In 2009, Bitcoin burst into the scene. Okay, more like, crept into the scene. Full of promise and the hope of a financial revolution. Within the last 14 years of crypto’s gradual rise, other novel industries like Artificial Intelligence has seen incredible strides in leaps and bounds. Especially recent breakthroughs with OpenAI’s ChatGPT and similar in Generative AI. Most interesting is how quickly AI’s value prop has become immediately obvious to the average user.
14 years since crypto’s introduction, perhaps the biggest question still remains: what is crypto’s peculiar use case, beyond merely an instrument of speculation?
It has been a challenging question to provide a robust enough answer to, because, among several other things; the question assumes an incorrect premise and lacks contextual perspective. We can try to advance a framework for evaluating crypto’s use case by first deconstructing the basis of its purpose.
Let us briefly borrow a parallel with AI again:
One would be remiss to imagine that ChatGPT, as incredible as it is, was simply built from ground up to provide an immediately obvious utility to consumers. Instead of an amazing tool built on years of research, foundational iteration, and an infra layer that paved the way for the reality of consumer innovations like ChatGPT and other Generative AIs.
The same can be said of crypto. If the ideals and promise of crypto is to be believed, then it makes more sense to reckon that crypto’s destiny is best executed as an infrastructure layer.
This would also explain why crypto has struggled to answer the “use case” question. Because from an immediate mainstream consumer’s point of view, there is very little (as far as common pain points go) that crypto can usefully replace for them. If anything, it can even be argued that it introduces extra levels of complexity and forces impractical tradeoffs, in most cases.
Modern email, like Gmail, for example is powered by the breakthrough of certain software infrastructure like TCP, mail protocols like SMTP, IMAP and POP3, mail agents and servers, etc. Emailing apps and services are immediately useful to consumers. But we would not have email without the invention of the underlying infrastructure that powers the application layer that serve consumers!
Crypto has struggled to find use cases because developers in the space have conditioned themselves to think of crypto as an entirely new paradigm, requiring its own peculiar sets of products, as opposed to seeing crypto as, first, an important infrastructural layer for powering existing applications to newer heights and lifting barriers, and then as a medium for creating independent value.
The utility of AI is immediately obvious, because at the consumer level, it is rather easy to see how it is useful and what value it adds. But it is not so for crypto. Because immediately useful consumer innovations require a careful abstraction of technical burden from products.
Crypto will struggle to find special “use cases” for as long as developers try to build for crypto, instead of with crypto. The former forces people to alter their needs and taste, the latter meets people right where they are, offering enhancement and better taste. The future of crypto depends on genuine consumer applications built with consumers and their practical needs in mind, with crypto at the underlying layer.
Without the above mentioned, mass adoption will remain a pipe dream. Crypto will continue to recycle only a very specific type of userbase —those that are interested in crypto beyond their useful consumer needs. While this is not wrong, the delusion is that they expect to attract net new non-crypto native users. Which is unlikely, because, again, the usefulness is not immediately obvious.
Crypto’s core strengths are best utilized at infrastructure level. Builders are guilty of trying to force crypto-native use cases at application level for consumers. An example of this is forcing major adjustments in user behavior for the value-add of on-chain transparency. While transparency might be an incredible value-add, however, for the average consumer, it might not be a requirement.
The problem is crypto builders are focused on creating a new category for themselves in terms of building consumer applications. And sadly, the consumers do not care, because regardless of the shiny new box crypto builders shove themselves into, the determinant of consumer adoption does not change —is this immediately useful to consumers?
Instead of the illusion of building inside a special box, builders should embrace the reality —building in a market with preset categories decided by the “who and what” framework of scoring innovations based on: useful to whom and useful for what? Obviously, the higher the score, the better. Novelty of category is not a pass. There is only so far as the idiosyncratic narratives can go. Soon, the market starts to ask the real questions. Again: useful to whom? Useful for what?
Build real world apps on crypto infra and protocols. Like Jack Dorsey is doing with BlueSky and Nostr. Web3 founders must realize that simply building in crypto does not preclude the rules of business from applying to their products. Like the YC motto says: “build something people want.” Build apps that utilize crypto infra to power real world applications that are immediately useful. Energy? Fintech? Transport? Dating? E-commerce? Enterprise?
Build consumer apps powered by crypto protocols at their core. Useful, real world app clients built on crypto protocols. Crypto, in and of itself should never be a selling point for consumer products anymore than AI, without datasets.
Stop building crypto apps. Build consumer-useful apps.
