Original author: RICHARD CHEN Article compilation: Block unicorn
For any crypto veteran who has been in the industry for any length of time, there is no doubt that the culture of the industry has changed significantly over the past year.
A culture war is beginning to emerge between the early purists (the Crypto Computer Party) and the later tourists (the Crypto Gambler Party), which is shaping up in crypto. It creates divisions among the people who built the community.
I will explain where these two "political parties" stand and how we got to where we are today in conflict, and then propose a scenario for how the crypto industry can resolve the culture war. A nuanced path forward.
Cryptocomputer faction
People in this camp believe in the industry The idea of founder Satoshi Nakamoto is to decentralize the transfer of power from corrupt institutions to the hands of the people.
They tend to be early entrants into the crypto industry. This group in 2013 was primarily hard money liberals interested in Bitcoin as a hedge against irresponsible monetary policy. For those financial investors who are staunch supporters of Ron Paul and keen to invest in gold, Bitcoin is seen as a tool to absorb the excess liquidity caused by the Federal Reserve printing money. In short, they believe Bitcoin can serve as a hedge against the Federal Reserve’s irresponsible monetary policy, absorbing excess money supply.
This group of 2017 (my peers) are primarily technologists, perhaps less ideological than previous generations, but are attracted to crypto because It represents a new computing paradigm. Ethereum demonstrated the feasibility of decentralized applications (dApps), enabling you to now own data rather than just read or write it. Along came the concept of web3, which sought to disintermediate the role of big tech companies and the gatekeepers of the internet.
Today, both groups represent the unknown majority who still believe in Satoshi's vision and are enthusiastic about the new technologies driving the field. Feel optimistic about use cases and products. However, at the same time, they are afraid to publicly criticize the popular Ponzi projects that are currently being hyped by some KOLs, otherwise they will be attacked online by keyboard warriors. Therefore, they choose to remain silent.
Crypto Casino Faction
This camp of people are skeptical and believe crypto is nothing more than a decentralized casino and want to keep it that way. The purpose of their construction is to add more gaming tables to the casino, which is to find new creative ways to hyper-financialize everything and speculate on it, whether it’s speculating on a friend’s net worth through a mobile phone or on shitcoins through a Telegram bot Speculate.
They are often people who entered the encryption industry after 2021, and their backgrounds mostly come from the trading and financial fields. This is a niche group that is very good at getting attention on Twitter. Thence they dominate online discussions and create tensions between early purists and later tourists, similar to the nativist resentment of culturally assimilated immigrants.
They also tend to be younger, and my hypothesis is that this is the impact of ZIRP and the traditional financial system on Millennials and The second-order effects of Generation Z’s failure. Young people increasingly feel they need to get rich quickly to pay off student loans and afford home loans. When people feel like they are constantly stuck under stress and can’t get out of their situation, they may seek out casino opportunities in an attempt to improve their situation through gambling.
How did we get here?
Casinos are very useful for early project launches because the "degens" are the early adopters. They have the potential to be testers of unproven financial products and users of high-risk assets. To outsiders, it’s easy to overlook “degens,” but they are the lifeblood of the crypto industry. They are the blue-collar workers hustling in the trenches, fighting the odds (with countless risks) for each new product.
During the crypto bear market, no new users entered the space. The app is stuck in a stasis of growing user numbers and is forced to focus on its existing "degen" core user base. This is acceptable in the short term as transaction volume is primarily driven by core users. For example, OpenSea’s top 2.2% of users are responsible for more than half of its trading volume.
Problems arise, however, when projects begin to doubt that mainstream adoption is possible. Holding this notion that crypto will never cross the early “degen” divide incentivizes people to push the degeneration of blockchain technology and design applications like a zero-sum game like a casino. Thus we get Ponzi token economics, multi-level marketing schemes, and the most unpleasant parts of finance.
The products of the Ponzi project have to meet the needs and narratives of the market in the short term, because there will always be a small number of thousands of crypto-native " degens” who gamble on every new shiny speculative application. This creates a zero-sum game culture of financial engineering, where influencers use hype to lure unsuspecting retail users into the market, only to sell to them later. This is why so many people are desperately trying to get attention on Twitter and become influencers, because only then will the odds stack in their direction in the casino. In casinos, clout is a business model that makes money.
Outside of the casino, however, catering only to "degens" can be frustrating for anyone not in the "degen" bubble Disgusted. I don’t blame the average consumer for hating cryptocurrencies and NFTs, every time they hear about it in the news it’s associated with greed, Ponzi projects, and the worst personalities on the internet. Designing zero-sum applications will drive more people away from the crypto industry and unwilling to use on-chain products.
We need to think about how to expand the crypto user base, just like the Bitcoin ETF has done. Bitcoin ETFs are a breath of fresh air in the space, as trillions of dollars in retirement account savings that were previously inaccessible to crypto can now finally access Bitcoin for the first time.
Speaking of which, how exactly do we achieve mainstream adoption?
The way forward
I am in October Met Steve Wynn,who told me about his experience growing the hotel and casino business. One of the unique insights he came up with at the time was to focus on experiences beyond gambling. Las Vegas was once a place where people came just to gamble and leave, with little other reason to stay.
While it is now commonplace that every Las Vegas casino offers concerts, shows, celebrity chef restaurants, luxury shopping and more, This sounded crazy when the Mirage Casino opened in 1989, and its success quickly prompted other casinos to invest in higher quality facilities and entertainment beyond gambling.
In the 1990s, in transforming the Las Vegas Strip from a primarily gambling destination into a world-class entertainment and leisure destination played an important role. Good hospitality makes the Las Vegas experience less zero-sum and contributes to the substantial growth in the number of tourists who visit Las Vegas each year for a variety of reasons.
Clearly, this is a lesson worth learning for the crypto industry. We need less zero-sum games and more positive-sum experiences.
One good example is prediction markets. Degens love prediction markets because they like to bet on outcome events that will either win or lose, just like they can either make 10x their profit or lose all their money gambling on Memecoin. Meanwhile, countless studies have shown that by removing bias and introducing the concept of “stake,” prediction markets are more accurate than mainstream media and experts.
People who use prediction markets don't necessarily need to bet on them, but can use them as a news source for geopolitical events, just like people don't need them just for gambling And the same goes for visiting Las Vegas. Even Trump now regularly posts his odds on Polymarket on Truth Social.
There are many other examples. For example, use Decentralized Physical Infrastructure Networks (DePIN) to build WiFi mesh networks or vehicle performance data. Use airdrops to incentivize restaurant loyalty or increase fitness levels. Using NFTs allows emerging creators to enter the market without having to go through Hollywood’s gatekeepers. Crypto degens are early adopters in all of these areas, but the value they bring to society is positive-sum.
There is a saying that startups are more likely to die from suicide than homicide. This is also true for startup industries like crypto — degen culture slowly destroys itself and people leave the industry, which is more likely to lead to its death than Gary Gensler or Elizabeth Warren banning crypto. Speculation has always been a part of crypto culture, and denying the speculative component (that exists in crypto culture) is a very naive view. But instead of accelerating the degenerate money game, we should use degen to drive new positive-sum use cases and bring more people into the industry.
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