Narrative, Culture, Regulation — The State of Crypto in 2018.

November 9, 2018
crypto 2018

Like a lot of people in crypto, I came for the rising high prices, but ended up staying for the technology. But as time has gone on, I’ve increasingly realised how much of a unique moment in time we are in right now.

Startup Land

Although I was born in 1998 and missed the whole internet bust and boom, from what I’ve read, today’s state of crypto feels like startups a decade ago. Starting one was unsexy, messy and unpredictable. Bull market aside, crypto feels exactly like that right now. There isn’t any appeal when most people are down 80–90% their portfolio, use cases are uncertain and the probability of things changing is a massive question mark.

On the flip side, every regular startup can determine a market size, define their customer, get traction and grow through an accelerator with followed on financing. Don’t get me wrong, that’s still extremely hard. Although crypto is adding a whole new dimension of complications. Who is your customer? Do you have any traction? What’s the market size? The answers to these questions for most crypto projects is uncertain, and speculative at best.


All the subfields in crypto are highly experimental and require an entirely new way of looking at things. Starting from Bitcoin, it requires you to shed your existing beliefs of money. As you go deeper into the rabbit hole you find different niches of problems, token curated registries, economic game theory, scaling research, zero-knowledge proofs, layer 2 architecture/protocols. The list goes on and on. What’s key is that none of these fields has experts. All they have is extremely passionate people that have been working on these things for a maximum of 2 years (usually 6 months to a year). There’s still an explosion of fields and jumping into something even newer isn’t hard, just depends on what level of the stack you want to play on.


Unfortunately, with crypto, you’re opening yourself to regulatory risk. There’s no way to be 100% safe except for not jumping in. 95%+ of ICOs in 2017 were securities, and now the SEC is cracking down. However, that’s not a complete view. A lot of coins which easily fail the Howey test aren’t being investigated since they’re legitimate projects and governments making an example of them would be wrong. The hard bit is what defines a good project when statistically most of them are wrong. To further add fuel to the fire, many investors started pushing founders to register their coin as security tokens to ensure compliant ICOs. What everyone is slowly realising is that spending $500k-$1M for tokenized equity for a startup isn’t worth it. You’re better off just selling equity the old way. You also now have significant disclosure overhead since you’re now effectively a publicly traded company but only 10 people. Security tokens have their place, but more likely an improvement in the existing financial system for fractional assets and cheaper/easier IPOs for mega private corporations (global liquidity). Note: the whole security token hype was strong for ~8 months before it died down.


Like many early-stage industries, the narrative of the future is what everyone is betting on. From the outside, you might think the narrative of crypto is that Bitcoin will be used as money. While true, is very simplistic. At this point, crypto has 3 narratives and different groups subscribe to different ones (or a combination of a few).

  1. Sound money. Fiat backed currencies are inherently worthless and are bound to collapse. Bitcoin, on the other hand, has a fixed supply and will be a store of value.
  2. Open finance. The existing financial system is inefficient and isn’t available to everyone. A platform such as Etherum will create a shadow financial economy which will have the infrastructure in the existing economy on the Blockchain. Examples include loans, derivates, index funds and exchanges.
  3. Web3/Privacy. Users care about controlling their data and having self-sovereignty. This is where identity protocols, privacy coins and dApps come into play.

The cruel answer is no one knows which one is right or if any are right. Everyone has their bets placed on certain narratives and takes action accordingly. A mismatch in narrative between an employee, customer or investor usually leads to incompatibility.


So why carry on? Because looking out a decade into the future the implications of what’s going on is tremendous. We’re quite literally disrupting banks, one of the largest middle men in today’s world. Not only are we disrupting, but also creating opportunities for the unbanked to have cryptographically backed banking systems. The idea behind crypto is like a virus. Once you’re infected you want to share it with everyone around you. Every bull cycle we have a wave of smart people who get attracted to the industry and end up building the next generation of infrastructure. On the surface most people think crypto = ICO = scam. However it is for this reason I personally believe crypto is the most game changing yet misunderstood technology of our time.


In the past month I’ve been fortunate to travel to San Francisco Blockchain Week and Devcon in Prague. Both events were my first time getting plugged into the global community coming from Sydney. What you quickly realise it’s actually a really small community that starts feeling like a family after some time. Everyone has the same values and is dedicating their life to pushing this movement forward. The lingo, memes and personas all create a very unique subculture.

Why write all this? More so to capture this time in history and reflect on the state of things in a few years from now. Getting into crypto is a multi decade career, you have to be willing and able to survive the ups and downs.

I really hope you found this useful and would love to hear any opposing opinions.

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