I am more bullish on the prospects for cryptocurrencies than ever before.
I've been working on building @circle for the past 11 years and have never felt more confident than I do now.
I also think that most people have an extremely narrow and limited understanding of the current situation. This optimism is also heartening.
This article will explain why I am so optimistic.
My perspective is based on deep observation of the adoption cycles of Internet technologies over the past 35 years or so. We have witnessed the continuous evolution of open networks, open protocols, and open software, with Internet infrastructure layered on top of each other, increasing its utility to society and the economy. Each wave has transformed major industries, increased utility, disrupted or changed unit economics, and opened up entirely new possibilities.
Open IP’s collective contribution to this ongoing internet revolution is actually accelerating, and cryptocurrencies appear to be on the cusp of driving society and the economy forward in incredibly powerful new ways.
When Sean and I were thinking about this space over 11 years ago, it was clear that cryptocurrencies represented the next logical layer to the internet infrastructure, which had enabled frictionless, nearly free data transfer and the ability to seamlessly connect and deploy software and hardware across a global network, but was clearly struggling with its own success and load.
The Internet lacks a trust layer, which limits the utility it provides. The inability to access fully trusted data, transactions, or computations leads to increased reliance on hyper-centralized entities (corporations and governments).
At the same time, the role of the Internet in society is growing rapidly, and its potential to play an even greater role in social and economic organization is clear.
It was at this time that Bitcoin burst onto the scene and numerous technologists began to think deeply about how to expand the basics of cryptocurrency to provide a more general internet infrastructure that could become the foundation of society and the economy. Digital tokens issued on public blockchains and mediated by smart contracts could unleash a trusted environment on a global scale that could enable nearly all components of society and the economy to become internet-native.
That’s what drew me into this space; it was clear to me at that time that this was going to unfold, that these new decentralized internet computers were going to scale and ultimately usher in a wave of change far beyond what we’ve seen from the information and communications internet.
In 2013, these ideas were considered crazy. Anything to do with Bitcoin or cryptocurrencies was considered highly fringe, possibly even illegal, and for most technologists it was a largely uninteresting technological development. At the time, the technology was extremely limited, slow, expensive, and complicated to operate.
The fiduciary institutions – banks, accounting and auditing firms, insurance companies, regulators – are extremely hostile and fearful of anything to do with this space.
The main focus of the media was on Dark Web markets, Silk Road, and the Winklevoss twins’ Bitcoin purchases.
But if you really pay attention to what the mostly young and creative builders are thinking and doing, you can clearly see a bigger vision about to unfold, even if the exact time frame is unclear.
For those of us who have been building and working in this space since 2012 (and many earlier!), it’s extraordinary where we are right now. And, as I always say, we are really only in the very early stages of the world’s adoption of crypto, which makes me very optimistic today given the progress we’ve made over the past decade.
How far have we come? Here is a non-exhaustive list of achievements and technological advances.
Public blockchain infrastructure has evolved to its third generation, providing a global-scale network computer that can handle large-scale applications with trusted data, transactions, and computations.
There is a large, thriving, and growing community of competition and innovation across dozens of major blockchain network ecosystems around the world that are continually improving and innovating on the underlying technologies of these networks, including data availability, computation, security, privacy, transaction throughput, and more.
We are in the early broadband phase of blockchain networks. Can you guess what’s going to happen next?
We have witnessed breakthroughs in security, privacy, and scalability based on ZK technology and existing FHE. It is foreseeable that a world with encrypted computing as the core application is coming.
Tens of thousands of startups around the world are building on this infrastructure.
Digital assets have become a recognized component of the emerging global financial system, and almost all major countries have established clear regulations for the issuance, use and trading of digital assets.
Bitcoin itself has become one of the world's largest and most important alternative investment assets.
The world’s largest asset managers are offering products and services based on blockchain technology and promoting investments in the underlying digital assets.
Cryptocurrency has become a global political issue as its importance to national competitiveness becomes increasingly apparent. Governments are racing to address the issue and ensure innovation is both responsible and promoted.
We’re seeing product UX unlock consumer-level usage in ways never before possible, giving us a clearer view of how this will unfold for billions of users in the coming years.
As the advantages of public chains and stablecoins gradually emerge, most of the world's large payment companies are actively adopting this technology and exploring how to expand its scope of application.
Stablecoins have exploded in size and usage, becoming the most killer application of cryptocurrency, unleashing the world’s digital dollar, bringing more people into the future on-chain economy, and beginning to realize the promise of providing banking services to the unbanked, reducing remittance costs, and facilitating more seamless cross-border trade.
Stablecoins are becoming a form of digital currency that is legally recognized and accepted in almost all major jurisdictions. By the end of 2025, stablecoins will account for an increasing share of the "legal electronic money" market.
The infrastructure for building, deploying, and operating blockchain applications has made tremendous progress. Enterprise-grade products and services help users use these networks, and the custody infrastructure is scalable to enable self-custody controlled by the end user, becoming a reliable infrastructure for the world's largest banks and asset managers.
Developer tools, SDKs, and knowledge bases are growing at an accelerated pace, and more and more people are becoming “blockchain-savvy.”
Large consumer-scale companies are launching online applications that connect to public chains and use digital tokens in a variety of use cases.
Governments are investing in blockchain infrastructure, ecosystem development, and passing legislation to incentivize companies to build in their regions.
Every week we see more and more exciting applications of the technology, from payments to social, from gaming to ticketing, and enterprise use cases continue to gain traction.
I could go on, but the scale of this is truly astounding compared to a decade ago. And like the previous waves of open internet infrastructure, this one is growing and getting stronger every day and every week.
As I said before, we are still in the early stages of crypto adoption. This is cause for great optimism.
What will it look like when digital tokens become a globally understood and legally used form of incentives, governance, and record-keeping?
What will it look like when more and more financial and business structures are executed and mediated by smart contracts on public chain infrastructure?
What will it look like when fourth-generation blockchain networks support billions of users and millions of applications?
What will it look like when on-chain organizations gain legal recognition and grow rapidly, competing to organize labor and capital, and consistently outperforming traditional multinational corporations?
What would it look like when political institutions — cities, states, nations, and new cyber-nations — adopted on-chain governance and improved the expression of democratic values in the internet age?
What will it look like when 10% of global economic money is in stablecoins, when credit intermediation shifts from fractional reserve lending to on-chain credit markets built on safer digital cash instruments like stablecoins, and opens up credit and debt markets to do for the long tail of supply and demand what Amazon did to commerce and AdWords did to advertising?
All of this is possible within the next 10 years. Time flies, but when you look back at what has been accomplished and see how it paves the way for our future, it’s hard not to feel extremely optimistic.
