Some of today’s most interesting crypto conversations are about what blockchains are supposedly good for.
At a high level, the debates fall along these general streams:
- Bitcoin or Bust (‘Bitcoin is digital gold’ & scarce SOV & everyone should get in on this because it’s better money, and X, Y, Z)
- Blockchain not Bitcoin (Bitcoin is cool, but blockchain’s unique properties are applicable across a far wider range of use cases than just cryptocurrencies)
- Eth is/isn’t Money (Ethereum = ‘programmable money’ versus Ethereum = BC-based operating system)
- Crypto is Liberation (bank the unbanked; DeFi; crypto finance & assetization)
- Massive Adoption (#BuyCrypto v. #EarnCrypto v. #Libracorns [Libra-based unicorn startups that will supposedly have ‘trickle-down’ adoption effect for crypto-native applications], etc.)
- Crypto’s Crypto (novel DAOs, chains, LAOs, federated chains, Urbit, etc. that do #1 through #5 much better than #1 through #5).
Of these, the massive adoption question has been trending especially hard recently. Here are a few tweets from IAmTexture that flesh this out:
Texture’s right, but his suggestions are still too abstract for many people. Especially because these suggestions are accompanied by signals that might be interpreted as fatalistic or dismissive, or however else people read constructive critique nowadays.
So let’s tackle the massive adoption question as concretely as possible, because it’s a big deal.
Crypto Today = #BuyCrypto
Right now, crypto money/finance are major use cases, though by no means the exclusive or defining use cases for blockchain technology. Here are the basic product-market fits for these two use cases:
- CryptoMoney = cryptocurrencies (Bitcoin) & tokens (DAI/SAI), are much more ‘sound’ than fiat-issued currencies (USD, GBP, EUR) therefore, people will gravitate to these cryptocurrencies and the markets built on top of them, especially when fiat currencies collapse and people are left with no choice.
- CryptoFinance = traditional financial institutions are inefficient, corrupt, and broken; crypto offers transparent, easy, cheaper alternatives to traditional financial forms, processes, institutions. As parties seek to maximize their economic gains, they will gravitate towards crypto finance.
Today, there are still lots of ways to get into crypto, such as building a mining rig and, say, mining cryptocurrencies. But building mining rigs is costly, and has a steep technical learning curve. So only enthusiasts and folks with large capital budgets go through this entryway.
The main entry point for crypto today is to open an account on some crypto exchange like, say, Coinbase, and to #BuyCrypto.
Concretely, this asks regular folks to deposit, say, $1000 of USD into an exchange account, and then “trade” their hard-earned $1000 into magical internet money.
Why have 30M+ Coinbase customers done this? Because crypto speculation can be lucrative: a person can trade their cryptocurrencies for other cryptocurrencies and realize sizable gains. Of course, they can also suffer sizable losses, but that’s not as sexy as talking about the gains.
Short of trading, there is also a huge smorgasbord of crypto-financial instruments where folks can take out crypto-loans secured by their cryptocurrencies. The simplest versions of this are exchange margin trading limits; complex versions of this include derivative contract rights to future income streams from yet-unbuilt crypto applications.
The basic idea is that if you have money, you can #BuyCrypto and then play with these programmable ‘money LEGOs’ however you see fit.
What’s Wrong with #BuyCrypto?
Whether DAI-hard DeFi folks, or Libra promoters, crypto-financiers know they can’t scale crypto globally with a product that requires people to invest money into crypto that these people simply do not have.
Being the shrewd capitalists they are, crypto-financiers understand the potency of #EarnCrypto as an OG crypto meme. So they are trying everything to pass off #CryptoFinance as a crypto-earning opportunities.
- Coinbase: #EarnCrypto by watching videos and learning how to #BuyCrypto;
- Binance: #EarnCrypto by referring your friends to Binance so they can #BuyCrypto;
- DeFi: #EarnCrypto in the form of high interest rates on crypto loans & foreclosing on other people’s debt positions when the markets turn south;
- […]
But at the end of the day, these so-called #EarnCrypto opportunities are just marginal to the actual underlying economic processes. Those are, at heart, (1) use fiat to buy crypto; (2) speculate and trade crypto-for-crypto; (3) get your friends and loved ones to #1 so that #NumberGoUp and ‘everyone’ can make more money in #2.
These are not material crypto earning use cases. Watching Coinbase videos to learn how to #BuyCrypto is incidental to Coinbase’s core economic process of … getting folks to buy and sell crypto (and to get rich from commissions at every step of the way).
However, the core problem of product-market fit for crypto finance is that the great majority of people simply do not have money to … buy crypto.
How to #EarnCrypto Today?
Outside of crypto mining, there are many real #EarnCrypto opportunities in the blockchain space, including:
- EthBounties/GitCoin (earn crypto for doing specific tasks)
- Brave/BAT (earn crypto for installing/using Brave Internet browser)
- Cent (social media app where you earn crypto for posting high-quality content
- Littercoin & TrashCash (earn crypto for reporting litter and adding it to open-source database)
- SpankChain (earn crypto for spanking your chain on camera)
- […]
But if there are so many different crypto earning opportunities within and outside crypto finance, why does Texture say that “Crypto is never going to be mainstream” — ?
The answer goes back to people’s needs and wants.
A lot of crypto-finance is premised on the idea that (1) poor people “in Africa” or some unspecified “developing countries” (2) need cheap loans, and (3) poor people want to borrow crypto money to do crypto things.
But those assumptions are wrong. Poor people don’t need or necessarily want easier ways to get into debt.
Poor people know better than anyone else that 9 times out of 10, more debt will make them more poor.
Poor people just want easier ways of doing socially-useful work that allows them to put bread on the dinner table. There’s no need to overthink it. Make it as easy as possible to #EarnCrypto for doing socially-useful work, and you get a crypto killer app that is a runaway success.
Right now, SpankChain, Cent, Littercoin, Brave, and many others are converging on this UX. The sooner it comes, the better. This is crypto’s missing money shot.
- Download app
- Take photo/video
- Click button to close or go back to 1
In less than one minute, a person goes from nocoiner to earning crypto.
What’s on the photo? Literally, anything. From nude photos (SpankChain) to litter hotspots (Littercoin) to a photo of the username and password to your WiFi network that you want to make available to others in exchange for some crypto karma. Map data. Weather data. And so on.
The point is, in this simplified form, there are no logins, no KYCs, no money, no taxes, no tracking, no adware.
Why do people use these crypto earning apps? Why do people need them?
- Short answer: this is how ordinary folks put bread on the table. Just ask any Uber driver who is working for less than minimum wage as an “independent contractor” to a centralized firm.
- Long answer: crypto earning dApps (A) monetize the previously unmonetizable and/or (B) marketize the previously unmarketizable and/or (C) simply connect people and facilitate peer-to-peer data sharing through much more efficient and secure decentralized paths.
For every Uber, a dUber. For every AirBnB, a dAirBnB. But that’s just the surface. The real potential for market-making and trans-market economic organization is much more disruptive, especially with tokenomic models that allow real-time incentive adjustments.
Think order-of-magnitude efficiency gains, not just a 10–30% improvement on an existing process. Tomorrow’s crypto earning opportunities are the future of crypto. Full stop.
What’s Getting in the Way?
There are a few things standing in the way of crypto massive adoption. One of them is the inexplicable way that even major projects shoot themselves in the foot by limiting their own #EarnCrypto offerings.
Exhibit A of this is KIK’s KinIt crypto-earning app, now being scrutinized by the SEC because KIK’s own executives didn’t believe in the utility potential of their own platform.
A lot of it is also ideological baggage that crypto people bring to scaling discussions.
Yaniv Tal is partially right here:
He is right that regular people do not care about ‘censorship resistance’ or ‘decentralization’ or ‘privacy/anonymity’ enough to change their economic habits in a fundamental respect. People change their habits when they have no other option (stick) or when they find a much easier way to put bread on the proverbial table (carrot).
But censorship resistance, decentralization, anonymity are the under-the-hood mechanics by which crypto allows poor people to earn more bread and carrots.
The problem isn’t with this or that narrative (‘censorship resistance’ or ‘Eth is Money’ or ‘World Computer’). The problem is with totalizing narratives, especially when the totalizing narratives entail heightened regulatory scrutiny along a particular arc (classification of tokens as moneys, assets, securities; or classification of blockchain networks as financial market infrastructure).
Many people think these narratives are benign, just one way of looking at crypto of many. But that’s not the case. If you want to see how assumptions about a particular technology influence outcomes, please remember what happened with KIK, or just scroll through any Twitter thread that argues blockchains are more than just ‘money’ and ‘finance.’
The reality is that a lot of people who buy into #CryptoMoney & #CryptoFinance totalizing narratives may genuinely believe that anything that challenges the supremacy of those narratives weakens their investment.
But crypto’s most lucrative applications, including its most lucrative monetary applications, lie far beyond existing monetary and financial frameworks.
The easier it is to receive crypto tokens and badges for doing socially-useful work, the higher the economic value of the tech stack that enables and sustains these new modes of economic activity:
- Download app
- Take photo/video
- Click button to close or go back to 1
