Real narratives are not created on Twitter, but forged by innovation.

Written by: Matti

Compiled by: Luffy, Foresight News

A while ago, I published some of my thoughts on cryptotwitter (CT). To my surprise, these views sparked a heated discussion in the community. I'm not sure if my views are beyond the scope of my critics' understanding, or if I have touched upon the vested interests of CT.

CT is easy to deceive people

That’s not to say that people don’t stumble across useful investment advice on CT. CT is a novel form of information binge, a never-ending soap opera with ridiculous plots and villains. It’s an entertainment venue.

This experience got me thinking about the current state of cryptocurrency. At some point, it hit me: cryptocurrency is mainstream. It may not be mainstream adoption, but it is mainstream entertainment. How many people around you haven't heard of cryptocurrency? Cryptocurrency is a hot topic in the US presidential election today, how can it not be mainstream?

People like to be "early birds" and they deceive themselves into thinking that they can make money if they act early. Participation is a prerequisite for success, and CT is a false prophet who perpetuates this view. This is Alpha, that is Alpha... CT is a reality show that sells tokens for entertainment.

CT is neither a bad nor a good thing for the industry, it is just a manifestation of the mainstreaming of cryptocurrency. From humble anarcho-capitalism to the idealistic culture at its peak, today's cryptocurrency is undergoing TikTokization and being packaged and presented to consumers in ways that Satoshi Nakamoto could never have imagined.

This is how we merge into the mainstream

A CT representative once wrote (roughly as follows): "It's hard to distinguish between signs of a bubble and mainstream adoption." The problem with mainstream is that you lose the early opportunity.

Cryptocurrency has adopted its own Manifest Destiny culture. Whether you’re a Bitcoin, ETH, or SOL maximalist, you believe in the legend of the four-year cycle. Almost everyone believes that cryptocurrencies are destined to grow, and every four years a big bull run will suddenly appear and lead us to the land of abundance.

But as the industry continues to scale, imitation and borrowing become more valuable than innovation. The crypto industry now uses the mantra of a four-year cycle to continue the idea that "early is an advantage." This may change, and participation may not be enough. The consequences of complacency will eventually come.

Necessity is the mother of invention, but unfortunately there is a ton of capital focused on the short-term game (price increases) and a ton of savvy founders who know how to play the venture capital beauty contest. There has been neither demand nor a real trigger for innovation over the past two years.

This is why cryptocurrencies currently only see macro interventions as a lifeline, whether it is a rate cut or a new presidential administration. This suggests that we expect to benefit from top-down capital inflows (such as ETFs) rather than bottom-up innovation. The question is whether this game will break sooner or later.

Currently, venture capital firms are having difficulty raising new funds, and the venture capital industry is under scrutiny for declining returns. The same is true for cryptocurrencies, but there is a premise that existing crypto LPs have already received returns around 2021. This will not happen this time, as funds that touted paper gains quickly suffered a brutal blow.

What is the savior? To see financial deformity as the only way out and hope that a greater fool will save us shows how far we have fallen. The problem is that most people don't even hide this. I have never seen it: standing on the edge of a bull market, everyone can't wait to sell.

The concept of a "four-year cycle" in cryptocurrency needs to be completely destroyed, only then can cryptocurrency truly cross the chasm and become something completely new. As long as the concept of a "four-year cycle" exists, the default incentive mechanism is:

Prioritize short-term behavior (whether as a builder or an investor)

Continuing the “Greater Fool Theory” as people always believe that the current cycle will eventually collapse.

Crypto is turning into a zero-sum game as low-hanging fruit ideas are adopted. Founders and the “community” celebrate massive funding rounds without any product as a win. While X and Y are funded from all sides, they mask the fact that they have no real technological innovation like the previous cycle (DeFi).

What do we believe in, other than the foolish hope that someone will take over? Do we believe in CT? Is it just a sentiment amplifier? Do we believe in alpha, or do we believe in a self-deceiving narrative?

See, that’s all we have left… narratives. We force feed ourselves stories that we don’t believe in, just hoping others will believe them. But without narratives, there can be no bull market and adoption! Yes, but narratives work best when you don’t treat them as narratives.

Real narratives aren’t created on Twitter. They’re forged by innovation, which inspires enthusiasm that then turns into self-righteous hubris. That’s what fanaticism is, and fanaticism must have a foundation. We don’t have that foundation, we just want to spread — using memes, turning empty narratives into reality through Twitter.

I've made this mistake myself. Covering up product flaws by shouting "culture!" is not a good approach. The only culture we've been fostering is one that leverages empty narratives and violent community, and the strength of these cultures is only determined by price performance. But maybe, after all, we shouldn't underestimate the predictability of stupidity. Hasn't stupidity always saved us from extinction before? Or maybe, somewhere around the corner, a major innovation is brewing?

I don't have an answer. I suspect that if the market doesn't reach new highs, we're heading into unforeseen territory that could be painful in the short to medium term, but good for innovation in crypto.