No one is in crypto for the tech. We’re all here for the price

In spite of all the technology that goes into Bitcoin — from the software to the hardware — none of it means anything at all if the price is too low

OPINION
article-image

Midjourney modified by Blockworks

share

Crypto attracts all sorts. Some play it safe and only hold bitcoin. Others gamble on memecoins, search for yield or play roulette in crypto casinos. There’s also a few who like trading JPEGs.

Other folks may seem in it for the tech. Cypherpunks might use crypto to avoid constant financial surveillance, and super shadowy coders find power in helping others undermine monetary censorship. Activists under draconian rule write their history to distributed ledgers.

There’s probably even those who prefer to eat carrots that exist somewhere on the blockchain — their supply chains cryptographically verified and backed by an independent carrot-and-crypto farming co-op or some such.

However, sadly, and despite what some may claim, there’s actually no such thing as being in crypto “for the tech” alone. And that’s okay.

Price is the heart of practically all touted benefits of crypto. Take Bitcoin’s raw immutable nature. By all accounts, it’s an uncensorable global payments network. Whether it’s paying for coffee or sending your net worth to cold storage, you can probably trust that those transactions are too expensive to tamper with or reverse (barring some freak aberration of the game theory that makes the network much cheaper to exploit, or some other hypothetical scenario).

But in spite of all the technology that goes into Bitcoin — from the software to the hardware — none of it means anything if the price is too low.

Let’s say you’re forced to relocate to another country and your life savings are under threat of confiscation at the border. You could sell all your belongings for bitcoin (using it as a store of value), lock the seed phrase in your brain wallet and make it to safety without losing a cent. What good would it do if bitcoin crashed 80% before you could cash it out on the other side?

The same is true of using Bitcoin as a payments network. The Bitcoin Pizza guy, Laszlo Hanyecz, famously paid 10,000 BTC for two Papa Johns’ pizzas in 2010. That was about right for back then, but the same amount of BTC would be worth $420 million today.

Those pizzas ultimately ruined the idea of buying real-world stuff in bitcoin. Nobody wants to be the next Bitcoin Pizza guy by accidentally spending $3 billion on a new pair of rollerblades due to a hypercycle rally years down the road.

Loading Tweet..
A classic.

Bitcoin’s price is all that matters, whether when using bitcoin to store value or as a payment method. The price can go up or down, just not by too much. 

But let’s say you’re a technology maxi uninterested in prices. Ethereum or Solana presented as world computers may likewise seem like the holy grail. If Twitter is the world’s digital town square, then so too are blockchain networks the never-ending operating systems of our hyper-monetized modern consciousness. 

After all, there’s an app for practically every single facet of our lives, from sleep tracking to doggy meetups, microsaving and dating. If for whatever reason those apps are suddenly broken, illegal or otherwise not around, those apps can instead deploy to an EVM-enabled blockchain network that would exist for as long as there were people willing to run the software on their computers.

All this turns properly decentralized blockchains into public goods. They can be “last defense” networks to run all our stupid apps on, so they’re probably useful to have around at the very least.

And the nodes of those networks, the “tech,” will surely be useful forever — if the argument didn’t fall apart on the off chance the price of ETH and SOL falls so low that block rewards don’t cover costs of maintaining the servers and whatnot. 

All this is by design. In crypto, the technology dictates the price, and the price determines the network’s utility, a symbiosis expressed well by the “can’t the devs do something” meme. 

Well, the devs are doing something: Now many are sending out points to those who use their networks with the implied promise of being one day airdropped crypto scaled to their activity — a model recently executed with precision by trading-focused NFT marketplace Blur and its vampire attack on OpenSea. 

Loading Tweet..
Rainbow is another Web3 project sending out points to its users

The same developer is now preparing an Ethereum layer-2, Blast, with its own promises of an airdrop tied to early-access usage. Solana liquid staking protocol Jito’s recent $165 million airdrop has also puffed up hype from earlier token distributions by way of Pyth and Jupiter months earlier.

Token incentives and point systems are by all accounts methods of buying adoption with the promise of future prices. 

Because price is all that matters.



Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

AERODROME TEMPLATE.png

Research

Aerodrome is a "MetaDEX" that combines elements of various DEX primitives such as Uniswap V2 and V3, Curve, Convex, and Votium. Since its launch on Base, it has become the largest protocol by TVL with more than $495M in value locked, doubling Uniswap's Base deployment.

article-image

PayPal has unequivocally made a name for itself as a crypto adopter among fintech giants

article-image

Also, a look into how the highly-debated SAB 121 could end up shaking out for crypto custodians

article-image

Vance, an Ohio Republican, is largely seen as crypto-friendly

article-image

Plus, all the world is green as prices across the crypto space rally, with solana reaching a nearly two-week high

article-image

Investors add to crypto positions after “turnaround in sentiment due to lower-than-expected CPI,” CoinShares research head says

article-image

Plus, Ethereum is in the midst of a vibecession