Cynical optimism for crypto

Three heterdox and cynical but optimistic takes on crypto

October 3, 2022
Jonathan Libov

Here are my three most heterodox takes on crypto:

  1. It’s often said that UX is what’s holding crypto back. I think crypto would have far fewer users if the UX were better. Crypto’s mediocre UX provides a sort of positive friction that augments a sense of in-groupiness.
  2. Crypto is more like Scientology than it is web2, or prior waves of technology, in that it’s driven by a strange brew of religion and avarice. In some respects crypto resembles today’s far political left in its religiosity and inscrutability than it does web1 or web2, which were very utilitarian.
  3. Many people working in crypto have a stated preference for building the future but a revealed preference of longing for the past. Between 8-bit art, market maps that enumerate web3 versions of web2 products, and even the term web3, many web3’s builders view web1/web2 not with healthy competitiveness but deep nostalgia; longing for the increasingly inaccessible freedom and paths to prosperity that web2 generated in its early days.

With all that said, I’m quite optimistic that crypto is going to work.

Why? For one, crypto has a great use case right now: belonging. With churchgoing and other forms of IRL community on the decline, many things need to fill the void. And since having private thoughts and beliefs separate from work is sort of passé, crypto is an excellent vehicle for infusing work-life with a community-driven mission. This renders the “Isn’t it just tokens and financialization all the way down?” critique sort of moot: After all, religions and other tight-knit communities also work just fine without being reducible to an underlying, real-world, income-bearing assets. They just have other kinds of growth loops. Good luck competing with religions.

And of all the religions we could have invented to replace what’s on the decline, crypto is a great one. Satoshi and Vitalik’s contributions to this world have been as selfless and benevolent as one could ever hope for: They’ve inspired an entire generation of young, capable people to be relentlessly optimistic, which is awesome. There are surely thousands of S-Tier people who would work on really hard problems in crypto in their spare time even if it didn’t pay.

But of course crypto does pay, and that’s where all the analogies to web2 and every other technology wave I can think of breaks down. As Antonio García Martínez articulated, Web2 was product-first and is still struggling to figure out business models; Web3 is business-model first and struggling to figure out product.

Though it incentivizes a lot of unsavoriness and scamminess due to the economics, a technology wave with a business model and distribution nearly baked in is quite a growth loop.

Which is to say that crypto has the benefit of all the fervor and convenient obfuscation) that come with religion and near-term, irresistible, liquid financial incentives. It seems like it will be more than enough to keep lots and lots of people hanging around the rim until the Fed has a major liquidity crisis or some nation breaks and goes rogue and crypto breaks through.

Waiting for crypto

Were I 10 years younger (not quite as young as the kid on the tricycle, but younger than I am now) I’d surely be patient and optimistic enough to invest my time in crypto. But now I’m the dad, and I’m counting on the money I’ve in crypto to put that kid through college. I’m optimistic.