Debate on the Value of the Cryptocurrency Industry: Did We Choose the Wrong Industry?
Ethereum core developer Péter Szilágyi's Twitter discussion with crypto KOLs.Compiled by: Wu Says Blockchain
Introduction
Ethereum core developer Péter Szilágyi is one of the members of the Ethereum Foundation and the current lead developer of Geth, the most mainstream Ethereum execution layer client.
On the evening of August 5, after witnessing the intense emotional fluctuations of the community in response to the market's dramatic volatility, Ethereum core developer Péter Szilágyi tweeted his doubts about whether he had chosen the wrong industry, revealing a deep disappointment with the crypto industry, which sparked widespread discussion. Below is Wu Says' compilation and translation of the original text and corresponding key comments:
Original Text
I often doubt whether I entered the wrong industry.
Take SpaceX as an example: If they successfully send a rocket to Mars, it’s a human advancement; if they fail and the rocket explodes, humanity can learn from it and improve; all outcomes drive progress.
In contrast, the crypto space feels like a casino for fools (apologies to the few). When the market goes up, people shout about when to buy a sports car; when the market goes down, it directly affects or even destroys lives; what contribution does this make to humanity?
Yes, building a new monetary system takes time. True… but can we also create something useful along the way? Everyone is focused on becoming the next V (possibly referring to Vitalik), yet no one wants to create something useful; everyone is chasing the extraction of value.
I really don’t see why this system shouldn’t collapse? From a broader perspective, what do we stand to lose? Everything happening in the crypto space is just a massive transfer of value, but so far, I haven’t seen any value creation.
Please note that getting rich by luck and then transferring funds to some non-crypto projects does not count as a success story in the crypto space. At most, it’s a story of a lucky philanthropist, but more likely, it’s just someone diversifying their investments.
In my view, it’s time for this industry to create something truly useful that people are willing to use, or it should just shut down.
At least Bitcoin attempted (though failed) to become a safe-haven asset. But other projects seem like merchants selling shovels; they aren’t really creating anything valuable. Just like during the gold rush, those selling shovels don’t care whether there are gold mines to dig; they just want to profit from it. The reality is that these projects haven’t provided any real innovation or actual value, only pursuing short-term profits and speculative opportunities.
On the evening of August 6, Péter Szilágyi tweeted again:
My complaints about Ethereum/cryptocurrency are not to disparage them but to maintain realistic expectations.
Our most important task is to protect those who invest their savings in this world from harm. Everything else is secondary.
Promising everything but failing to deliver can lead to bloodshed in the streets. Persuading people to enter things they don’t understand the risks of is the same.
We must be honest, acknowledging what is effective, what is ineffective, what has been accomplished, and what has not. Emphasize the risks of each part, including those that may never be realized in the future.
I will always oppose creating hype because I don’t want to see ordinary people ruined by some billionaire venture capitalists who don’t care about your existence.
Yes, I may always be in the minority. Yes, this may cost me the majority of potential gains in cryptocurrency. I believe fairness is more important than financial gain.
Comments and Replies
The founder and former CEO of the decentralized cryptocurrency exchange Shapeshift commented: Stablecoins, DeFi lending (like Aave or Compound), decentralized exchanges (DEX), privacy coins, many excellent wallet applications, outstanding financial intelligence systems like Dune or Messari, high-throughput blockchains—there are indeed many great inventions in the crypto space. You may be misled by the casino-like speculation, but you should see the real value beneath the surface.
Péter Szilágyi replied: I’m not saying there’s absolutely nothing valuable being created. But I feel that speculative factors dominate too much, and we seem to enjoy this phenomenon because it brings money. Regarding what you listed as creations:
● I accept stablecoins.
● Lending requires collateral, so you need on-chain wealth to obtain it, which for me isn’t true empowerment.
● Decentralized exchanges: Well, this seems directly casino-like to me. If we had many strong currencies that people genuinely wanted to exchange, DEX would be an essential tool. But as it stands, it’s more about trading, which doesn’t hold substantial meaning for me right now.
● Privacy coins: They aren’t that widespread, and we might see crackdowns against them (like Tornado, etc.). I would be happy to see their development and acceptance.
● Wallets: They are just auxiliary tools for the rest but are not a use case in themselves.
● Dune/Messari: Well, you can analyze the casino situation, but that doesn’t reduce its casino nature; however, I’d be happy to be proven wrong.
● High TPS: Yes, we’ve reached that point, but what are we using it for? I’m using my shovel metaphor to express this. I hope we can apply it to some practical uses rather than just releasing 1000 meme coins.
I believe many great things are being built. But aren’t we letting MEME coins and Lamborghini sports cars become our representatives?
Crypto KOL @iamDCinvestor commented: Transparent on-chain settlement is actually a significant value addition for humanity.
Péter Szilágyi replied: What impact does this have on the 99.999% of people in the world who don’t have money to gamble?
@iamDCinvestor replied: 99.999% of people don’t need to use it directly to benefit. A more transparent financial system will benefit everyone because it reduces behind-the-scenes tricks and opacity, lowers costs, and increases trust. These values may be hard to see if you only focus on degens being liquidated, but it’s important; I truly believe in the ability to change the world.
Péter Szilágyi: Of course, I completely accept that. But if we call it a "world computer" or something similar, shouldn’t we build something more directly related to ordinary people?
@iamDCinvestor: I agree, we need other applications on a larger scale in other areas. I believe we will achieve this massive value settlement layer, which is a good start, but more will happen. I still think that smart contract wallets, non-monetary digital assets, and other forms of currency will be very important in the future. However, at the same time, booms and busts won’t disappear. Human greed is still too strong, and the systems being built are really important for the future, and your work is important too.
@0xemon commented: You should spend more time in emerging markets rather than the West. Many people rely on stablecoins and DeFi infrastructure to improve their economic situation. The problem is that most people don’t want to publicly discuss their financial decisions, so you only hear the stories about Lamborghinis.
Péter Szilágyi: Stablecoins may have some value. However, if you need to rely on cryptocurrency for economic reasons, are you really the target audience for all these DeFi protocols?
@0xemon: Maybe not, which is why I think we need to encourage more developers and investors from emerging markets. Supporting entrepreneurs in developed markets doesn’t really help the target users at the bottom of the pyramid. I know many people using stablecoins because they live in countries with capital controls and can earn from saving in stablecoins. They also use it as a form of receiving payments. Anything that improves economic welfare is a huge benefit for users. Unfortunately, the casino occupies a large market share, and we often overlook other benefits. However, at the same time, entering the casino also means access to significant liquidity, which people living in emerging markets cannot obtain. Cryptocurrency is leapfrogging fintech for emerging market populations. We just haven’t done enough work to highlight its unique use cases and support local developers. We have been in the decentralized finance space for many years, but not a single venture capital firm has attempted to invest in permissionless on-chain microfinance loans. Imagine if more venture capital firms were located in developing countries…
@nicnode commented: Look at how cryptocurrencies are used in Latin America and other emerging markets—actually saving many lives. Bolivia is currently experiencing a huge crisis, and the only refuge people have to ensure they can access their savings is cryptocurrency.
Péter Szilágyi: But they won’t use DeFi protocols, nor will they use Uniswap or NFTs.
@nicnode: Yes, they will in the future (some already are), but education (and simple translation) has a long way to go. In Latin America, most banks offer predatory loan rates, and DeFi solves this problem.
@vladlykhonis commented: On the funding side. Unfortunately, no one is funding anything "useful."
Péter Szilágyi: I’ve thought about this in comparison to the stock market. I agree that this part is necessary for "effective capital allocation." But the stock market is exactly the opposite: you have companies building utility, and the stock market provides them with funding. Cryptocurrency seems to be the reverse: we have a super-efficient way to allocate funds, but no utility to allocate it.
