The first ten years of smart contract blockchains were born of bitcoin’s original cypherpunk values: censorship resistance, open source, permissionlessness, and a new glimmer of building a democratic/equitable internet on top of a shared world computer.
Today, those ideological values are meeting with market pressure, because the mainstream market values different things: performance, cost, profitability, compliance.
Powerful technologies are rarely used as intended by their creators or the early-adopter scenes. See bitcoin, the “peer-to-peer electronic cash system” vs. Bitcoin, the ETF; or USDC.
As the original values of smart contract blockchains mingle with mainstream market values, it's likely that the next ten years will pull in a different direction.
Many of the growing use-cases of smart contract platforms—fiat stablecoins/RWAs, open finance, many depin networks—are neither decentralized, permissionless, nor censorship resistant, but simply use the decentralization of the underlying blockchain for their openness, interoperability and settlement. Applications are also increasingly abstracting L1 cryptocurrencies, which historically have been viewed as censorship-resistant “internet money,” causing many to rethink the value proposition of the largest coins, including the base assets of next generation chains.
For early-adopters, this can be difficult to reconcile. It's not what many in the scene showed up for. Does that mean it's over?
I don’t think so. But it's probably the end of the beginning.
In meeting the market on its values, crypto is commercializing. Commercialization, especially that of open/permissionless software, is the form-factor that takes good ideas to their largest possible audience, and thereby makes the most impact on the world.
And commercialization often comes with compromises. The opportunity is to shape the nature of those compromises, and thereby, the outcome of that commercial impact. To do that, you have to drop ideological dogma, adapt to the game on the field, compete, and try to steer things in the direction you want them to go.
For example, a compromise on decentralization for scale (whether by way of rollups or integrated architectures) can better serve use cases that are putting wallets in people’s hands today. If that works, the next opportunity is to improve decentralization—and then, to teach many more thumbs to learn new things that skew towards the original ideology.
This is personal for me. I care a lot about the original ideology; it was the hook that brought me here. That said, I care much more about impact. I learned this lesson in a different creative scene. I went to university in Montréal, which had an unusually productive culture scene at that time (Arcade Fire, Tiga, A-Trak, Chromeo, Grimes, Vice, American Apparel, etc.) Things emerging from this local scene were also quickly global, transported and mixing with other hipster scenes via the internet, especially music blogs of 2004-2012 (Hype Machine, anyone?)
Fairly quickly, that scenius mixed with the mainstream market. The way that played out was principally by way of corny artists and brands taking the essence of sound and culture, dropping the nuance and packaging it up to retail in a way that was popular, but vapid. Meanwhile, a handful of artists and creative people who pioneered that original scene persevered and became pop culture fixtures. To do that, they typically had to compromise just enough between the original movement and something that was palpable to the masses. That mix of determination and pragmatism was admirable, because it has the most reach, and thereby, the most impact in taking culture one step forward at the largest possible scale.
So if you’re feeling like the values that got you into crypto are getting diluted by the mainstream market, I hear that, but try to see it in a different light—because in terms of impact, the commercialization of crypto likely means the real opportunity is just getting started.
I’ll try to write more specifically with examples of what that opportunity might look like. I scratched the surface of this in my post yesterday on “only with crypto” / “better with crypto" but there's more to say.
This post first appeared in Jesse's newsletter.
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