This article is from: Zeus
Compiled by | Odaily Planet Daily (@OdailyChina); Translator | Azuma (@azuma_eth)
In the previous article, I explored how the cryptocurrency industry has gradually deviated from its original vision—overemphasizing infrastructure innovation while neglecting the fundamental monetary attributes necessary for achieving financial sovereignty. This deviation has led to a disconnect between the technological outcomes delivered and sustainable value creation.
However, what I have yet to delve into is the fundamental misjudgment the industry has made regarding which applications are truly worth building, a misjudgment that lies at the core of the current predicament in the crypto space and hints at the direction where real value may emerge.
Illusion of the Application Layer
The narrative of the cryptocurrency industry has gone through several stages, but it has always been underpinned by one vision—creating revolutionary applications that transcend finance. Smart contract platforms tout themselves as the infrastructure for a new digital economy, envisioning that value will flow from the application layer back to the underlying protocols. This narrative has been accelerated by the spread of the "fat protocol theory"—which posits that, unlike the internet era where the TCP/IP protocol had little value while Facebook and Google captured hundreds of billions, blockchain protocols will retain the vast majority of value.
This has formed a specific mindset: Layer 1 public chains will create value by nurturing a diverse application ecosystem, much like the Apple App Store or Microsoft Windows creates value through third-party software. However, the fundamental misconception lies in the fact that the cryptocurrency industry is attempting to impose financialization on scenarios that are neither applicable nor capable of generating real value.
Unlike the internet, which digitizes existing human needs (business, social interaction, entertainment), cryptocurrency attempts to inject financial mechanisms into scenarios that do not need or actively reject financialization. The presumption behind this developmental direction is that all fields, from social media to gaming to identity management, can benefit from being on-chain and financialized.
But the reality is starkly different:
Tokenized social applications have generally failed to achieve mainstream adoption, with user participation primarily relying on token incentives rather than product value;
Gaming applications continue to face resistance from traditional gaming communities, with players believing that financial mechanisms detract from rather than enhance the gaming experience;
Identity and reputation systems involving token economics have consistently failed to demonstrate significant advantages over traditional solutions.
These issues cannot simply be explained away with "we are still in the early stages." They reveal a deeper logic—the essence of finance is as a tool for resource allocation, not an ultimate goal. Financializing social interactions or entertainment activities fundamentally misunderstands the core function of finance in society.
The Essential Difference from the Game Item Market
It is important to clarify that markets like the CS:GO skin market or in-game purchase systems in popular games may seem to contradict the previous points, but they actually have essential differences.
These markets are essentially just optional decorative or collectible trading ecosystems peripheral to the game, rather than a financialized transformation of the core gameplay. They are more akin to peripheral merchandise or souvenir markets and do not change the fundamental operational logic of the game.
When crypto games attempt to financialize core gameplay mechanics—making playing games directly equivalent to making money—they fundamentally alter the player experience, often destroying the most basic enjoyment of the game. The key issue is not whether a market can be built around the game, but that transforming gaming behavior itself into a financial activity distorts its essence.
The Essential Difference Between Blockchain Technology and "De-trust"
A core concept often confused in cryptocurrency discussions is the difference between blockchain technology and the attribute of de-trust, which are by no means synonymous.
Blockchain technology: A set of technical tools for creating distributed, irreversible consensus ledgers;
De-trust attribute: Refers specifically to the ability to execute transactions without relying on third-party intermediaries.
De-trust requires a clear cost— including efficiency loss, system complexity, and resource consumption. This cost must be reasonably compensated, and this situation only exists in specific domains.
Take Dubai's use of distributed ledger technology for property registration as an example: they primarily leverage the efficiency and transparency advantages of the technology, rather than de-trust. The land management bureau remains the authoritative center, with blockchain serving merely as a more efficient database. This distinction is crucial as it reveals the true value of such systems.
The core conclusion is that de-trust has practical value only in a few areas. From property registration to identity verification to supply chain management, the vast majority of scenarios still fundamentally rely on authoritative institutions in the real world for final adjudication or verification. Migrating the ledger to blockchain does not change this essence—it merely replaces the technical tools for managing records.
Cost-Benefit Analysis
This necessitates that each platform conduct a simple cost-benefit analysis.
Will the platform genuinely benefit from de-trust?
Will this benefit outweigh the cost losses incurred in achieving de-trust?
For most non-financial applications, at least one of these questions will have a negative answer—either they do not truly need de-trust (because they still require external authoritative guarantees), or the benefits do not cover the costs.
This explains why institutional adoption of blockchain technology primarily focuses on efficiency improvements rather than de-trust. When traditional financial institutions tokenize assets on Ethereum (a trend that is growing), they are leveraging the operational advantages of the blockchain network and new market entry while maintaining traditional trust models. Here, blockchain serves as improved infrastructure rather than a trust replacement mechanism.
From an investment perspective, this creates a paradox. The most valuable part of blockchain (the technology itself) can be widely adopted but may not necessarily create value for specific public chains or tokens. Traditional institutions can build private chains or use public chains as infrastructure while firmly controlling the most core value layer—asset issuance rights and monetary policy.
Industry Adaptive Evolution
As this reality becomes increasingly clear, we are witnessing a natural adaptation process unfold:
Technological adoption bypasses token economics: Traditional institutions only adopt blockchain technology, avoiding speculative token systems, using it as an upgraded "pipeline" for existing financial activities;
Efficiency takes precedence over revolution: The focus shifts from disrupting existing systems to incremental efficiency improvements;
Value migration: Value primarily flows to specific applications with clear utility rather than underlying infrastructure tokens;
Narrative evolution: The industry readjusts the narrative of value creation to match technological advancements.
This is, in fact, a good thing. Why should activity facilitators siphon off all value from value creators? If the predictions of the "fat protocol theory" were accurate, with the main value captured by TCP/IP rather than the applications built on it, the internet would look very different (almost certainly worse). The industry has not failed—it has simply finally faced reality. The technology itself is valuable and may continue to evolve and integrate with existing systems, but the distribution of value within the ecosystem may be starkly different from what early narratives suggested.
Root of the Error: The Forgotten Original Intention
To understand how we arrived at today, we must return to the origins of cryptocurrency. Bitcoin did not initially emerge as a universal computing platform or the basis for the tokenization of everything; its mission was very clear—to respond to the 2008 financial crisis and the failure of centralized monetary policy as a monetary system.
The core idea of Bitcoin has never been "everything can be on-chain," but rather "money should not rely on trusted intermediaries."
As the industry developed, this original mission gradually faded and was ultimately abandoned by most projects. While projects like Ethereum expanded the technical capabilities of blockchain, they simultaneously blurred its core positioning. This has led to a bizarre split in the ecosystem.
Bitcoin still focuses on its monetary positioning but lacks programmability, unable to achieve functions beyond basic transfers;
Smart contract platforms offer programmability but abandon monetary innovation, shifting towards the "everything on-chain" route;
This differentiation may be the most serious misstep in the cryptocurrency industry. The industry did not build more complex functions on the foundation of Bitcoin's monetary innovation but instead turned to financializing everything—this inversion of priorities misjudged the problem and chose the wrong solution.
The Path Forward: Returning to the Essence of Money
In my view, the direction for the industry moving forward lies in reuniting the significantly enhanced technical capabilities of blockchain with its original monetary mission. Not as a universal solution to all problems, but focusing on creating better money.
The reasons why money is particularly suited for blockchain include:
De-trust is crucial—unlike most applications that require external enforcement, money can operate entirely in the digital realm, executing rules solely through code;
Native digital attributes—money does not need to map digital records to physical reality; it can exist natively in a digital environment;
Clear value proposition—removing intermediaries from the monetary system can genuinely enhance efficiency and autonomy;
Natural connection to existing financial applications—the most successful crypto applications (trading, lending, etc.) naturally connect to monetary innovation;
Most importantly, money is essentially an infrastructure layer that does not require deep interaction. This is precisely where the cryptocurrency industry has gone astray—rather than creating money that can seamlessly integrate with existing economic activities, the industry has attempted to rebuild all economic activities around blockchain.
The power of traditional money lies precisely in this "tool layer" characteristic. Businesses accept dollars without needing to understand the Federal Reserve, exporters manage exchange rate risks without having to reconstruct their entire business, and individuals store value without needing to become monetary theorists. Money facilitates economic activity without dominating it.
On-chain money should operate similarly—providing simple interfaces for off-chain businesses, just as using digital dollars does not require understanding the banking system. Businesses, institutions, and individuals can remain entirely off-chain, using blockchain money only for specific advantages, just as users currently utilize traditional banking systems without needing to become part of them.
Rather than constructing a vague concept of "Web3" that attempts to financialize everything, the industry should focus on building a better monetary system—not just speculative assets or inflation hedges, but a complete monetary mechanism adaptable to different market conditions.
The changing landscape of global currency further underscores the urgency of this direction. The inherent fragility of the current system and geopolitical tensions have created a genuine demand for neutral alternatives.
The tragedy of the current ecosystem is not only resource misallocation but also missed opportunities. Incremental improvements to financial infrastructure are indeed valuable, but they pale in comparison to the transformative potential of addressing the essence of monetary issues.
The next stage of evolution for cryptocurrency may not lie in continuing to expand boundaries but in returning to and realizing its initial mission—not as a universal solution, but as a reliable foundational monetary infrastructure that allows other constructions to operate without delving into their operational principles.
This is the profound innovation that cryptocurrency originally promised—not to financialize everything, but to create a currency worthy of being the invisible infrastructure of the global economy. A currency that can operate seamlessly across borders and institutions while maintaining sovereignty and stability. A foundational setup that empowers rather than dominates, serves rather than restricts, and does not interfere with the human activities that give it meaning during its evolutionary process.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
