Crypto

Comparison | Games | Mind Map

Contents

• Value Proposition

Related

• Web3 Principles
• Wallet Security
• Blockchain Principles
• Coordination
• Adoption Problems

Value Proposition

Why does crypto matter? Crypto is incentive engineering.

1. It replaces the need for trust with verifiable truth.
2. Self Sovereign Identity: guard against a breakdown of trust.
3. Decentralized AI: not your model, not your mind.
4. Human Coordination: incentives and network effects to align intentions and motivate actions.
5. Ownership Economy: end crony capitalism.
6. Risk Free Rate: protection against market manipulation.
7. Capital Formation and Efficiency. The purpose of capital is support ideas that produce value.
8. Loyalty Programs: a token is a web cookie on steroids https://devourgo.io/

(Identity), Payments, DeFi, DePIN - Dan Smith

tip

Show me the incentive and I will show you the outcome - Charlie Munger

Blockchains are new open source code platforms. Anyone can fork code but you cannot fork culture.

Reality

The industry is currently infrastructure-heavy, with a lack of user adoption and applications compared to the technical progress made. There's an ongoing debate about whether crypto is primarily for infrastructure (financial rails, payment systems) or if it should focus more on consumer-facing applications. The current cycle is unusual, with prices running ahead of user adoption, which is a deviation from past patterns.

Venture Capital and Funding Dynamics

There's been a shift of capital from public to private markets in crypto, leading to more VC and angel investors but less retail participation. This has resulted in tensions between retail investors and VCs, affecting the overall industry dynamics. Despite concerns, some argue that more VC money in crypto is generally positive as it provides funding for founders to take risks and experiment.

Future Directions and Challenges

The industry is grappling with finding the right balance between decentralization and practical application development. There's a growing recognition that crypto might need to focus on use cases that don't require users to deeply care about or understand crypto technology. The concept of "restaking" and shared security is evolving, with ongoing debates about its implementation and necessity. Some argue that the industry needs to return to basics, focusing on achieving global-level payments as a "hello world" application before moving to more complex use cases.

Questions

What is holding back progress in delivering decentralized applications that make a real world impact? How can capital be directed towards projects that help people to live more fulfilling lives, rather that funding uncontrolled casinos?