If you build the ponzi, they will come. But it doesn't mean they will build ponzis.
Alternate title: What if the vaporware is actually part of the tech adoption cycle and not evidence of a systemic failure of crypto?
There has been much discussion lately about the future of crypto. Specifically, many are frustrated that it appears a large number of the current projects were purely “vaporware” for speculation vs actually useful products.
This is a worthy discussion. However, I argue that this is the nature of growth within the crypto ecosystem and the vaporware speculation/crypto degen games are a necessary evil to drive important innovation.
If you build the ponzi, they will come. But it doesn’t mean they will build ponzis
There are 3 core takeaways to why the vaporware speculation helps grow the whole ecosystem in a net positive way:
The promise of riches and the excitement that comes from a hype cycle around new technology brings in lots of new people
Some of these people are good actors who want to make useful things
The hype cycle grows the entire ecosystem which is weighted more towards vaporware initially but drives growth in useful innovation later (more on this in a moment)
The first one matters because you need to bring attention to new tech in order to garner adoption. The second one is important because while yes, you do see charlatans and grifters arrive, you also get smart people that are good people intrigued by novel tech. And the third one I will talk about below.
Crypto cycle theory of vaporware vs real products
WTF am I looking at?
The above shows that the total amount of value and attention to crypto grows from cycle to cycle and that the distribution of this changes with each cycle.
I think there is a trend where value & attention is weighted towards vaporware initially but shifts to useful innovation more with each crypto hype cycle. In my opinion, we have seen this trend already and it will continue into the future.
My belief is that vaporware & scams will always exist but they will stagnate in growth compared to useful crypto products which will outpace them.
Why would vaporware stagnate vs useful crypto products?
Well, I think in bear markets like we are currently in, we come back to reality and those products go to 0. Some already have. Second, I think as more regulation is rolled out, it will be harder to create bad projects purely for financial gain. Third, I think as more useful products come out and more users are onboarded into crypto, the value and attention will naturally go to them and thus speculators will find better ROI speculating on real product valuations more than a white paper and a promise.
The real “flippening” is when monetary value and public attention of useful products eclipses the vaporware. I think it’s possible it comes in 2025 but it’s probably further down the road.
Crypto degens think they are modern traders creating generational wealth when in fact they’re just QA engineers with highly volatile income
I’ve talked about how I think the vaporware speculation helps bring in new people and grow the crypto eco in a positive way. However, I’d also argue, as per the tweet below, that the crypto speculation games are actually part of a necessary process to stress test these networks so they are ready for global scale. Without the financial incentives with speculation, few people would be here to push these chains/protocols to their limits.
Conclusion:
In my opinion the “ponzis” are a necessary evil at the moment to bring more people into crypto to stress test it, gain attention and find some of those who will become the builders that create the novel solutions that have significant positive impacts on the world.
special thanks to @_hounds for giving feedback on this piece