The chaotic landscape and stagnating innovation in the crypto world raise a pressing question: Are we genuinely progressing toward an ideal future? The preface of The Protocol Revolution and DigiLaw Engineering offers a systematic perspective, exploring the essence of the crypto world, its developmental bottlenecks, and the infinite possibilities for future construction, providing crucial insights into the true nature of this new frontier.
The Crypto Paradox: Intended Goodness, Persistent Malice
Why is malice so pervasive and enduring in the crypto realm?
Despite more than a decade of development, the issues of chaos and disorder remain acute. Many attribute this to the notion that “any emerging financial market will encounter various problems.” However, beneath this explanation lies a paradox I refer to as the “crypto paradox”: the initial vision of the crypto world was to create a new system using blockchain technology and decentralized principles that would evolve from “Don’t be evil” to “Can’t be evil.”
Instead, we find ourselves ensnared in the absurdity of rampant wrongdoing. This begs the question: Is there something uniquely problematic about malice in the crypto world today?
Extreme rhetoric often attracts followers because it simplifies complexity and strengthens emotional resonance, drowning out rational voices in a cacophony of popular opinion. To better understand this “crypto paradox,” we must delve into the interconnected causes behind it.
Information Barriers and Fog
In analyzing these causes, we discover that cognitive dissonance and behavioral blind obedience stem from information barriers and fog.
For bystanders, the transformative changes occurring in the crypto world are largely unknown. They hear occasional warnings about its dangers but refuse to accept objective reports, instead constructing a solid “information barrier” built on stereotypes.
For participants in the crypto space, obtaining authentic and valuable information is also challenging. While the internet has granted unprecedented access to information, it has also resulted in fragmentation, redundancy, and noise.
In the emerging field of crypto, myriad opinions and theories proliferate, yet truly deep and forward-thinking insights remain scarce. Moreover, the market is awash with both true and false information, exacerbating the chaos. Veteran participants understand that only a fraction of crypto projects and information holds real value, leaving the vast majority ensnared in an “information fog,” unable to gain a clear, comprehensive understanding and thus prone to blind compliance.
Scams, Speculation, and an Open Casino
Simultaneously, this information barrier and fog are exacerbated by rampant scams and speculation.
Some unscrupulous actors in the crypto market exploit participants’ greed, leveraging information asymmetry to set up numerous seemingly flawless scams and Ponzi schemes in this “open casino.” They inundate the market with carefully packaged distorted information, further thickening the fog and facilitating future wrongdoing.
The crypto ecosystem seems trapped in a vicious cycle. Importantly, fraud and scams are unequivocally evil; they should not exist. However, I do not wish to dismiss speculation entirely. As Matt Huang stated, “The speculative frenzy around cryptocurrencies can attract settlers, accelerating the infrastructure needed for the evolution of a prosperous crypto civilization.”
Speculation provides the necessary funding, talent, infrastructure, and academic research for the crypto world, paralleling historical technological transformations that often came with asset bubbles. Yet, when driven by “greed” or obscured by the murky realities of projects, speculation can disrupt market order, regress the industry, and propel the crypto realm toward becoming a “breeding ground for malice.”
The Dark Side of Token Abuse in Centralized Projects
The proliferation of scams and speculation essentially arises from token misuse within centralized projects.
Tokens are a double-edged sword; they can foster comprehensive value creation in decentralized projects. However, many project teams treat the crypto space as a “decentralized theater.” While they don the mask of “decentralization,” they operate in a highly centralized manner behind the scenes.
Once tokens are issued, it signifies that the crypto protocol and project are entangled with public interests, with the potential for exploitation through information asymmetry—ideally, they should be regulated like traditional stocks.
Yet, these teams claim that their projects are “decentralized” and should not be subject to government oversight, but rather community regulation. Unfortunately, current communities lack the necessary technical know-how and methodologies to enact effective oversight.
This “regulatory gap” allows certain centralized project teams to exploit token issuance from the outset, amplifying the space for wrongdoing while attracting the uninformed or speculative individuals with tales of decentralization.
Technological and Mechanistic Challenges
The unregulated overissuance of tokens by centralized projects is the root cause of malice in the crypto world.
This issue arises from at least two aspects: “technology” and “mechanism.” From a technical standpoint, the crypto world has yet to transcend the limitations of the “impossible triangle,” preventing the creation of cryptocurrencies or blockchain systems that achieve security, decentralization, and scalability simultaneously.
Mechanistically, on one hand, flawed mechanisms provide opportunities for human malice, while on the other, the current ecosystem’s complexity means we lack the research capabilities and talent necessary to support the construction of a “skyscraper.” Many projects claim they aim to build “decentralized automated skyscrapers,” but most are simply centralized projects that superficially appear decentralized before collapsing.
Only established smart contract protocols (like MakerDAO and AAVE) remain steadfast amid market turmoil due to their decentralized value creation and robust yet simple mechanisms. I do not advocate for a singular focus on “decentralization”; rather, decentralization is a means to an end. Without this premise and with inadequate regulation, tokens can magnify the evils stemming from centralization, posing a significant challenge that the crypto world currently faces.
-
-
-
-
-
-
-
-
