Original title: Speculation: The Light Bulb Moment
By Sterling Campbell
Compiled by: TechFlow
Amid the noise and excitement surrounding meme coin casinos and unlimited games, it’s easy to dismiss cryptocurrencies as mere speculation. Many have called the recent bull market a remarkable display of ultra-high-risk gambling, financial nihilism, and bubble software. While speculation does drive a lot of activity, classifying it as a net negative for our industry is incomplete. Speculation and gambling may belong to the same family, but they are far from twins.
The casino itself feels far removed from reality. There are no clocks and time seems to move at a snail's pace. The floors are designed like mazes, making it difficult to navigate or leave. You are literally cut off from the real world, distracted by jackpots arriving and major winners screaming (which is admittedly much more fun than posting Phantom Wallet screenshots). Enjoy it all, but don't let the noise of the casino distract you from the potential of our industry.
Growing up in Las Vegas, I am no stranger to high-stakes gaming. I watched my hometown grow rapidly on the backs of gamblers, paying virtually no state income tax because the casinos covered it all. I watched Las Vegas become the fastest-growing city in the U.S., attracting companies like Zappos and Gusto and becoming a far bigger presence than Sin City ever was. I have a bigger goal for our industry.
It's all speculation
Speculation is not just the domain of high-stakes investors or futurists; the fabric of modern society is woven with threads of speculation.
Philosopher Søren Kierkegaard once observed, “Life can only be understood backwards, but must be lived forwards.” From the moment we wake up, we participate in a constant process of anticipating and preparing for future events. Our morning commute is based on speculation about traffic conditions and arrival times. Our choice of clothing often reflects speculation about the day’s weather or social interactions.
In the workplace, projects are planned and resources are allocated based on speculative predictions about market trends and consumer behavior. Even our social lives are influenced by speculation, as every swipe left or right on a dating app is filled with possibilities. This ongoing process of predicting and adapting to potential futures is so ingrained in our daily lives that we often overlook its pervasive impact.
We dance with uncertainty, using our speculative abilities to navigate the complexities of modern life and shape our reality. More importantly, it is in uncertainty that some of the greatest opportunities lie.
Speculation and innovation
Throughout history, speculation has been a constant companion to humanity’s greatest technological advances. Technological progress has been accompanied by visionaries working on concepts that seemed impractical or too far-fetched, requiring upfront capital and enormous foresight to develop. For example, the printing press was not an instant success in the 15th century; it was preceded by decades of speculation about the transformative power of movable type and the democratization of knowledge. Similarly, the development of steam power in the 18th century was based on early speculative investments in coal mining, metallurgy, and engine design. These developments did not go smoothly.
Time and again, the most impactful innovations are the result of courageous individuals and organizations willing to bet on the future, often before the fruits of their efforts are apparent or after multiple failures. In the world of pharmaceutical development, the story of penicillin illustrates how even unexpected failures can lead to revolutionary breakthroughs. Alexander Fleming’s discovery came when he noticed that mold contamination in a petri dish killed surrounding bacteria—a “failure” in his original experiment that led to one of the most important medical discoveries of the 20th century. It would be foolish to blame any number of failures without acknowledging the role they played in our greatest successes.
Take the dot-com boom, a period that saw $1.7 trillion in value lost from March 2000 to October 2002. One could simply single out Pets.com or any number of other examples of the speculative frenzy that ensued, but to do so would be to miss the point. The dot-com bubble laid the foundation for the modern digital economy, e-commerce, and social media platforms we now take for granted (and that took decades to build). When you zoom out, the value lost during that period is little more than a blip.
In Cryptocurrency, Speculation Is Good
Given that speculation is fundamental to the human experience, and there have been clear examples over the past decade of unbridled speculation driving innovation and growth, it would be foolish to reduce the entire crypto industry to a pointless, ultra-high-risk gamble. No one cares about Thomas Edison’s 1,000 failures or any of the ultimately ineffective paths he took; there are now 8 billion light bulbs in the world.
The focus on current failures is blinding one from the bigger picture. The crypto success story is already underway, with Bitcoin surpassing $1.2 trillion in market cap and other cryptocurrencies adding another trillion. Considering gold is a $15 trillion asset, the opportunity is vast and any failures or missteps pale in comparison. In fact, the value of cryptocurrencies as a whole, with the exception of Bitcoin, could drop to 0 and we would still have a massive venture opportunity on our hands (hint: we won’t). Bitcoin has entered the vocabulary of the average person and will continue to serve as the industry’s North Star for the foreseeable future due to its simplicity, immutability, and ubiquity.
Things have to be tried, money has to be burned, people have to fail before the lightbulb moment comes. The good news is that we are moving in the right direction as Bitcoin’s global adoption continues to rise and demand continues to increase over time (despite many doing their best to kill the industry).
You might be thinking, “Okay, Sterling, but how does buying Smoking Chicken Fish contribute to the overall value proposition of cryptocurrency?” or “Hey, Sterling, isn’t Solana just a meme coin? How is it so valuable?” or “Sterling, my wife told me that the youthful exuberance she fell in love with died years ago, can you help me?”
First, part of the allure of cryptocurrencies has always been about infinite games, and that will likely remain the case in an internet-first, synchronous community. These speculative games have always attracted the most attention, and Bitcoin’s main appeal has always been around its redistribution of wealth to anyone willing to believe in its long-term value proposition. This is a feature, not a bug.
This speculative behavior extends to every crypto cycle. In the last cycle, we saw NFTs take the world by storm, with people exploring all manner of value in verifiable behavior and ownership. The bottleneck to innovation was ultimately infrastructure, as gas fees kept many early adopters away, and the friction of onboarding brought real tears to my parents’ eyes. Unviable infrastructure dealt a huge blow to the industry, as emerging business models incentivized rugpulls, with only a handful of developers able to deliver on the grand vision that NFTs offered. There were scams, for sure, but there were also many sincere attempts to exploit the technology, and the story of verifiable fan culture is far from over.
I hope the time of these people is over.
Not only are memecoins a superior form of speculation due to their wider distribution, cheaper prices, and easier to understand value proposition, but they also serve as a testament to the infrastructure improvements that cryptocurrencies have made over the past few years, with all systems running pretty smoothly.
Considering that the main hesitation for many institutions in engaging with this technology is its unreliability or lack of “Lindy Effect”, the seamless activity we see across many ecosystems is a necessary step to understand how robust our infrastructure is. Likewise, those early adopters who are not afraid to invest $15,000 on-chain and lose it in multiple ways are extremely valuable pioneers in our development of solutions for ordinary people.
The advent of stablecoins has had a profound impact on decentralized finance (DeFi), but it has also experienced its own penicillin moment, enabling people in many emerging markets to gain access to dollar-denominated savings accounts, avoid high fees for cross-border payments and remittances, and access global markets. The global remittance market is worth $740 billion; these are huge opportunities with clear paths to success.
For Yellow Card — the most popular exchange in Africa, with monthly trading volume exceeding hundreds of millions of dollars — their users are not buying memecoins, but mainly trading Naira and Dinar for more stable USDC or USDT. This behavior also extends to Southeast Asia and Latin America, where inflation and hyperinflation plague these regions and traditional dollar usage is limited.
Payments offer a similar respite, helping small businesses escape the oppression of the financial system. Companies like Blackbird largely abstract away the “cryptocurrency” part, and restaurants around the world choose to use them because they help save on transaction costs and lower customer acquisition costs (CAC) for reward-seeking diners. TYB provides a newer loyalty perspective, giving consumers participation rewards that exceed the amount of consumption. These companies have experienced significant improvements in conversion rates, consumption, and user retention compared to their traditional peers, and for the first time are starting to see true adoption of crypto infrastructure beyond the typical “crypto” user. When networks succeed, they become extremely valuable, and the winners who experiment in these verticals will be wildly successful.
Prediction markets leverage speculation to better incentivize truth in voting, and companies like Polymarket are starting to gain mainstream success with nearly $500 million in volume alone this month. Drift also recently added prediction markets on Solana, and we’ll soon see Blinks embedded on the network whenever anyone argues.
The road to tokenization will be paved with categories that may seem silly at first glance, as you realize that everything could mean everything from carbon credits to ETFs to whiskey, recipes, and cattle. Nonetheless, we are already making significant strides toward this mission, as Securitize partnered with Blackrock to launch BUIDL to bring their first tokenized fund to market. Even BCAP’s early funds were tokenized, because things have to be tried and the game has to be played (sorry, I refuse to use the word “arena”).
Outside the Casino
A long-standing online user base is prone to highly emotional swings, and a sensationalist media is waiting for the next opportunity to reveal the craziness of our industry, so I don’t blame people for feeling depressed or negative when seeing recent activity. The essence of cryptocurrency is to disrupt the existing financial system; you should feel like the world is crumbling around you, and absurdism is often a close companion. The good news is that you can also play a key role in the solution. Many ideas are being tried, and many of them are destined to fail. That’s just the way it is.
Crypto casinos may look like a crazy dream of pixelated punks and dog-themed tokens, but behind this meme-driven madness lurks the potential for real change. So whether you’re here for the technology, the earnings, or because your wife’s boyfriend told you Bitcoin was going to $100,000, all it takes is a lightbulb moment.
