing.
My real answer is: pragmatic optimism is the correct attitude, and you must maintain this attitude whenever you feel pessimistic about the cryptocurrency market. Speculation, frenzy, and arbitrage should be understood as inevitable but unpleasant externalities in the process of building useful infrastructure. It brings very real human costs, and I do not want to downplay that. The normalization of meme coins, mindless gambling, and financial nihilism, especially among young people, is disheartening and harmful to society. But this is an inevitable (albeit negative) side effect of building permissionless capital markets. I believe this situation would not exist without blockchain. You must accept that this is an inevitable result of how blockchain operates. You are not obligated to participate in it.
In summary, cryptocurrency does have ultimate goals, and there is nothing wrong with holding idealistic views about it. It is this force that inspires thousands of people to dedicate their lives to this industry.
It just may not be as exciting as you imagine.
The world may not see a proliferation of Bitcoin. NFTs have not fundamentally changed digital ownership. Capital markets are gravitating towards blockchain, but at a very slow pace. Aside from the dollar, we have not tokenized much. No authoritarian regime has been overthrown by the crypto wallets of ordinary people. Smart contracts mainly involve derivatives, with hardly any other use cases. Currently, the applications that truly have product-market fit (PMF) are limited to Bitcoin, stablecoins, decentralized exchanges (DEXs), and prediction markets. Indeed, most of the value created may be captured by large enterprises or ultimately returned to consumers in the form of efficiency gains and cost savings.
Thus, the challenge is to maintain an optimistic attitude based on realistic possibilities rather than indulging in blind fantasies. If you believe in Randianism, then the gap between your expectations and reality regarding cryptocurrency will eventually close. The casino-like operational model, unrestricted token issuance, and rampant speculation should be seen as unsightly warts on the industry's belly, but they are difficult to remove. If you believe that the costs of blockchain technology outweigh its benefits, then you have every reason to feel disappointed. But from my perspective, the situation is actually better than ever. We have more evidence than ever that we are on the right path. Remember the ultimate goal.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
