Crypto apps fit two broad categories:  

Only with crypto: non-sovereign SOV/payments, decentralized finance, digital art, DAOs, memecoins, some depin, decentralized social, etc.

Better with crypto: open finance (RWAs/fiat stablecons), prediction markets, international payments, most depin, tokenized equity, etc.  

“Only with crypto” has been facing headwinds (apart from SoV) while "better with crypto” has been gaining steam.

Will this change? If so, how?  

Maybe the flip happens when there are better distribution channels, as pioneered by better with crypto use cases, more regulatory clarity, and of course, the key ingredient: time for those two things to mature.  

This would be some version of “better with crypto” use cases putting wallets in users' hands, while their “thumbs learn” to do the “only with crypto” things. On the other hand, many of the “better with crypto” use cases are notable in that they are often not meaningfully decentralized—they simply rely on the decentralization of the underlying blockchain as a back-end for its openness, interoperability, and settlement.

If blockchains turn out to be back-end plumbing, it's likely that users won't see the underlying metal, and the learned behaviors involved with “only with crypto” use cases will be more distant or abstracted.  

One way to look at this is through Chris Dixon's Strong and weak technologies framework, where “only with crypto” is strong tech and “better with crypto” is weak tech:  

Strong technologies often develop according to the Perez/Gartner hype cycle…During the trough of disillusionment, entrepreneurs and others who invested in strong technologies sometimes lose faith and switch their focus to weak technologies, because the weak technologies appear nearer to mainstream adoption… That said, weak forms of technology can be successful…Weak technologies adapt to the world as it currently exists… Strong technologies adapt the world to themselves.

I'm optimistic, but curious: what will be the catalysts for "only with crypto" to make a comeback?

Discussion on Twitter / Farcaster

This post first appeared in Jesse's newsletter.

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