Core Insights - The cryptocurrency industry has deviated from its original vision, focusing excessively on infrastructure innovation while neglecting the fundamental monetary attributes necessary for achieving financial sovereignty [2] - The industry's misjudgment of which applications are truly worth building is at the core of its current predicament, suggesting potential directions for real value to emerge [2] Application Layer Illusion - The narrative of the cryptocurrency industry has evolved through various stages, consistently aiming to create revolutionary applications beyond finance [3] - The "fat protocol theory" posits that unlike the internet's TCP/IP protocol, which captured little value, blockchain protocols will retain most of the value [3] - A flawed mindset has emerged, where Layer 1 public chains are expected to create value through diverse application ecosystems, similar to how Apple’s App Store or Microsoft Windows generates value [3] - The attempt to impose financialization on scenarios that do not require it has led to a disconnect between the technology's outcomes and sustainable value creation [3] Misunderstanding of Financialization - Financialization of social interactions or entertainment activities misinterprets the core function of finance in society [4] - Tokenized social applications have failed to achieve mainstream adoption, relying on token incentives rather than product value [3] - Gaming applications face resistance from traditional gaming communities, who believe financial mechanisms detract from the gaming experience [3] Distinction Between Blockchain Technology and "De-trust" - Blockchain technology is a tool for creating distributed, irreversible consensus ledgers, while de-trust refers to executing transactions without relying on third-party intermediaries [6][7] - The costs associated with de-trust, such as efficiency loss and resource consumption, must be justified, which is often not the case for non-financial applications [9] Industry Adaptation - The industry is witnessing a natural adaptation process where traditional institutions adopt blockchain technology for efficiency rather than de-trust [10] - The focus has shifted from disrupting existing systems to incremental efficiency improvements, with value migrating towards applications with clear utility rather than foundational infrastructure tokens [10] Return to Monetary Essence - The future direction of the industry should involve reuniting the enhanced technical capabilities of blockchain with its original monetary mission, focusing on creating better currencies rather than attempting to financialize everything [14][15] - The essence of currency as a foundational infrastructure layer is crucial, as it should facilitate economic activities without dominating them [15] - The current ecosystem's tragedy lies in resource misallocation and missed opportunities, emphasizing the need for transformative solutions to address the fundamental issues of currency [16]