Why do I not regret spending 8 years in the crypto industry?

Written by: Nic Carter, Partner at Castle Island Ventures

Translated by: AididiaoJP, Foresight News

Original link:

Ken Chang recently published an article titled “I Wasted Eight Years of My Life in Cryptocurrency,” in which he painfully discusses the industry’s inherent capital destruction and financial nihilism.

People in the crypto world love to mock such “angry exit” articles and enjoy reminiscing about historical figures like Mike Hearn or Jeff Garzik who made high-profile departures back in the day (while also noting how much Bitcoin has risen since they left).

But Ken’s article is largely correct. He states:

Cryptocurrencies claim to help decentralize the financial system; I once believed this wholeheartedly. But the reality is, it’s just a super system of speculation and gambling, essentially a replica of the current economy. The truth hit me like a truck: I wasn’t building a new financial system; I built a casino. A casino that doesn’t call itself a casino, yet is the largest, 24/7, multiplayer online casino constructed by our generation.

Ken points out that venture capitalists have burned billions of dollars funding various new blockchains, but we clearly don’t need that many. He’s right; although his description of incentive models is somewhat biased (VCs are essentially capital pipelines—they generally only do what limited partners are willing to tolerate). Ken also criticizes the proliferation of perpetual and spot DEXs, prediction markets, meme coin launch platforms, etc. Indeed, while you can defend these concepts abstractly (except for meme coin launch platforms, which make no sense), there’s no denying that their proliferation is merely a market-driven response to incentives, and VCs are willing to pay for it.

Ken says he entered the crypto space with idealistic aspirations, eyes shining with hope. This is familiar to many participants in this field: he leans towards libertarianism. But in the end, he didn’t practice libertarian ideals; instead, he built a casino. Specifically, he’s best known for his work at Ribbon Finance, a protocol that allows users to deposit assets into vaults and earn yields by systematically selling options.

I don’t want to be too harsh, but it is what it is. If I were in his shoes, I would also reflect deeply. When the conflict between principles and work becomes unbearable, Ken arrived at his bleak conclusion: cryptocurrencies are casinos, not revolutions.

What struck me deeply was that it reminded me of an article written nearly ten years ago by Mike Hearn. Hearn wrote:

Why did Bitcoin fail? Because its community failed. It was supposed to become a new kind of decentralized currency, with no “systemically important institutions,” no “too big to fail,” but it turned into something worse: a system entirely controlled by a few. Even worse, the network is on the brink of technical collapse. The mechanisms meant to prevent all this have failed, so there’s little reason to believe Bitcoin can truly be better than the existing financial system.

Though the details differ, the argument is the same. Bitcoin / cryptocurrencies were supposed to be something (decentralization, cypherpunk practices), but turned into something else (casino, centralization). Both agree: ultimately, they did not surpass the existing financial system.

Hearn and Ken’s arguments can be summarized in one sentence: cryptocurrencies initially had good intentions but ultimately went astray. So we must ask: what is the true purpose of cryptocurrencies?

Five Goals of Cryptocurrency

In my view, there are roughly five camps, which are not mutually exclusive. Personally, I most align with the first and fifth camps, but I have empathy for all. I am not stubborn about any one side, even the hardcore Bitcoin camp.

Restoring Sound Money

This is the original dream shared by most (but not all) early Bitcoin enthusiasts. The idea is that, over time, Bitcoin will pose a competitive threat to the monetary privileges of many sovereign nations, potentially replacing fiat currencies and returning us to a new gold standard order. This camp generally considers everything else in the crypto space as interference and scams, merely riding on Bitcoin’s coattails. Admittedly, Bitcoin has made limited progress at the national sovereignty level, but in just 15 years, it has become a significant monetary asset. Those who hold this view are often caught in a paradox of disillusionment and hope—harboring near-delusional expectations that Bitcoin will become ubiquitous soon.

Encoding Business Logic in Smart Contracts

This view is advocated by Vitalik Buterin and most Ethereum camp members: since we can digitize money, we can also express various transactions and contracts in code, making the world more efficient and fair. To Bitcoin purists, this was once heresy. But it has achieved success in certain narrow fields, especially contracts that are easily expressed mathematically, such as derivatives.

Making Digital Property Real

This is my summary of the “Web3” or “read-write-own” philosophy. Its premise is reasonable: digital property should be as real and reliable as physical property. However, in practice, NFTs and Web3 social platforms have either gone completely off course or, to be polite, are ill-timed. Despite billions of dollars invested, few now defend this philosophy. But I still see value worth pondering. I believe many of our current online dilemmas stem from not truly “owning” our digital identities and spaces, nor being able to effectively control interactions and content distribution. I believe one day we will regain sovereignty over our digital assets, with blockchain likely playing a role. But this idea is not yet ripe.

Enhancing Capital Market Efficiency

This is the least ideologically charged of the five goals. Few get excited about securities settlement, COBOL, SWIFT, or wire transfer windows. But nonetheless, this remains a significant driving force behind the crypto industry’s development. The logic is: Western financial systems are built on outdated tech stacks, and due to path dependence, upgrades are extremely difficult (no one dares to replace the core infrastructure handling trillions of dollars daily). Therefore, a major overhaul is needed from outside the system, adopting a completely new architecture. Its value mainly lies in efficiency gains and potential consumer surplus, making it less glamorous.

Expanding Global Financial Inclusion

Finally, some passionate individuals see crypto as an inclusive technology that can provide low-cost financial infrastructure worldwide, giving some people their first access to financial services. This means enabling people to self-custody crypto assets (more commonly now stablecoins), access tokenized securities or money market funds, obtain crypto-wallet or exchange account-issued credit cards, and be treated equally on the financial internet. This is a very real phenomenon; its surface-level success offers solace to many disillusioned idealists.

Pragmatic Optimism

So, who is right? The idealists or the pessimists? Or is there a third possibility?

I could go on at length about how bubbles often accompany major technological changes, and that bubbles actually catalyze the building of useful infrastructure. The reason cryptocurrencies are so speculative is because they are a form of financial technology, but this is somewhat self-soothing.

My true answer is: maintaining pragmatic optimism is the right attitude. Whenever you feel despair about the crypto casino, hold onto this. Speculation, frenzy, and capital flight should be understood as unavoidable but unpleasant side effects of building useful infrastructure. It brings real human costs, and I do not mean to downplay that. The normalization of meme coins, pointless gambling, and financial nihilism among young people is especially frustrating and unhelpful to society. But these are inevitable side effects of building capital markets on an permissionless track (even if negative). I believe there is no other way—you can only accept that this is part of how blockchain operates. And you can choose not to participate.

The key is: cryptocurrencies have their goals, and it is perfectly normal to hold idealistic hopes for them. It is this very goal that motivates thousands of people to dedicate their careers to this industry.

However, it may not be as exciting as you imagine.

The world is unlikely to suddenly embrace Bitcoin entirely. NFTs haven’t revolutionized digital ownership, capital markets are slowly moving on-chain. Aside from the dollar, we haven’t tokenized many assets, and no authoritarian regime has fallen because ordinary people hold crypto wallets. Smart contracts are mainly used for derivatives, with few other applications. The applications that truly fit the market so far are limited to Bitcoin, stablecoins, DEXs, and prediction markets. Yes, much of the value created may be captured by large corporations or ultimately returned to consumers in the form of efficiency gains and cost savings.

Therefore, the real challenge is to maintain a grounded optimism rooted in reality, rather than falling into blind optimism. If you believe in a libertarian utopia, the gap between expectation and reality will eventually disillusion you. As for casino effects, unlimited token issuance, rampant speculation—these should be seen as ugly blemishes in the industry’s core, difficult to remove but objectively present. If you think the costs brought by blockchain outweigh its benefits, then disillusionment is entirely reasonable. But in my view, the current situation is better than ever. We have more evidence than ever that we are on the right path.

Just remember that goal.