A love letter to crypto

Why we've been here for 5 years and plan to stick around much longer

We've been in the crypto space for almost 5 years now. It felt like a few decades given the technological progress, but also in terms of how the perception of crypto has changed. From certain parts of society, crypto may still look like a bunch of hype for dubious internet money, but we can assure you something much more interesting than that is happening too. We love blockchains and cryptocurrency and we plan to stick around for much longer - this is why we wrote this piece. We wanted to share some of the aspects of the paradigm shift to a decentralized internet we are most excited about. We hope that it conveys some of the tantalizing potential we see emerging. Maybe our reflections can even act as a bridge for others to start making sense of crypto. 

Open innovation 

Blockchains and the emerging field of crypto-economics are genuinely a new paradigm (in Kuhn's sense). The crypto space operates according to different rules, which is why the IBMs and PWCs of this world are in vain trying to get a piece of the action. They don't understand that we build out in the open, on shared public infrastructure that can be freely used. The result is an absolutely mad speed of innovation since all players can immediately copy and remix what others have built. The open-source aspect of crypto is not just a cultural quirk, but it is necessitated by the trust assurances of blockchains: only if people can check the code, they can trust applications with their funds. From the early days, competing teams have learned from each other to make blockchains more secure and scalable, and we now see a frenzy of innovation in the decentralized finance ("DeFi") space, where "money legos" are mixed and matched into ever more sophisticated financial applications. The fundamental shift is from zero-sum competition in the legacy paradigm to positive-sum coopetition, which produces much more innovation faster. To us, this seems like the core of the Ethereum ethos, where coopetition through synergistic composability is most prevalent now. 

Global & permission-less 

There is no central hub in crypto. In contrast to legacy industries from tech to finance that cluster around a specific geographic area, crypto is decentralized not just in terms of software architecture, but also geographically. The best teams in crypto can be found not just in Silicon Valley, but Singapore, France, India, Switzerland, and Finland, among many others. Many of those leading teams have collaborators from all over the world in a remote-first environment. The boundary between the team and its community, users, and investors is much more blurry in crypto. For example, the Uniswap airdrop a large portion of DeFi users received has been a pleasant surprise to a life-changing financial event for many users of Uniswap all over the world. External parties can be incentivised to varying degrees with blockchain-based assets and often contribute significantly without any conventional contractual relationship. On top of that, some of the most successful crypto projects are led by anonymous founders and/or community-led, such as YFI, Badger, and Sushi. All of this is possible again because of the new paradigm that is crypto: Anonymous founders can be trusted because the code is open-source (and especially if their tokens are vested), and they can spin up a project more quickly because of open-source and composability. Project communities are much more engaged because they have a stake in the projects' success through holding and earning tokens (imagine if all Uber drivers got Uber shares from early on). And lastly, teams can be global because both capital and talent is global in crypto. Most teams could not care less about national boundaries, where their teammates and investors are living (except when it comes to excluding certain countries with overzealous financial authorities, of course).

Financial opportunity

Now before we're going to get ourselves accused of hypocrisy, let us admit that the financial opportunity was clearly an important factor to peak our interest in the crypto space. Considering the multiples (not percentages) of ROI generated throughout each bull cycle, it's not hyperbolic to say that crypto is the financial opportunity of a lifetime. What we find most exciting is that this opportunity is open to anyone. Normally, only a select-class of VCs and professional investors get to participate in groundbreaking technology early. With crypto, anyone on the internet can get a stake in emerging blockchains or applications by buying (or earning) the respective asset. Most delightfully, the majority of legacy investors still don't understand crypto and are stuck in their old paradigm. This is why most gains so far have arguably been made by savvy retail investors.

Making the internet weird again

Last but not least, we just can't get enough of the weirdness of crypto, especially when contrasted with the nostalgic kitsch and commoditised production we call “culture” in late capitalism. Crypto is raw, liminal, and infinitely creative. Its politics is crypto-anarchist and its aesthetics neo-cyberpunk. From meme-coins like Dogecoin, Cryptopunk collectables, to the world's most valuable socks, you are guaranteed to find the weirdest things people spend money on in crypto. We can't get enough of the playful innovation that produced stuff like Neolastics,  Pool together, and Dark Forest. 

We hoped to convey our enthusiasm for the genuine innovation and creativity we see in crypto in this piece, as well as some of the complex motivations involved: it’s possible to both “be here for the tech” and wanting to become financially independent, and doing so with integrity. Like in life, it is important to hold multiple perspectives in investing, to keep growing and learning. 

Things have changed drastically since crypto was still very much at the fringe of popular culture in 2016 to an acknowledged force by the vanguard of traditional finance to culture now. However, we think we’re still very much at the beginning of the emerging internet of value. As the digital is coming for money, it is important to build on the foundations of open, public blockchains that provide a neutral playing ground and unprecedented equal access. We believe that crypto is our chance to finally build the internet we deserve.