Five directions of cryptocurrency development and the reality that awaits them

Is cryptocurrency truly a revolution, or has it turned into a huge casino? This question has been hotly debated in the community lately. Partner at Castle Island Ventures and many other industry veterans acknowledge: initial ideals often diverge from what has actually developed. But instead of despair, it’s worth understanding what specific goals the crypto market truly serves.

What Does Crypto Actually Live By?

Over the past 15 years, the blockchain sector has accumulated a variety of goals and approaches. Analyzing the industry, five main camps can be distinguished, each understanding the development of cryptocurrency differently:

Money Revolution through Bitcoin

The first camp consists of followers of the idea of sound money. They believe that Bitcoin should become an alternative to government-issued currencies, returning humanity to a new gold standard. Over 15 years, Bitcoin has indeed become an important monetary asset at the national level, although progress has been slower than expected. This camp often views everything else in crypto as a distraction from the main mission.

Smart Contracts as a Driver of Efficiency

Vitalik Buterin and Ethereum followers promote a different concept: if we digitize money, then we can digitize all business logic. Smart contracts are meant to make the economy more transparent and fair. In practice, this has worked particularly well for financial derivatives and contracts that can be easily formalized mathematically. This direction demonstrates real usefulness, albeit limited.

True Digital Ownership

The idea of Web3 is based on a simple truth: digital ownership should be as reliable as physical ownership. People should own their digital identities and control their data. Although NFTs and Web3 social networks have yet to meet expectations, the philosophy remains relevant. When technology matures, the return of sovereignty over digital assets will become a natural consequence of internet development.

Modernization of Outdated Financial Systems

Western financial infrastructure still relies on technologies that are decades old. SWIFT, COBOL, clearing systems — all relics of the past that are difficult to upgrade, as trillions of capital flows depend on them. Blockchain offers an alternative architecture built from scratch, which can increase efficiency and reduce transaction costs.

Financial Inclusion for the Planet

The most humanitarian goal of cryptocurrency is providing affordable access to financial services for billions of people currently deprived of it. Stablecoins, decentralized exchanges, crypto wallet loans — these are real tools that allow people to store assets, access capital markets, and participate in the global economy without traditional banks. This approach already shows tangible results.

Side Effects of Progress

But why is there so much disappointment? Partly because the crypto market carries a significant side effect — speculation and gambling. When venture funds spend tens of billions on financing new blockchains, and meme-coin launch platforms multiply like mushrooms after rain, it creates the impression that the industry is built on sand. Perpetual DEX, pointless tokens, financial nihilism among youth — these are indeed side effects that cause harm.

Why does this happen? Because the side effect of speculation is an inevitable result of building a financial market on a deregulated basis. When there is no central authority controlling what is issued, the market decides itself. This side effect cannot simply be eliminated — it is organically linked to the architecture of blockchain.

Reality vs. Illusions

The discrepancy between ideals and reality is truly reaching grand proportions. Bitcoin did not replace fiat money overnight. NFTs did not revolutionize digital ownership. Smart contracts are mainly used for derivatives. Currently, only Bitcoin, stablecoins, DEX, and prediction markets demonstrate genuine market product alignment.

This does not mean failure. It means that reality is simply less dramatic than fantasies. And there is nothing wrong with that.

Practical Optimism Instead of Blind Faith

The right approach to crypto can be called practical optimism. Yes, the side effect of casino-like behavior exists. Yes, a large part of capital is wasted on pointless projects. But this does not indicate the failure of the idea, only that revolutions are messy and painful.

Major technological changes are always accompanied by bubbles. The bubble itself is a side effect of investing in new infrastructure. Speculation helps build a useful foundation. But if you were expecting a libertarian utopia, disappointment is inevitable.

The key to understanding is to adhere to three principles:

First, acknowledge that the side effect of speculation really exists and causes harm. Meme coins and gambling are not art; they are industry waste. But this does not mean the entire industry is worthless.

Second, remember the real achievements. Stablecoins help people in hyperinflationary countries. DEX allows trading without intermediaries. Financial inclusion is not a dream; it is already a reality for millions.

Third, be skeptical of overpromises. Bitcoin will not replace the dollar tomorrow. But as a store of value and means of payment, it is already gradually changing the world.

Conclusion: Beyond the Dining Room of Despair

The crypto industry tried to promise too much too quickly. That was a mistake. But a mistake does not invalidate the goals. People have the right to invest their knowledge and careers into projects they believe in. Just this time, it’s not as triumphant as in the movies.

We don’t like the side effect of the casino, but it objectively exists. We need to acknowledge it and move forward, maintaining optimism based on factual achievements, not empty promises.