Viewpoint: Cryptocurrency speculation is a function of the industry, not a flaw

Original Title: “Speculation: The Light Bulb Moment”

Author: Sterling Campbell

Translated by: Deep Tide TechFlow

Amid the noise and excitement surrounding meme coin casinos and infinite games, it’s easy to view cryptocurrency as mere speculation. Many refer to the recent bull market as a significant high-risk gamble, financial nihilism, and bubble software. While speculation indeed drives a lot of activity, categorizing it as a net negative for our industry is not comprehensive enough. Speculation and gambling may belong to the same family, but they are far from twins.

The feeling of a casino is far removed from reality. There are no clocks, and time seems to crawl like a snail. The floors are designed like a maze, making navigation or escape difficult. You are literally isolated from the real world, distracted by the arrival of jackpots and the screams of major winners (which is indeed much more interesting than posting screenshots of a Phantom wallet). Enjoy it all, but don’t let the clamor of the casino distract you from the potential of our industry.

Growing up in Las Vegas, I am no stranger to high-stakes gaming. I watched my hometown rapidly develop with the support of gamblers; in fact, we don’t pay state income tax because the casinos cover it all. I saw Las Vegas become one of the fastest-growing cities in America, attracting companies like Zappos and Gusto, becoming much more than just the "Sin City." I have grander ambitions for our industry.

Everything is Speculation

Speculation is not just the domain of high-risk investors or futurists; the structure of modern society is woven from threads of speculation.

Philosopher Søren Kierkegaard once observed, “Life can only be understood backwards; but it must be lived forwards.” From the moment we wake up, we engage in a process of constantly predicting and preparing for future events. Our morning commutes are based on speculation about traffic conditions and arrival times. The clothes we choose often reflect speculation about the weather or social interactions of the day.

In the workplace, project planning and resource allocation are based on speculative forecasts of market trends and consumer behavior. Even our social lives are influenced by speculation, as every left or right swipe on dating apps is filled with possibilities. This ongoing process of predicting and adapting to potential futures is so ingrained in our daily lives that we often overlook its pervasive impact.

We dance with uncertainty, leveraging our speculative abilities to navigate the complexities of modern life, shaping our reality. More importantly, behind uncertainty lie some of the greatest opportunities.

Speculation and Innovation

Throughout history, speculation has always accompanied humanity’s greatest technological advancements. Technological progress is often driven by visionaries committed to seemingly impractical or overly distant concepts, requiring upfront funding and immense foresight for development. For example, in the 15th century, the printing press did not achieve rapid success; it underwent decades of speculation about the transformative power of movable type and the democratization of knowledge. Similarly, the development of steam power in the 18th century was based on early speculative investments in coal mining, metallurgy, and engine design. These processes were not smooth.

Time and again, the most influential innovations come from brave individuals and organizations willing to bet on future outcomes, often after their efforts have yet to bear fruit or have experienced multiple failures. In the field of pharmaceutical development, the story of penicillin illustrates how even accidental failures can lead to revolutionary breakthroughs. Alexander Fleming’s discovery stemmed from his observation that mold contamination in a petri dish killed surrounding bacteria—this was a “failure” in his original experiment, yet it led to one of the most important medical discoveries of the 20th century. It is foolish to blame any number of failures without acknowledging the role they play in our great successes.

Take the .com boom as an example; this period saw a loss of $1.7 trillion in value from March 2000 to October 2002. One could easily point to Pets.com or any other example from the ensuing speculative frenzy, but doing so misses the point. The .com bubble laid the groundwork for the modern digital economy, e-commerce, and social media platforms that we now take for granted (which took decades to build). When you zoom out, the value loss during that time is merely a footnote.

In Cryptocurrency, Speculation is Good

Given that speculation is a fundamental aspect of human experience, and there are clear examples over the past decade showing that rampant speculation has driven innovation and growth, it is foolish to reduce the entire cryptocurrency industry to meaningless high-risk gambling. No one cares about Thomas Edison’s 1,000 failures or any ultimately fruitless paths he took; today, there are 8 billion light bulbs in the world.

An excessive focus on current failures obscures the bigger picture. Success stories in cryptocurrency are already unfolding, with Bitcoin’s market cap surpassing $1.2 trillion and other cryptocurrencies adding another trillion. Considering that gold is a $15 trillion asset, there remains vast opportunity ahead, and any failures or missteps appear relatively insignificant in comparison. In fact, aside from Bitcoin, the overall value of cryptocurrencies could drop to zero, and we would still have a massive venture capital opportunity on our hands (hint: we won’t drop to zero). Bitcoin has entered the vocabulary of the average person, and due to its simplicity, immutability, and universality, it will continue to serve as the North Star of the industry for the foreseeable future.

A variety of things must be tried, funds must be burned, and people must experience failures to arrive at the light bulb moment. The good news is that as Bitcoin’s global adoption rate continues to rise, demand is steadily increasing over time (even though many are doing their utmost to stifle this industry), and we are moving in the right direction.

You might wonder, “Well, Sterling, how does buying Smoking Chicken Fish contribute to the overall value proposition of cryptocurrency?” Or “Hey, Sterling, isn’t Solana just a meme coin? How is it so valuable?” Or “Sterling, my wife told me that the youthful vitality she fell in love with died years ago; can you help me?”

First, part of the allure of cryptocurrency has always been tied to infinite games, which may remain constant in a synchronized community led by the internet. These speculative games always attract the most attention, and Bitcoin’s main appeal has consistently revolved around its ability to redistribute wealth to anyone willing to believe in its long-term value proposition. This is a feature, not a flaw.

This speculative behavior extends to every crypto cycle. In the last cycle, we saw NFTs take the world by storm, with people exploring various ways to verify behavior and ownership. The bottleneck for innovation ultimately lies in infrastructure, as gas fees deter many early adopters, and the friction of entry brought real tears to my parents. Unworkable infrastructure has severely impacted the industry, as emerging business models incentivized rug pulls, with only a few developers able to realize the grand vision that NFTs offered. There are indeed scams, but there are also many sincere attempts to leverage this technology, and the story of verifiable fan culture is far from over.

I hope the era of these individuals has ended.

Memecoins are not only a superior form of speculation due to their broader distribution, lower prices, and more easily understood value propositions, but they also test the infrastructure improvements in cryptocurrency over the past few years, with all systems running quite smoothly.

Considering that many institutions hesitate to engage with this technology primarily due to its unreliability or lack of the “Lindy effect,” the seamless activity we see across many ecosystems is a necessary step in understanding how robust our infrastructure is. Similarly, those early users unafraid to put $15,000 on-chain and lose it in various ways are extremely valuable pioneers for us to develop solutions for the average person.

The emergence of stablecoins has had a profound impact on decentralized finance (DeFi), but it has also experienced its own penicillin moment, enabling people in many emerging markets to access dollar-denominated savings accounts, avoid high costs of cross-border payments and remittances, and enter global markets. The global remittance market is valued at $740 billion; these are huge opportunities with clear paths to success.

For Yellow Card—Africa’s most popular exchange, with monthly trading volumes exceeding hundreds of millions—their users are not buying memecoins but are primarily trading Naira and Dinar for more stable USDC or USDT. This behavior has also extended to Southeast Asia and Latin America, where inflation and hyperinflation plague these regions, and traditional dollar usage is restricted.

Payments provide a similar breathing space, helping small businesses escape the oppression of the financial system. Companies like Blackbird largely abstract the “cryptocurrency” part, as restaurants around the world choose to use them because they help save transaction costs and reduce customer acquisition costs (CAC) for diners seeking rewards. Meanwhile, TYB offers a refreshed perspective on loyalty, rewarding consumers for participation beyond just spending amounts. These companies have seen significant improvements in conversion rates, spending, and user retention compared to traditional counterparts, and we are beginning to see real adoption of crypto infrastructure that transcends typical “crypto” users. When networks succeed, they become extremely valuable, and the winners experimenting in these verticals will achieve tremendous success.

Prediction markets leverage speculative behavior to better incentivize truth in voting, with companies like Polymarket nearing $500 million in trading volume this month, beginning to gain mainstream success. Drift has also recently added prediction markets on Solana, and we will soon see Blinks embedded whenever anyone argues on the network.

The path to tokenization will pave the way for categories that may seem silly at first glance, as you realize that everything could mean anything—from carbon credits to ETFs, to whiskey, recipes, and cattle. Nevertheless, we are making significant strides toward this mission, as Securitize partners with Blackrock to launch BUIDL, bringing their first tokenized fund to market. Even early funds like BCAP have undergone tokenization because things must be tried, and the game must go on (sorry, I refuse to use the term “arena”).

Outside the Casino

A long-standing online user base is prone to highly emotional fluctuations, and sensational media are waiting for the next opportunity to unveil the madness of our industry, so I don’t blame people for feeling frustrated or negative when witnessing recent activities. The essence of cryptocurrency is to disrupt the existing financial system; you should feel that the world around you is collapsing, and absurdism often accompanies closely. The good news is that you can also play a key role in the solutions. Many ideas are being tried, and many of them are destined to fail. That’s just how it is.

Crypto casinos may seem like a pixelated punk and dog-themed fever dream, but behind this meme-driven madness lies the potential for real transformation. So whether you’re here for the technology, the profits, or because your wife’s boyfriend told you Bitcoin will rise to $100,000, we just need one light bulb moment.