This Tweet:
Hey
https://twitter.com/MDBitcoin/status/1846982410568642709
That is incredible — incredible that so few people use their Bitcoins!
Here are some other things that haven’t moved in a year:
- 99% of rocks.
- 93% of posters.
- 84% of dead people. (There’s a lot of demand for medical cadavers.)
All about the money
Years ago, I published
That was in 2019, before the 2021 explosion that brought crypto into the mainstream. It was a lonely and uncertain time. Nobody paid attention to Bitcoin. They thought crypto was dead, a passing fad that fell into the dustbin of history.
At the time, I and others thought their apathy created an opportunity: we get to introduce people to a new world-changing technology!
Nope.
With the introduction of ETFs, Wall Street took that job. We kept Michael Saylor, they got Larry Fink.
VCs have invested billions of dollars into crypto start-ups. They are now the face of crypto, pushing overpriced tokens for projects that have atrocious tokenomics and astronomical valuations.
Memecoins suck up investment capital and get the attention on social media.
Some altcoins have created new paradigms that stretch the boundaries of what’s possible, but they toil in the shadows. You only hear about them on Telegram, Twitter, and Medium (unless some influencer shills them).
“At least you can make money on meme coins,” they say.
Which is basically what crypto has become. A way to make money. The faster, the better.
You can understand why. Most people don’t worry about inverted yield curves and undercapitalized banks. Nor do they recognize violations of their privacy and human rights.
They don’t have any problems with the authorities. In fact, they look for those authorities to fix their problems.
To them, crypto seems like an odd abstraction, not an innovative technology.
Since they don’t know anything’s broken, they don’t see how Bitcoin fixes it. But they do see a chance to make money.
Dutch disease
Technology does not decide its fate. People do. They figure out what works and what doesn’t, what’s valuable and what’s not.
Projects compete and collaborate. Some win. Some lose but find niche applications. Some just lose.
We grow, prosper, and move on.
Not so with crypto.
You don’t get rewarded for creating things people use. All that matters is whether your token goes up. As a result, people don’t make useful things. They sell tokens for cash and spend it on other things.
As a result, you have millions of people who don’t know anything about cryptocurrency, but they see Wall Street’s talking heads saying it’s good for your portfolio and people like us saying they’ll make money from tokens. As such, is it any wonder that they flock to NFTs, memecoins, and new “L2s?” Should you need to wonder why prediction markets and decentralized exchanges remain the most popular crypto apps?
We have a form of Dutch disease, an economic phenomenon in which so many people make money from one activity that they stop investing in other activities. They simply buy the things they want with the money they get.
This is the premise of my first book, Consensusland. The country makes so much money selling crypto, nobody does anything else. They cash out their crypto, buy what they want, and find new cryptos to sell.
Stifling, not liberating
Sounds nice, doesn’t it?
That’s great for us early buyers, but no way to build an industry.
Imagine what people would’ve said about AI if the most prominent advocates shouted “long the robots, short the humans!” or “buy these 5 robots to make $1 million in 2024?”
Some people worked on robots, others worked on computers, and they occasionally collaborated on cross-disciplinary projects while “the mainstream” simply used whatever they came up with.
They didn’t have any tokens to sell. They had to create useful things before they could make money.
Everybody recognized the value in AI and the money they could make. But that was the outcome, not the goal.
With cryptocurrency, the profit comes before the work.
The problem?
By the time the work matters, developers have already made their money. VCs have already recovered their investments and, in some cases, cashed out completely. The teams have already gotten paid.
They don’t care anymore.
The Great Letdown
I fully empathize with Bitcoin maximalists. They see a world of opportunity that goes far beyond whatever cash they can make from flipping NFTs and memecoins.
I want that world, too — a fairer, more equitable monetary system that’s accessible to everybody and does not let governments destroy the value of your money.
How about we talk about human rights and corruption, better financial systems, more privacy, and lower business costs?
Cryptocurrency solves many problems. You’d think it should be easy to get people on board, right? To show them how useful it is? Why it matters?
Nope. No money in that.
Crypto will not matter until you decide to let it matter
If you’re HODLing Bitcoin for Lambos or using it to promote yourself, you’re doing the same thing.
That’s why people only think about crypto when prices go up. Through our actions, we make it seem like “price go up” is the only thing crypto has to offer.
Until that changes, nobody will take us seriously. Nobody will care about the technology, its applications, or any of the wonderful things people are trying to build.
We have replaced value creation with raw speculation, but people inherently crave value. They care about things that make their lives better.
They’ll pump our bags and give you exit liquidity, if you choose to take it. That’s probably why you got into crypto in the first place.
Eventually, the well will run dry. Speculators will lose enough money that they will stop chasing fast profits.
What happens when people realize they can’t make money from crypto anymore?
Mark Helfman publishes the