Crypto Shame: A Lack of Value, Did I Choose the Wrong Industry?

Author: Deep Tide TechFlow

On August 5, the cryptocurrency market experienced a significant downturn. Amidst the decline, a statement from Péter Szilágyi, a member of the Ethereum Foundation and head of Geth development, struck a particularly painful chord.

He posted on X questioning the actual value of the crypto industry, stating that he often doubts whether he has chosen the right industry.

"For example, SpaceX, they send rockets to Mars? Human progress. They fail to launch a rocket and it explodes? Humanity learns lessons and still progresses. All outcomes lead to progress.

In contrast, the crypto industry is simply a casino for fools (apologies to the few exceptions). Prices go up? Great, when to buy a sports car. Prices go down? Lives are destroyed. What contribution does this make to humanity?

Yes, building a new currency system does take time. Of course… but in the process, can we do something useful? Everyone wants to be the next Vitalik, but no one wants to build something useful; everyone is just thinking about how to extract value.

I really don't see why this system shouldn't collapse? From a macro perspective, what will we lose? Everything the crypto industry has done so far is just a massive transfer of value; I haven't seen any substantial value creation.

Please note that getting rich by luck and then transferring funds to some non-crypto projects cannot be considered a success story of crypto. At best, it's just a story of a lucky philanthropist; more likely, it's just a simple case of diversified investment.

In my view, this industry should have started creating something truly useful that people are willing to use, or else it should close its doors.

At least Bitcoin attempted (though failed) to become a safe-haven asset. But the others are just selling shovels, with no signs of a gold rush."

This sense of "industry nihilism" and "lack of value" is not unique to Péter Szilágyi; it resonates with many industry practitioners today.

Three months ago, I conducted a small survey and found that many practitioners around me were considering "retirement," gradually fading out of the industry. Some entrepreneurs are actively looking for buyers to cash out, while many industry veterans are just lying flat…

When asked about the reasons, on one hand, they feel the industry has reached maturity, with institutions like BlackRock entering, making opportunities for ordinary people increasingly scarce; on the other hand, they are increasingly "fatigued" by the industry, feeling a lack of value in their work.

After years of ups and downs, many practitioners expressed that they have become disillusioned with the industry, having long lost their idealism, strictly separating work from life, with all work attention focused on making money; the essence of the industry is just a massive transfer of wealth, and the best strategy is to make money and run.

A client manager from a trading platform stated that, in her view, most investors are gamblers; when they make money, they are oblivious, and when they lose money, they threaten to defend their rights. Gamblers are not worthy of sympathy.

A project founder mentioned that when he first entered the industry, he also hoped to create a breakout product, but later realized this was a naive idea. At this stage, narrative is greater than community, which is greater than clinging to big names, which is greater than product. Even products are "forced" to integrate Ponzi mechanisms; even Paradigm, a leading crypto VC that once shaped industry narratives, has become adept at creating hype. Finding PMF (Product-Market Fit) in this industry is a long way off; first, one must survive.

Speculative profit remains the primary driving force of this industry; the K-line is the pulse of the crypto industry, while other aspects are merely disguises to rationalize trading behavior.

This inevitably brings to mind a recent buzzword: financial shame.

Recently, at the graduation ceremony of the Shanghai Jiao Tong University Advanced Institute of Finance, Vice Dean Li Feng stated in his speech: "Some people have begun to believe that the financial industry is worthless because finance does not seem to be hard-core technology, viewing it as an unnecessary transaction cost; some financial practitioners, including some of our classmates and alumni, even feel a sense of professional shame."

In the midst of the financial industry's restructuring, this new term exposes the collective unease within the sector.

Little do they know, such unease and "crypto shame" have existed in the crypto industry for many years.

Many practitioners deliberately hide their identities when communicating externally, primarily as a form of self-protection, but also to avoid judgment and scrutiny from others. In the public eye, the industry's label remains "harvesting leeks," so many industry insiders often present themselves under pseudonyms: bar owners, U.S. stock investors, financial practitioners…

Crypto industry investors only hold their heads high in social circles under two circumstances: one is when the market is booming, as confidence comes from rising prices; the other is when they gain recognition from mainstream individuals and the market, such as the SEC approving a Bitcoin spot ETF, or endorsements from figures like Musk and Trump…

To this day, crypto assets and this industry still crave more support and recognition from the public.

How can we break the cycle of crypto shame and lack of value?

First, this "emotion" is not new; since the inception of Bitcoin, FUD regarding the industry's value has always existed.

Babbitt co-founder Lao Duan was a Bitcoin evangelist in 2011, but two years later, he transformed into a "critic," stating, "The greatest value of Bitcoin at present is to satisfy the fantasy of 'getting rich overnight' for the Chinese people."

Whether in 2011 or now in 2024, if we extend the timeline, we can still say that phrase, "We are still early." Compared to industries like the internet, the crypto industry is still in its early stages and will continue to experience the valleys and darkness outlined by the technology maturity curve, bubble bursts, public skepticism, and then rebirth… There are too many unknowns worth exploring.

We must first acknowledge the current issues in this industry: heavy infrastructure, light applications, and a lack of true PMF. Aside from Bitcoin and stablecoins, most projects remain stuck in the lofty narratives of technology, even less grounded than MEME.

It's easier to point out problems than to build solutions and achieve results. We can offer more tolerance and support to entrepreneurs, especially those focused on applications.

Recently, Ethereum co-founder Vitalik also expressed similar views in his latest speech, "The Next Decade of Ethereum": "Developers should be brave to explore and build applications that impact the world; they shouldn't just replicate Web2, but should take the lead. By 2034, there won't only be desktops and mobile devices; there will also be wearable devices, locally running AI, AR…"

The development of blockchain and cryptocurrencies is not a transformation of productive forces but an improvement of production relations. Therefore, it won't provide immediate positive feedback like the emergence of ChatGPT. In the future, crypto may also need to actively integrate with emerging productive forces like AI and AR.

Recently, a group of industry professionals signed up for an African safari hunting tour, needing to settle in USD. The lengthy bank payment procedures, contract reviews, high Swift fees, and bank charges left the African guides and participants in distress. In the end, the African guides were introduced to stablecoins USDT/USDC… In contrast, the traditional Swift system seems like an antique from the Stone Age.

From Russia to the African continent, dollar stablecoins are quietly sparking a revolution worldwide, while Middle Eastern countries like Saudi Arabia are actively joining the mBridge project led by the People's Bank of China to achieve CBDC cross-border payments…

This is a long journey that requires patience, but even a small step forward can make the world different.

Finally, I want to say:

Some people feel "crypto shame" because they feel spiritually impoverished due to not creating actual value; others feel crypto shame because they have incurred losses year after year, collecting various losing strategies and are embarrassed to admit they are seasoned investors…

After all, in the current harsh market, for most people, making money while feeling a lack of value is already a happy dilemma.