Research Summary
The report explores the current state of the crypto industry, focusing on the balance between technology and use cases. It discusses the role of speculation in the industry, the need for new applications, and the potential impact of institutional inflows. The report also presents a theory of crypto’s evolution through various macrocycles.
Key Takeaways
Technology vs Use Cases
- Technological Friction: The report suggests that the lack of useful applications in the crypto industry may be due to technological friction. It posits that the solution may be to abstract the complexity away rather than add more infrastructure.
- Need for New Applications: The report argues that the crypto industry needs new use cases that go beyond speculation to attract more users and money. It criticizes the current trend of building tech for the sake of tech and the lack of consumer-oriented use cases.
Role of Speculation
- Speculation as a Driving Force: The report identifies speculation as a major force in the crypto industry, suggesting that it is both driving and being driven by the industry. It argues that the industry is currently in a macrocycle of “degentropy,” characterized by a blend of dystopian memes and utopian techno promises.
Impact of Institutional Inflows
- Potential Risks of Institutional Inflows: The report warns that the crypto industry may not be ready to absorb trillions of institutional inflows. It suggests that such inflows could set the financial system on fire and lead to a major bust in the crypto industry.
Evolution of Crypto
- Macrocycles of Crypto: The report presents a theory of crypto’s evolution through various macrocycles, from the cypherpunk movement to the current phase of crypto entertainment. It predicts a future phase of deployment, but warns that a major disillusionment may be looming ahead.
Actionable Insights
- Focus on User Needs: Developers and entrepreneurs in the crypto industry should focus on creating new applications that meet user needs and demands, rather than building tech for the sake of tech.
- Consider the Role of Speculation: Stakeholders in the crypto industry should consider the role of speculation in driving the industry and its potential impact on the future of crypto.
- Prepare for Institutional Inflows: The crypto industry needs to prepare for potential institutional inflows and consider the potential risks and impacts of such inflows.
