For the cryptocurrency industry to achieve true growth and influence, it must accept the formalization of its regulatory status and the various consequences that come with it.
The foundation of public blockchains was laid by Cypherpunks. Although the cryptocurrency 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, the sector also faces a core issue: in the absence of a regulatory framework that supports innovation and acknowledges blockchain as an administrative infrastructure with unique features, crypto entrepreneurs are forced to face a tough choice—whether to adhere to a purist ideology, making the structure and operation of projects more complex; or to compromise on original ideals in exchange for regulatory recognition and a more traditional mainstream path to success.
I refer to this dilemma as the 'Cryptopreneur’s Dilemma.'
Since the birth of blockchain, it has carried a grand vision: to achieve the separation of money and state, to establish a censorship-resistant global payment and coordination network, to develop software services without single points of failure, and to create entirely new forms of digital organization and governance. Driving such revolutionary change requires a special historical context.
For the cryptocurrency industry, this context is shaped by the aftermath of the global financial crisis and the evolution of Big Tech data and business models. At the same time, the global proliferation of digital technologies and built-in token incentive mechanisms provided near-ideal conditions for the rapid development of the early cryptocurrency ecosystem. Since then, as social capital and financial capital have accumulated within individual blockchain networks and the industry as a whole, the cryptocurrency industry has gradually become an undeniable force, especially evident in the 2024 U.S. presidential election.
However, driving revolutionary change requires not only courage but also a degree of 'sociological naivety.' Any attempt to disrupt social structures, especially those based on law, often has a far higher likelihood of failure than of success.
The cryptocurrency industry has indeed tapped into public discontent 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 attempting to bypass regulatory requirements of their jurisdictions (be it the operators of the underlying infrastructure or the transactional parties) always face the risk of being intervened by local law enforcement.
For the cryptocurrency industry to achieve true growth and influence, it must accept the formalization of its regulatory status and the various 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 precisely what we are seeing in practice. From taxing crypto-related activities, classifying tokenized assets, to enforcing anti-money laundering and counter-terrorist financing (AML/CTF) rules, and clarifying legal responsibilities in DAO governance, the cryptocurrency industry is gradually integrating into the existing regulatory system centered around national jurisdictions.
However, what is even more noteworthy is that this process has also spawned new case law and customized regulatory frameworks—these frameworks have become key battlegrounds for defending the original values of the cryptocurrency industry, preventing it from being overlooked or destroyed (whether intentionally or unintentionally) in ideological and political games. The existence of this 'Cryptopreneur’s Dilemma' is because, like any innovation activity with far-reaching implications, the process of legitimization is slow and controversial. For the cryptocurrency industry, this process is particularly challenging because the actions of some malicious opportunists have led to misunderstandings of the industry's image and unnecessary collateral damage.
Another notable trend is the increasing integration of blockchain with traditional business and financial systems. For those who view the cryptocurrency 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. Conversely, for others, this integration is precisely a marker 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 base will continue to expand and diversify. While this trend attracts the attention of traditional enterprises, it may also further exacerbate the ambiguity of the cryptocurrency industry narrative, especially when traditional institutions attempt to control ostensibly neutral infrastructures. The risk of 'institutional capture' will increase proportionally with the popularity of the cryptocurrency industry.
So, as public blockchains enter the next stage of their adoption curve, how should the 'Cryptopreneur’s Dilemma' be repositioned?
On the one hand, the mainstream success of the cryptocurrency industry seems to rely more on deep integration with existing systems rather than clinging to an idealized, fully decentralized vision. Accepting the fact that most 'crypto projects' may ultimately be no different from traditional businesses or open-source software initiatives, or that most blockchain users are unlikely to fully embrace the ideals of Cypherpunks, even using them as the 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 the 'performance of decentralization' is almost meaningless, and it is perfectly acceptable for centralized enterprises to utilize and operate public blockchains. Thus, once the regulatory status of the cryptocurrency industry is clarified, this dilemma may no longer be important for most entrepreneurs.
However, it would be incorrect to see this as marking the end of the original vision of the cryptocurrency 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 robust computing and information management services is more urgent than ever.
As an innovative platform, blockchain can provide alternatives for traditional systems that are susceptible to corruption, mass surveillance, and single points of failure. Only when enough entrepreneurs and supporters persist on the difficult path of building truly decentralized, privacy-protecting, and anti-control systems can blockchain continue to exist. Although the commercial success of the cryptocurrency industry may no longer depend on these ideals, its long-term social influence undoubtedly still relies on them.