Author: Mario Laul
Compiled by: Shenchao TechFlow
The foundation of public blockchains was laid by the Cypherpunks. Although the crypto industry was destined from the beginning to embrace diverse ideas and practices, 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 functionalities, crypto entrepreneurs are confronted with a tough choice—whether to adhere to purist ideals, complicating the structure and operation of their projects; or to compromise on their 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 birth of blockchain, it has carried a grand vision: achieving the separation of money from the state, establishing a censorship-resistant global payment and coordination network, developing software services without single points of failure, and creating entirely new forms of digital organizations and governance. To drive such revolutionary changes, a special historical context is required.
For the crypto industry, this backdrop is shaped by the aftershocks of the global financial crisis and the evolution of Big Tech's data and business models. At the same time, the global proliferation of digital technologies and the built-in token incentive mechanisms have provided nearly ideal conditions for the rapid development of the early crypto ecosystem. Since then, with the accumulation of social capital and financial capital within individual blockchain networks and the industry as a whole, the crypto industry has gradually become a force that cannot be ignored, especially evident in the 2024 U.S. presidential election.
However, driving revolutionary change requires not only courage but also a certain degree of 'sociological naivety.' Any attempts to disrupt social structures, especially those based on law, often have a much higher chance of failure than of success.
The crypto industry has indeed captured the public's dissatisfaction with the traditional system by challenging existing institutions, but this confrontational posture is difficult to reconcile with the goal of building digital platforms that serve global users. Similarly, blockchain transactions attempt to circumvent regulatory requirements from the jurisdiction in which they operate (whether from the operators of the underlying infrastructure or the parties involved), and this narrative always faces the risk of intervention by local law enforcement.
For the crypto 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.'
While many aspects are still changing, this is precisely what we see in practice. From taxing crypto-related activities and 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 key battlegrounds for defending the original values of the crypto industry, avoiding neglect or destruction in ideological and political struggles (whether intentional or unintentional). The existence of this 'Cryptopreneur’s Dilemma' is due to the fact that, like any innovation with far-reaching impacts, its process of legitimization is both slow and controversial. This process is particularly arduous for the crypto industry, 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 view the crypto industry as a parallel system aimed at replacing traditional institutions, this integration blurs the lines between the two, potentially leading to 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 base will also 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 narrative, especially when traditional institutions attempt to control seemingly neutral infrastructures. The risk of 'institutional capture' will increase proportionately with the proliferation of the crypto industry.
So, how should the 'Cryptopreneur's Dilemma' be repositioned as public blockchains enter the next stage of their adoption curve?
On one hand, the success of the crypto industry's mainstreaming seems to rely more on deep integration with existing systems rather than clinging 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 initiatives, or that most blockchain users are unlikely to fully embrace the Cypherpunk ideals, even as their main basis for consumption decisions, is not unacceptable. As long as these systems can maintain open verifiability and be more resilient than existing alternatives, the 'decentralized performance' is almost meaningless, and it is perfectly acceptable for centralized enterprises to utilize and operate public blockchains. Therefore, once the regulatory status of the crypto industry is clarified, this dilemma may become less important for most entrepreneurs.
However, it is incorrect to think that this marks the end of the crypto industry's original vision. 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 vulnerable to corruption, mass surveillance, and single points of failure. Only when a sufficient number of entrepreneurs and supporters persist on the difficult path of building truly decentralized, privacy-preserving, and anti-control systems can blockchain continue to exist. Although the commercial success of the crypto industry may no longer depend on these ideals, its long-term social impact undoubtedly still relies on them.