The five camps of crypto

A quick guide to understanding the different motivations in crypto

Written by @caseykcaruso and @neverdidanything

In 2008 the Bitcoin paper described a world which would allow “online payments to be sent directly from one party to another without going through a financial institution.” People saw this vision and ran with it. But they didn’t just run, they sprinted, and in multiple directions. Today, in 2019, more than ten years after the Bitcoin paper was released, there is no longer a singular motivation. The industry is littered with varying opinions on what Satoshi meant, what blockchain enables, how much decentralization matters, and (perhaps most contentiously) what is realistically achievable. It’s our belief that the voices in the space can be boiled down into five primary schools of thought, or camps. Each camp has a unique motivation and defines success differently. Note that camps are not mutually exclusive, they are simply coordinates along a spectrum. Yes, projects can live between multiple camps. Don’t get mad.

Photo Credit: Nick Casale (@nicklcasale)

Sound money camp

The sound money camp is motivated by providing a global, censorship-resistant store of value. In plain english you can think of this camp as wanting a version of digital gold that no one, including the government, can mess with. They dream of a fixed-supply unit of account where no one can: increase the supply, decrease the value, charge extra fees, prevent a transfer or cease supply. Decentralization is a means to achieving financial self-sovereignty.

Related projects: Bitcoin and privacy-focused ZCash

Members of this camp like to say: “bitcoin is digital gold”, “store of value now, medium of exchange later”, “bitcoin, not blockchain”, “Venezuela”

Payments camp

The payments camp is motivated by removing the inefficiencies and rent-seeking behavior in centralized fiat payment systems. Rent-seeking can be thought of as entities taking more than they are entitled to. A common example of this is Western Union taking up to fifteen percent on sending money to a home country. Another well known example is credit card companies coming together to charge higher merchant fees than need be. This camp aims to replace cash and credit cards with cryptocurrency and enable micropayments and stablecoins. This camp is most concerned about scalability and speed and is sometimes willing to sacrifice decentralization.

Related projects: Bitcoin Cash, Ripple, Stellar, Zuckbucks™ (coming soon)

Members of this camp like to say: “Visa does 50k tps, BTC does 7!”, “bitcoin is peer to peer electronic cash”, “buy coffee with bitcoin”

Open finance camp

The open finance camp is motivated by providing access to an open financial system. This camp builds financial tools that compete directly with centralized financial institutions who they believe are no longer serving the interests of society. Lately the financial engineers also seem to be stepping up to help speculators speculate in creative ways (like a variety of Ponzi schemes).

Related projects: ERC-20 ICO token, MakerDAO (parts of), Dharma, dydx, Harbor, 0x, POWH

Members of this camp like to say: “Well you know, 2% of ETH is locked up in MakerDAO”, “DeFi, ”“Fork Your Bank”, “Financial freedom”, “Bank the unbanked!”

Web 3 camp

The web 3 camp is motivated by decentralizing the Internet and disintermediating centralized corporations who they believe rent-seek and wield too much power. Goals of this camp include enabling individuals to own their own data and redistributing profits in a fair way (e.g. away from Facebook-Amazon-Apple-Google).

Related projects: Dfinity, Ethereum (parts of), IPFS, Filecoin

Members of this camp like to say: “world computer”, “governance”, “decentralized uber”, “utility token”, “tokenization”

Decentralized ledger technology camp

The decentralized ledger technology camp is motivated by the idea that blockchains provide a transparent, immutable and private way to store and share data. The primary goal of this camp is to replace existing siloed database architectures with decentralized ledger technology. This camps sees blockchains primarily as a technical innovation as opposed to a philosophical movement.

Related projects: Walmart supply chain “blockchain”, HyperLedger, R3, Quorum and Kaleido

Members of this camp like to say: “blockchain, not bitcoin”, “immutability”, “distributed ledger”, “DLT”

While the community continues to figure out what blockchain has to offer and its place in the world, we hope these camp definitions help provide mental models around popular motivations.

So, which camp(s) are you in?

Special thanks to: Matt Corallo, James Prestwich, Michael Jordan, Claire Belmont, Rachel Rybarcyk, Arianna Simpson, Jon Kol, Alex Annese, Cindy Cheng, Jordan Kong, Teck Chia and many others for helping develop these ideas.