Crypto Newsletter 1/2: Who Is Crypto’s Patient Zero?
As we enter 2019, many are wondering “what’s next?” after 2018 proved to be such a tumultuous year in crypto. What enforcement action will regulators take next? What will the next successful dApp be? While these questions and many others have value, it can be useful to recalibrate our overall understanding of where this technology is heading before diving too deep into the minutiae.
In a personal blog post, Jon Choi, who works on Research & Development at the Ethereum Foundation, traces the history of cryptocurrency and breaks down the technology’s future potential into three theses:
- Sound money – censorship-proof value that cannot be inflated or tampered with by a central authority
- Web3 – An Internet free of centralized data sources; users own their data and can monetize that data
- Open finance – an extension of sound money that includes trustless financial systems, such as checking accounts, equities, debt, real estate, and more
Choi believes that these three concepts will ultimately converge, but at this early stage, there is cognitive dissonance between them: for example, why are we using blockchain, an identity-free solution, for identity-based systems, such as Web3 and open finance? There may be an answer, but it’s not without debate.
As Choi uses the blog to articulate his framework for thinking about crypto, he encourages entrepreneurs and developers to keep experimenting and writes that the most important thing to target is consumer adoption through product-market fit. Ideology alone will no longer be enough. Builders need to target consumers that are neutral to crypto’s ethos, and on that battlefield, the markets are king.
What’s Happening In the News
Before the holidays, two Congressmen proposed the “Token Taxonomy Act” that would exclude digital tokens from the classification of being securities.
Coinbase migrated $5B in crypto holdings to its upgraded storage system as it looks to continue its expansion in 2019. The move took months to prepare in order to avoid market movement around the transfer.
Bloomberg reported that Facebook is developing a stablecoin to facilitate in-app transactions for WhatsApp.
Articles We Read (And You Should Too)
In response to Jon Choi’s post, Multicoin Capital’s Kyle Samani goes narrow: what specific questions is crypto facing right now, and what can we address in 2019? The technical post is a reflection of the state of thinking in crypto today.
In a series of tweets from last February, Farmville co-creator and angel investor Sizhao Yang unpacks why he believes South Korea is Patient Zero for crypto adoption and why crypto itself is a mind virus that will take over the world.