Author: Mario Laul
Compiled by: Shenchao TechFlow
The foundation of public blockchains is laid by cypherpunks. Although the crypto industry was destined to encompass diverse ideas and practices from the beginning, core principles such as decentralization, open-source software, cryptographic security, privacy protection, and self-sovereignty have always been the cornerstones of its most disruptive achievements.
However, this field also faces a core issue: in the absence of a regulatory framework that supports innovation and recognizes blockchain as an administrative infrastructure with unique functions, crypto entrepreneurs are forced to make a difficult choice—whether to adhere to pure ideals, thus making the structure and operation of the project more complex; or to compromise on the original ideals in exchange for regulatory recognition and a more traditional mainstream path to success.
I call this dilemma the 'Cryptopreneur’s Dilemma'.
Since the inception of blockchain, it has carried a grand vision: to achieve separation of money and state, establish a censorship-resistant global payment and coordination network, develop software services that avoid single points of failure, and create entirely new forms of digital organizations and governance. Driving such revolutionary change requires a special historical context.
For the crypto industry, this background has been shaped by the aftershocks of the global financial crisis and the evolution of data and business models from Big Tech companies. At the same time, the global proliferation of digital technology and the built-in token incentive mechanisms have provided almost ideal conditions for the rapid development of the early ecosystem of the crypto industry. Since then, with the accumulation of social and financial capital within individual blockchain networks and the entire industry, the crypto industry has gradually become a force that cannot be ignored, especially prominent in the 2024 U.S. presidential election.
However, driving revolutionary change requires not only courage but also a certain degree of 'sociological naivety'. Any attempt to disrupt social structures, especially those based on law, often has a much higher likelihood of failure than success.
The crypto industry has indeed captured public dissatisfaction with traditional systems by challenging existing institutions, but this confrontational stance is difficult to reconcile with the goal of building digital platforms that serve global users. Similarly, blockchain transactions that attempt to bypass regulatory requirements of their jurisdiction (whether from operators of underlying infrastructure or trading parties) always face the risk of intervention from local law enforcement.
If the crypto industry wants to achieve real growth and influence, it must accept the formalization of its regulatory status and the consequences that come with it. As a famous saying goes, 'You may not be interested in the state, but the state is certainly interested in you.'
Although many aspects are still changing, this is exactly what we see in practice. From taxing crypto-related activities, classifying tokenized assets, to enforcing anti-money laundering and counter-terrorism financing (AML/CTF) rules, and clarifying legal responsibilities in DAO governance, the crypto industry is gradually integrating into the existing regulatory framework centered around national jurisdictions.
However, what is more noteworthy is that this process has also given rise to new case law and customized regulatory frameworks—these frameworks have become the key battleground for defending the original values of the crypto industry, preventing them from being overlooked or destroyed in ideological and political struggles (whether intentionally or unintentionally). The existence of this 'Cryptopreneur's Dilemma' is because, like any innovation with far-reaching implications, its process of legitimization is both slow and controversial. For the crypto industry, this process is particularly challenging, as the actions of some malicious opportunists have led to misunderstandings of the industry's image and unnecessary collateral damage.
Another noteworthy trend is the increasing integration of blockchain with traditional business and financial systems. For those who see the crypto industry as a parallel system aimed at replacing traditional institutions, this integration blurs the lines between the two, potentially triggering cognitive dissonance and internal conflict. For others, this integration is precisely a sign of success and the only sustainable path for blockchain to become a systemically important infrastructure. As the industry matures and risks decrease, its practitioners, operators, and user groups will continue to expand and diversify. While this trend has attracted the attention of traditional enterprises, it may also further exacerbate the ambiguity of the crypto industry's narrative, especially when traditional institutions attempt to control seemingly neutral infrastructures. The risk of 'institutional capture' will increase proportionally with the popularization of the crypto industry.
So, as public blockchains enter the next stage of their adoption curve, how should the 'Cryptopreneur's Dilemma' be repositioned?
On one hand, the success of the crypto industry’s mainstreaming seems to rely more on deep integration with existing systems than on a commitment to some idealized, fully decentralized vision. Accepting the fact that most 'crypto projects' may ultimately be no different from traditional enterprises or open-source software programs, or that most blockchain users are unlikely to fully embrace the cypherpunk ethos, or even use it as a primary basis for consumption decisions, is not unacceptable. As long as these systems can maintain openness and verifiability, and are more resilient than existing alternatives, then 'decentralized performance' is almost meaningless, and there is no harm in centralized enterprises utilizing and operating public blockchains. Therefore, once the regulatory status of the crypto industry is clarified, this dilemma may no longer be important for most entrepreneurs.
However, it is incorrect to view this as the end of the original vision of the crypto industry. Technologies such as autonomous robots and artificial intelligence (AI) are injecting new and profound transformative power into the digital revolution, and the demand for powerful computing and information management services is more urgent than ever.
As an innovative platform, blockchain can provide alternatives to traditional systems that are vulnerable to corruption, mass surveillance, and single points of failure. Blockchain can only persist when enough entrepreneurs and supporters are committed to the difficult path of building truly decentralized, privacy-preserving, and control-resistant systems. Although the commercial success of the crypto industry may no longer depend on these ideals, its long-term social influence undoubtedly still relies on them.