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GM folks 🙋🏻‍♂️,

Chain Venturer is taking a break this week. We have great guests lined up for the next month but the team was busy preparing for new content as our new website went live!

Take a look below. I think our designers have done an amazing job :)

Anyway, I’ve been meaning to get into writing again as I settle into my new role as an Investor — now it actually makes sense for me to produce long-form writing as it aligns a lot more with my job.

With that, I hope you enjoy this piece for your weekend read.

Why are we in crypto?

In it for the money but there’s much more.

It has been a while since I wrote one of these, so I plan to just let my raw thoughts guide my fingers. Before we start, go grab a cup of coffee and sit back. It might get rather pensive. ☕

After all, this is a piece that aims to explain why are we even in crypto.

…

Crypto is now a decade-old industry. To be precise, it has been around for 15 years, but while the Bitcoin whitepaper was released in 2008, there wasn’t much to do onchain until Ethereum pioneered smart contracts.

Some would even say the term “industry” is still too generous.

The entire crypto asset market cap is still smaller than NVIDIA’s. Next time you’re thinking about selling your crypto to BlackRock, read the last sentence again. Having said that, gone were the days when crypto was considered a career suicide; the days when developers and investors were considered foolish for taking a stab at crypto.

Your families might still ask if what you’re doing is real though.

So, other than improvements in public acceptance and no longer getting the weird stare when you say you work in crypto (who am I kidding… that still happens) — after more than a decade of development, iteration, and experimentation, what have we achieved?

Turns out, there's a lot!

• Stablecoin settlement volume hit $10 trillion, around Visa’s level

• More than $100B of crypto assets are staked

• Bitcoin ETFs hit $10B in AUM, fastest than any US ETF in history

Sigh. Okay, to understand why the achievements above are amazing even though we still don’t have any mainstream consumer app, we need to realize what crypto is.

• Is it a new asset class?

• Is it a new form of pseudo-equity?

• Is it a new form of money or commodity?

• Is it a movement?

• Is it an ideology rooted in libertarianism?

After being in the space for 7+ years, my definition of crypto is simple:

Velocity of Capital

I know what you’re thinking. Is this another VC think-piece bullshit that we have to endure because the prices are down? Well… trust your instinct ;)

Moving on…

In the next 50 years, there are only two things that will remain true.

1. The world becoming more digital

2. The world becoming more volatile

I don’t care if you’re a techno-optimist or a Luddite.

Our world is going in a direction no one has ever seen before. Historians, aka another word for macro fund managers, might try to draw comparisons with the past, looking for patterns that can be used to analyze the current state of the world.

While there might be some benefits in studying the past, the world and our society have never faced such a rapid pace of technological innovation. In the past 100 years, we’ve created innovations that resulted in exponential progress compared to the 1500-1900.

And we’re not slowing down.

Think about it. There used to be more time for our parents and grandparents to adjust to every technology cycle. Mobile phones had some differences but all of them more or less did the same thing until the advent of the internet.

Since then, everything has become much more exponential. In 2015, the term “influencers” was relatively new. In 2017, we had the first crypto ICO bubble. In 2020 we had COVID & mRNA vaccines. In late 2022 we had ChatGPT. A college kid who graduated in 2019 has never seen technological innovation as rapid as the past five years.

Fast forward to 2024, we are having thriving discussions around nuclear energy, biotechnology, and space/military technology. All this is not even considering AI girlfriends. Yes, we shall not underestimate what will be the most impactful innovation to human society (but that’s for another post).

On the volatility side, we have to give some credit to the macro fund managers. When 75% of the existing USD in circulation was only printed in the past four years, something something will eventually break.

We also have, for the first time ever, a generation that won’t be doing better than their parents.

Why are the two charts above crucial? Because they signify the exacerbating inequality in our world that will eventually lead to volatility.

Massive wealth inequality caused by bad policy decisions and the maintenance of social constructs that don’t provide hope to the younger generations will inevitably result in societal upheaval, causing our world to become much more volatile.

So why are we here?

Done right, crypto is a tool to decentralize systems.

Many facets of our world, including money, power dynamics, and other social constructs, operate as systems. Currently, these systems are increasingly digitized and volatile. To forestall chaos and maintain stability, there must be a method for society to effectively coordinate its energies, pulling the pendulum back from the brink of collapse.

Done right, I believe that crypto is the right tool to achieve this.

This is because crypto increases the velocity of capital. Crypto makes it easier for any entity in the world to transact value with one another, reducing friction via its permissionless nature. And at the end of the day, capital is just a means to coordinate how energy is being directed. From funding new initiatives to creating incentives, our whole world runs on how capital is allocated.

In essence, our whole world is just mechanism design.

This is why crypto is often seen as an incredibly intriguing and controversial industry. It has the potential to disrupt the existing systems because of its permissionless and decentralize nature. It is the best tool to coordinate capital (hence energy) in an increasingly digital and volatile world where power and wealth inequalities continue to exacerbate. A tool for every person to truly own one’s capital, digital footprint, and ultimately, one’s energy.

Stay pensive, act pragmatically,

Marco M.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.