I was at a dinner recently where the topic of crypto came up. Only two of us at the table were full-on believers, and the rest were generally sceptics. So naturally, the two of us started talking about why we think crypto is important. But in moments like this, it always becomes immediately clear that crypto is really hard to explain in a succinct and compelling way. Like, I don't know how to do it. Thankfully, venture firm a16z just released their latest State of Crypto report, and so here are a handful of interesting takeaways.
The number of crypto addresses continues to grow. Currently it's at an all-time high of approximately 220 million, which roughly mirrors the adoption curve of the internet back in the 90s (log scale). It is, however, important to note that one crypto address does not necessarily correspond to one human being. For example, I have many different crypto addresses. So if you dig a little deeper, you'll see that their net estimate is somewhere between 30-60 million real human beings transacting using crypto every month. This is the estimated active user base and it continues to grow.
The number of mobile crypto wallet users is also growing rapidly outside of the US, namely in countries like Nigeria, India, and Argentina. This is the result of a number of factors: population growth, mobile phone adoption, government support, inflation, and many others. I mean, since 2010, the Argentine Peso has lost basically 99% of its value against the USD. So of course you'd rather put your money somewhere else, such as in stablecoins.
Stablecoins are cryptocurrencies that have their value pegged to something else, such as a fiat currency. Today, they are one of the most popular crypto products and virtually all of them (more than 99%) are pegged to the USD dollar. This is viewed by some as an opportunity to strengthen the dominance of the US dollar at a time when it's waning (see above). But more importantly, stablecoins already serve two important functions in the market: one, it's as stable as the US dollar; and two, the cost of sending a stablecoin anywhere in the world is now basically free. Say goodbye to bank wire transfers.
It's worth reiterating that a16z is a venture capital firm that is heavily invested in the crypto space. And so reports like this are naturally a form of marketing and a form of lobbying. Still, there's a lot of great information in here that you can use to form your own opinions about the sector. It may not be succinct, but if you take the time, I think you'll find it compelling.
https://youtu.be/71DtEk1cFdg?si=ToueKPB7sq33lIwI
We've spoken about Vitalik Buterin before.
He is the inventor of the Ethereum blockchain, and its most prominent figure. He also happens to have grown up in Toronto. He went to the University of Waterloo. So when I wrote this post back in 2021, I asked: Why the hell is nobody talking about this? Why are we not celebrating the fact that our great city helped birth one of the most important technologies of our time? You couldn't ask for a better economic development story. Well, I guess the answer is twofold. Crypto isn't mainstream. Even back in 2021 when things were frothy it wasn't. And, we're awful at promoting and driving a global brand for our city. Both of these things need to change. So if you're interested in learning more about Vitalik and Ethereum, you should check out this new movie (trailer) called Vitalik: An Ethereum Story. To watch it, go to ethereumfilm.xyz and mint the NFT for $20. You'll then be able to stream it. I haven't done this yet, but I'll be doing it very soon. All of the proceeds from the NFT sales will go toward getting a more mainstream distribution deal.
So by watching, you're helping.
Update: I watched it. It’s great.
I just joined Warpcast. You can find my profile, here.
At first glance, Warpcast is going to look a lot like X. But instead of tweets, you cast. There are also various topic channels, similar to how Reddit works. But the most important difference is that Warpcast is a client for the Farcaster protocol, which is a social network built on Ethereum. This means that it is a decentralized social network.
You won't see of any this if you decide to sign up. All of the esoteric crypto things are hidden in the background. But it's there. And it ultimately means that, as a user, you get to own your online identity and whatever content and following you create. Meaning, you can take it with you if you decide you no longer want to use Warpcast and instead want to access the network through another client.
It also means that software developers now have a real incentive to build things on top of the protocol, because unlike with a centralized service like X, they can be confident that they won't get the rug pulled out from underneath them. And herein lies the feature that will ultimately lead to an enormous amount of new ideas and innovation.
In real estate terms, you can think of developing on top of a centralized service like building within a theme park owned by a single company. The theme park might want you to build on their land, right now, but if at some point it no longer suits their business needs, they can always change the game on you.
On the other hand, building in a city on land you own outright is a lot like developing on top of a decentralized service. Sure, you need roads and municipal infrastructure to service your land (think of these like the above protocol), but you generally don't need to worry that the city might wake up one day and remove all of this important infrastructure. It's a given. And that's a fundamental difference, even if the buildings might look the same in the end.
Venture capitalist Fred Wilson once explained it in this way, “don’t be a Google bitch, don’t be a Facebook bitch, and don’t be a Twitter bitch. Be your own bitch.” What he meant by this is that if you build on someone else's land, then you're opening yourself up to being their bitch. What you want to be is your own bitch. And similar to how our cities work, this is the potential of decentralized services.
As I write this post, I currently have 6 followers on Warpcast. If you'd like to be number 7, you can follow me here.
I was at a dinner recently where the topic of crypto came up. Only two of us at the table were full-on believers, and the rest were generally sceptics. So naturally, the two of us started talking about why we think crypto is important. But in moments like this, it always becomes immediately clear that crypto is really hard to explain in a succinct and compelling way. Like, I don't know how to do it. Thankfully, venture firm a16z just released their latest State of Crypto report, and so here are a handful of interesting takeaways.
The number of crypto addresses continues to grow. Currently it's at an all-time high of approximately 220 million, which roughly mirrors the adoption curve of the internet back in the 90s (log scale). It is, however, important to note that one crypto address does not necessarily correspond to one human being. For example, I have many different crypto addresses. So if you dig a little deeper, you'll see that their net estimate is somewhere between 30-60 million real human beings transacting using crypto every month. This is the estimated active user base and it continues to grow.
The number of mobile crypto wallet users is also growing rapidly outside of the US, namely in countries like Nigeria, India, and Argentina. This is the result of a number of factors: population growth, mobile phone adoption, government support, inflation, and many others. I mean, since 2010, the Argentine Peso has lost basically 99% of its value against the USD. So of course you'd rather put your money somewhere else, such as in stablecoins.
Stablecoins are cryptocurrencies that have their value pegged to something else, such as a fiat currency. Today, they are one of the most popular crypto products and virtually all of them (more than 99%) are pegged to the USD dollar. This is viewed by some as an opportunity to strengthen the dominance of the US dollar at a time when it's waning (see above). But more importantly, stablecoins already serve two important functions in the market: one, it's as stable as the US dollar; and two, the cost of sending a stablecoin anywhere in the world is now basically free. Say goodbye to bank wire transfers.
It's worth reiterating that a16z is a venture capital firm that is heavily invested in the crypto space. And so reports like this are naturally a form of marketing and a form of lobbying. Still, there's a lot of great information in here that you can use to form your own opinions about the sector. It may not be succinct, but if you take the time, I think you'll find it compelling.
https://youtu.be/71DtEk1cFdg?si=ToueKPB7sq33lIwI
We've spoken about Vitalik Buterin before.
He is the inventor of the Ethereum blockchain, and its most prominent figure. He also happens to have grown up in Toronto. He went to the University of Waterloo. So when I wrote this post back in 2021, I asked: Why the hell is nobody talking about this? Why are we not celebrating the fact that our great city helped birth one of the most important technologies of our time? You couldn't ask for a better economic development story. Well, I guess the answer is twofold. Crypto isn't mainstream. Even back in 2021 when things were frothy it wasn't. And, we're awful at promoting and driving a global brand for our city. Both of these things need to change. So if you're interested in learning more about Vitalik and Ethereum, you should check out this new movie (trailer) called Vitalik: An Ethereum Story. To watch it, go to ethereumfilm.xyz and mint the NFT for $20. You'll then be able to stream it. I haven't done this yet, but I'll be doing it very soon. All of the proceeds from the NFT sales will go toward getting a more mainstream distribution deal.
So by watching, you're helping.
Update: I watched it. It’s great.
I just joined Warpcast. You can find my profile, here.
At first glance, Warpcast is going to look a lot like X. But instead of tweets, you cast. There are also various topic channels, similar to how Reddit works. But the most important difference is that Warpcast is a client for the Farcaster protocol, which is a social network built on Ethereum. This means that it is a decentralized social network.
You won't see of any this if you decide to sign up. All of the esoteric crypto things are hidden in the background. But it's there. And it ultimately means that, as a user, you get to own your online identity and whatever content and following you create. Meaning, you can take it with you if you decide you no longer want to use Warpcast and instead want to access the network through another client.
It also means that software developers now have a real incentive to build things on top of the protocol, because unlike with a centralized service like X, they can be confident that they won't get the rug pulled out from underneath them. And herein lies the feature that will ultimately lead to an enormous amount of new ideas and innovation.
In real estate terms, you can think of developing on top of a centralized service like building within a theme park owned by a single company. The theme park might want you to build on their land, right now, but if at some point it no longer suits their business needs, they can always change the game on you.
On the other hand, building in a city on land you own outright is a lot like developing on top of a decentralized service. Sure, you need roads and municipal infrastructure to service your land (think of these like the above protocol), but you generally don't need to worry that the city might wake up one day and remove all of this important infrastructure. It's a given. And that's a fundamental difference, even if the buildings might look the same in the end.
Venture capitalist Fred Wilson once explained it in this way, “don’t be a Google bitch, don’t be a Facebook bitch, and don’t be a Twitter bitch. Be your own bitch.” What he meant by this is that if you build on someone else's land, then you're opening yourself up to being their bitch. What you want to be is your own bitch. And similar to how our cities work, this is the potential of decentralized services.
As I write this post, I currently have 6 followers on Warpcast. If you'd like to be number 7, you can follow me here.
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