Author: Mario Laul
Compiled by: Deep Tide TechFlow
The foundation of public blockchains was laid by the Cypherpunks. Although the cryptocurrency industry was destined to encompass diverse ideas and practices from the very beginning, the core principles of 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 confront a difficult choice—whether to adhere to purist ideals, thus complicating the structure and operation of their projects; 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 inception 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 organizations 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 technology and built-in token incentive mechanisms provided almost ideal conditions for the rapid development of the early cryptocurrency ecosystem. Since then, with the accumulation of social capital and financial capital within individual blockchain networks and the industry as a whole, the cryptocurrency industry has gradually become a force that cannot be ignored, particularly evident in the 2024 U.S. presidential election.
However, driving revolutionary change requires not only audacity but also a certain degree of 'sociological naivety.' Any attempt to disrupt social structures, especially those based on law, often has a far higher likelihood of failure than success.
The cryptocurrency 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 circumvent the regulatory requirements of the jurisdiction in which they operate (whether the underlying infrastructure operators or the transacting parties) always face the risk of intervention from local law enforcement.
If the cryptocurrency industry wants to achieve true growth and impact, 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 definitely interested in you.'
While many aspects are still evolving, this is precisely what we are witnessing in practice. From taxing crypto-related activities and classifying tokenized assets to enforcing anti-money laundering and counter-terrorist financing (AML/CTF) rules, as well as clarifying legal responsibilities in DAO governance, the cryptocurrency industry is gradually integrating into the existing regulatory framework centered around national jurisdictions.
However, what deserves more attention 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 them from being overlooked or destroyed (whether intentionally or unintentionally) in ideological and political struggles. The existence of this 'Cryptopreneur’s Dilemma' is due to the fact that, like any innovation with far-reaching effects, the process of legitimization is both slow and contentious. For the cryptocurrency industry, this process is particularly difficult because the actions of some malicious opportunists have led to misunderstandings of the industry 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 cryptocurrency industry as a parallel system aimed at replacing traditional institutions, this integration blurs the lines between the two and may provoke cognitive dissonance and internal conflicts. For others, this integration is precisely a sign of success and the only sustainable path for blockchain to become systematically important infrastructure. As the industry matures and reduces risks, its practitioners, operators, and user groups will also 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 those ostensibly neutral infrastructures. The risk of 'institutional capture' will increase proportionally with the proliferation of the cryptocurrency industry.
So, as public blockchains enter the next phase of their adoption curve, how should the 'Cryptopreneur’s Dilemma' be repositioned?
On one hand, the mainstream success of the cryptocurrency industry seems to rely more on deep integration with existing systems than on an obsession with 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 ideals of the Cypherpunks, even using them as the primary basis for consumption decisions, is not an unacceptable thing. As long as these systems can maintain open verifiability and be more resilient than existing alternatives, then 'decentralized performance' is almost meaningless, and it is also acceptable for centralized enterprises to utilize and operate public blockchains. Therefore, once the regulatory status of the cryptocurrency industry is clarified, this dilemma may no longer be important for most entrepreneurs.
However, it is incorrect to think that this marks 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 powerful 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 in the arduous path of building truly decentralized, privacy-preserving, 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 impact undoubtedly still relies on them.