Crypto is Inevitable

The story of cryptocurrency is often told through the lens of digital money and consumer speculation. But viewing crypto solely through this frame misses its profound implications for financial infrastructure. While the consumer web enabled billions to share cat photos and social updates, crypto is quietly enabling something different: programmable, transparent, and censorship-resistant financial systems.

Today, innovations originating in the realm of "cryptocurrency" are introducing new capabilities and concepts at a frenetic pace. I put cryptocurrency in quotes because the label is reductive. Encompassed in this one term is a bundle of technologies and economic theories centered on decentralized databases. Different implementations are tuned for managing new types of currencies, ownership of digital assets, software-mediated governance, and more.

The last decade of crypto was anchored by the development of fundamental protocols. But this space is broad and insanely deep, with intellectual energy pouring into core cryptography, consensus mechanisms, mining chip development, political maneuvering, business innovation to procure cheap energy, programming language development, financial engineering, and more.

Anybody who boils the crypto world down to tech bros speculating on tulip-like money simply hasn't been paying attention. Though, certainly, there is plenty of that as well.

Our current financial infrastructure wasn't designed. It evolved. Companies like SWIFT, Visa, PayPal, and countless banks spent decades building proprietary systems that somehow manage to interoperate just well enough to keep global commerce flowing. But this patchwork creates significant issues:

1. Transaction settlement is slow and expensive, especially across borders
2. Financial access requires navigation of a complex web of intermediaries
3. Each intermediary represents a potential point of censorship or failure
4. The system's complexity makes innovation incredibly difficult

Making payments work on the internet took massive effort. Companies spent billions abstracting away fraud risk, compliance, and technical complexity. Today, web payments feel like a solved problem. However, the underlying infrastructure remains a maze of corporate intermediaries with custom APIs, closed-source fraud models, and their own banking relationships.

In the physical world, handing someone cash is direct and permissionless. On the internet, you're forced through intermediaries for every transaction. This financial intermediation created powers of censorship at an unprecedented scale.

To be honest, the fact that crypto made it this far is something close to a miracle. The collective willingness for such a large number of people to hold volatile, non-income-producing assets is unexpected. It's hard to paint a compelling, fully-rational explanation for it all. Yet, millions have done just that.

Along the way, smart people with backgrounds in finance built some of the most sophisticated financial infrastructure on Earth. We now have highly-functional decentralized market mechanisms and robust ways to manage digital ownership. We have debt protocols that are funded by whoever wants to fund them and usable by anybody that wants to use them, fully automated by decentralized software.

The crypto industry invented world-class financial infrastructure that is currently used to build markets for JPGs and memes.

At some level, it's stupid. I know. But here's the thing: building financial infrastructure is really hard. Gall's Law is relevant here: "A complex system that works is invariably found to have evolved from a simple system that works." Attempting to jump straight to managing assets that have long-standing value (like corporate equities) on the blockchain would have required a complex system that works from Day 1. In other words, it ain't gonna happen.

In a sense, we collectively willed a low-consequence market into existence as a test case for the financial infrastructure of the future. And it worked.

At this point, I don't think there are any fundamental limitations preventing crypto from becoming the settlement layer for many financial assets. The technology has matured enough to handle:

• Corporate equities and cap tables
• Corporate financing workflows
• Public property records and deed management
• New types of debt financing and servicing activities
• Derivatives markets for all of the above

The power of programmable blockchains like Solana or Ethereum is that we can create special-purpose contracts that interoperate with existing legal and financial systems. Smart contracts will succeed if they enhance rather than try to replace the intent of existing financial and legal frameworks.

Just because crypto has its philosophical roots in unseizable assets doesn't mean that we need to blindly follow that paradigm for everything. Moving key records on-chain gives institutions the power to keep records without risk of accidental loss or corrupt alteration. It gives stakeholders clear transparency into institutional action. Furthermore, being on chain enables more seamless and liquid markets.

Most participants in this new financial infrastructure will likely be institutions managing holdings on behalf of their clients. And that's okay. The technology enables users to take full custody if they ever decide there is reason to do so, so long as the institution they choose does not lock them in. Indeed, ensuring users have the right to take full custody of their digital assets is one area that I would hope to see strong support from governments.

We have seen many recent cases of "debanking." Banks can cut off individuals and businesses from the financial system at any time. Our current infrastructure requires permission from multiple intermediaries for every transaction. This gives these intermediaries unprecedented power over economic activity.

A purely permissioned system will always be fragile. Alternative rails with permissionless settlement would create both optionality and resilience for our entire financial system.

While speculation and consumer hype dominated crypto's early narrative, its true revolution is happening at the infrastructure layer. Rather than trying to replace the consumer internet, crypto is quietly rebuilding the plumbing of finance itself.

The need for censorship-resistant, transparent, and programmable financial infrastructure has never been more apparent. As the market settles from its speculative excesses, builders are focusing on these fundamental improvements to our financial systems.

The next chapter of crypto isn't about consumer apps or "web3." It's about the unsexy but essential work of modernizing the infrastructure that powers global finance.