Crypto
would
be
better
off
remaining
a
niche.
The
greatest
crisis
in
crypto
so
far
has
been,
undoubtedly,
the
rapid
decline
and
tremendous
fall
of
FTX.
At
the
time
of
the
collapse
of
what
turned
out
to
be
Sam
Bankman-Fried’s
personal
piggy
bank,
it
was
the
third-largest
crypto
exchange.
Its
demise
caused
shockwaves
across
the
industry,
bringing
down
not
just
prices
but
a
litany
of
companies.
Note:
The
views
expressed
in
this
column
are
those
of
the
author
and
do
not
necessarily
reflect
those
of
CoinDesk,
Inc.
or
its
owners
and
affiliates.
This
article
is
excerpted
from
The
Node,
CoinDesk’s
daily
roundup
of
the
most
pivotal
stories
in
blockchain
and
crypto
news.
You
can
subscribe
to
get
the
full
newsletter
here.
At
the
time,
in
late
2022,
it
was
unclear
if
crypto
as
a
concept
would
ever
recover
–
the
blatant
fraud
of
what
was,
up
to
then,
among
the
most
consumer-savvy
and
trusted
crypto
companies
appeared
to
confirm
the
widespread
assumption
that
all
of
this
was
just
artifice
covering
up
fraud.
Today,
things
are
looking
up,
though
there
remains
a
pervasive
fear
that
the
industry
is
repeating
old
mistakes
and
bound
for
another
comeuppance.
For
veteran
crypto
investors
and
observers,
this
is
and
always
has
been
normal:
ever
since
the
bitcoin
(BTC)
market
crash
of
2014,
following
the
failure
of
Mt.
Gox,
and
subsequent
rebound,
the
cyclical
nature
of
the
market
has
been
an
accepted
part
of
life.
But
isn’t
it
odd
that
this
maturing
industry
has
normalized
these
boom-and-bust
cycles?
It
seems
to
me
that
mass
adoption
for
any
blockchain
or
consumer
application
is
contingent
upon
the
price
of
its
token
–
or
the
industry
itself
–
not
always
being
at
risk
of
imminent
collapse.
See
also:
You
Want
Crypto
Regulation?
I’ll
Give
You
Crypto
Regulation
|
Opinion
And
that’s
the
thing.
To
a
large
extent,
the
biggest
problem
with
growing
crypto
is
the
growth
of
crypto.
This
whiplash
between
euphoria
when
the
markets
surge
and
despair
when
it
shrinks,
every
four
years
or
so,
is
a
result
of
crypto’s
pursuit
of
mass
adoption.
Crass
adoption
The
process
is
clear,
a
textbook
case
of
economist
Robert
Shiller’s
“irrational
exuberance.”
Promises
of
reinventing
everything
from
money
to
the
internet
itself
spark
interest.
People
buy
into
the
dream
of
decentralization
(or,
for
many,
the
promise
of
a
fast
buck).
Popularity
drives
prices
up,
which
reflexively
drives
them
up
further
as
more
and
more
people
invest
–
until
something
breaks.
Almost
always,
the
things
that
fail
are
the
things
that
blockchains
were
built
to
mitigate
or
replace.
And
these
things,
almost
always,
were
built
to
make
crypto
palatable
and/or
easy-to-use.
It’s
not
an
uncommon
opinion
that
“the
masses”
likely
won’t
self-custody.
But
without
self-custody,
what’s
even
the
point
of
something
like
Bitcoin?
“The
risk
of
growing
adoption
is
that
new
entrants
aren’t
aware
of
Bitcoin’s
core
principles:
decentralization,
self-custody,
hard
money,
etc.
If
new
entrants
don’t
learn,
understand,
and
espouse
these
core
beliefs,
the
features
that
make
them
reality
may
not
remain
in
the
protocols
over
time,”
said
Alex
Thorn,
the
head
of
firmwide
research
at
investment
bank
Galaxy
Digital.
See
also:
An
Ode
to
LocalBitcoins
|
Opinion
Adoption
means
following
the
law
(which
is
often
at
odds
with
crypto’s
values)
and
creating
easy-to-use
sign-ins
and
on-ramps
(which
can
be
compromised).
There
is
a
tension
–
if
not
direct
competition
–
between
the
aims
of
decentralization
and
mass
adoption.
Grow
crypto
too
big,
and
you
risk
destroying
what
it
is
actually
useful
for.
“Simply
becoming
folded
into
the
dominant
financial
system
ends
up
ceding
a
lot
of
the
opportunities
that
matter
with
this
tech,”
said
Nathan
Schnieder,
professor
of
media
studies
at
the
University
of
Colorado
Boulder
and
author
of
“Governable
Spaces.”
It’s
a
point
echoed
by
University
College
Dublin
lecturer
Paul
Dylan-Ennis,
who
said
“crypto
is
a
subculture
that
cannot
accept
it
is
a
subculture.
Most
of
our
troubles
stem
from
how
talk
of
‘onboarding
the
next
billion’
causes
us
to
decay
our
values.”
There
all
along
There
is
a
certain
irony
that
developers,
founders
and
investors
have
spent
15
years
and
billions
of
dollars
searching
for
a
“killer
app”
for
blockchain,
and
yet
it
already
has
one.
Satoshi
Nakamoto,
and
those
who
actually
walk
in
his
footsteps,
have
built
digital
bearer
instruments
that
can
be
used
any
which
way
and
cannot
(easily)
be
taken
from
you.
That’s
it.
That’s
the
whole
point
of
crypto.
That’s
why,
while
almost
no
one
pays
for
coffee
with
bitcoin,
many
use
the
privacy
coin
monero
(XMR)
to
buy
this
or
that
on
the
darkweb.
If
you
look
at
how
crypto
is
actually
used
to
connect
with
the
real
economy,
you’ll
see
it’s
essentially
in
niche
areas.
These
include
black
or
gray
markets,
stablecoin
remittance
corridors
and
hobbyist
pursuits.
Mind
you,
these
are
huge
markets.
But
today,
as
in
other
periods
where
it
seems
like
crypto
is
right
on
the
cusp
of
breaking
through,
this
usage
pales
in
comparison
to
the
speculative
use
of
crypto,
where
capital
goes
in,
jumps
around
from
coin
to
coin
or
protocol
to
protocol
and
causes
the
number
to
go
up
–
essentially
creating
a
circular
economy.
And
that’s
fine.
Gambling
is
a
use
case
to
a
certain
extent.
But
if
people
want
crypto
to
be
used
productively,
developers,
founders
and
investors
should
be
building
for
people
who
have
an
actual
need
for
censorship-resistant
money
and
tools.
Almost
by
definition,
that’s
a
limited
audience.
This
is
just
my
opinion.
Many
disagree.
Other
views
Molly
White,
author
of
crypto-critical
news
services
Web3IsGoingGreat
and
“Citation
Needed,”
argues
that
crypto
is
already
mainstream.
“There
are
individual
projects
that
are
still
small
and
niche,
but
with
Brian
Armstrong
and
Sam
Bankman-Fried
rubbing
elbows
in
Congress,
and
BlackRock
and
Fidelity
launching
bitcoin
ETFs,
I
think
that
ship
has
probably
sailed,”
she
said
in
a
direct
message.
Privacy
advocate,
educator
and
monero
superuser
SethforPrivacy
sees
things
differently.,
The
“unfortunate
reality
is
that
most
people
don’t
yet
realize
the
need
for
Bitcoin
nor
are
they
willing
to
take
on
that
much
personal
responsibility,
and
as
such
we
must
focus
our
efforts
on
improving
Bitcoin
for
those
who
do
realize
the
need
today,”
he
said.
See
also:
In
Defense
of
Meme
Coins
|
Opinion
There’s
also
an
argument
that
decentralization
is
precisely
the
reason
crypto
will
go
global,
so
to
speak.
“The
ONLY
thing
that
makes
Bitcoin’s
global
ascension
possible
is
its
most
cypherpunk
attribute:
that
it
is
owned
by
no
one,
and
operated
by
the
users,
not
states
or
corporations,”
said
Alex
Gladstein,
chief
strategy
officer
at
the
Human
Rights
Foundation.
However,
it’s
not
exactly
clear
what
the
masses
want.
Ethereum
advocate
Emmanuel
Awosika,
for
instance,
admits
that
“while
we
believe
*everyone*
wants
privacy,
censorship-resistance
and
protection
against
nation-state
attacks,
some
people
are
fine
with
a
product
that
solves
a
problem
and
has
good
UX.”
While
not
everyone
needs,
let
alone
wants,
privacy,
censorship
resistance
and
maximum
decentralization,
Awosika
added,
“We
should
explore
getting
crypto
in
the
hands
of
as
many
people
as
possible.”
Likewise,
Roko
Mijic,
of
“Roko’s
basilisk”
fame,
argued
that
it’s
actually
scale
that
gives
decentralized
tools
any
power,
which
is
observably
true
in
that
Bitcoin
is
difficult
to
attack
because
it
has
miners
spread
across
the
world.
“You
can’t
resist
censorship
from
inside
a
small-scale
crypto
network
because
the
government
will
just
bring
down
the
whole
network,”
Mijic
said.
Justin
Ehrenhofer,
founder
of
Moonstone
Research
in
Chicago,
echoed
this
sentiment,
pointing
out
that
a
currency
is
only
useful
if
it
is
widely
accepted,
and
so
“cypherpunks
should
focus
on
building
systems
that
appeal
to
outsiders.”
However,
he
did
add
that
“with
wide-scale
adoption”
there
has
been
a
degradation
in
the
spirit
of
crypto,
given
that
the
average
user
stores
their
wealth
in
custodial
exchanges.
I
suppose
the
question
is,
how
valuable
are
crypto’s
core
values?
