Written by: Zeus Compiled by: Block unicorn
Preface
In recent articles, I explored how cryptocurrencies deviate from their original vision, prioritizing infrastructure innovation while neglecting the monetary foundation needed to fulfill their financial sovereignty promise. I traced how this deviation led to a disconnect between technological achievements and sustainable value creation.
What I have not fully explored is how the industry fundamentally misjudged which applications are truly worth developing. This misjudgment is at the core of cryptocurrency's current predicament and points to the direction where real value might ultimately emerge.
Illusions of the Application Layer
Cryptocurrency narratives have gone through several stages, but one consistent theme has been the promise of revolutionary applications beyond finance. Smart contract platforms positioned themselves as the foundation of a new digital economy, with value flowing back from the application layer to infrastructure. This narrative accelerated with the "Fat Protocol Theory" - which argued that unlike TCP/IP capturing little value on the internet while Facebook and Google capture billions, blockchain protocols would accumulate most of the value.
This formed a specific mental model: Layer 1 blockchains (L1) gain value by supporting a diverse application ecosystem, similar to how Apple's App Store or Microsoft's Windows create value through third-party software.
But there is a fundamental misjudgment here: Cryptocurrencies are trying to impose financialization on domains that are not naturally applicable, and these domains offer almost no real value enhancement.
Unlike the internet, which digitized existing human activities (business, communication, entertainment), cryptocurrencies attempt to inject financial mechanisms into activities that neither need nor want them. The assumption is that everything from social media to gaming to identity management would benefit from being financialized and "on-chain".
Reality is quite different:
Social applications with tokens have largely failed to achieve mainstream adoption, with user engagement primarily driven by token incentives rather than underlying utility.
Gaming applications continue to face resistance from traditional gaming communities who believe financialization weakens rather than enhances the gaming experience.
Identity and reputation systems struggle to demonstrate clear advantages over traditional methods when token economics are involved.
This is not just a "we are still early" problem. It reflects a deeper truth: The purpose of finance is as a resource allocation tool, not an end in itself. Financializing activities like social interactions or entertainment misunderstands finance's core role in society.
[The translation continues in the same manner for the entire text, maintaining the specified translation rules for specific terms like Block, TRON, UNI, RON, and ONG.]This divergence may be the most severe wrong turn in the industry. Instead of building more complex capabilities on the monetary innovation of Bitcoin, the industry turned to financializing everything else—a regressive approach that misdiagnosed the problem and solution.
The Way Forward: Return to Currency
In my view, the path forward is to reconnect the significantly improved technological capabilities of blockchain with its original monetary objective. Not as a universal solution to all problems, but by focusing on creating better currency.
Currency fits perfectly with blockchain for the following reasons:
Trustlessness is crucial: Unlike most other applications that require external enforcement, currency can operate entirely in the digital realm, with rules enforced solely by code.
Native digital operation: Currency does not need to map digital records to physical reality; it can exist natively in the digital environment.
Clear value proposition: Removing intermediaries from monetary systems can bring true efficiency and sovereignty advantages.
Natural connection with existing financial applications: The most successful crypto applications (such as trading, lending, etc.) are naturally linked to monetary innovation.
Perhaps most importantly, currency is fundamentally an infrastructure layer upon which everything else is built without deeply engaging with it. Cryptocurrency has disrupted this natural relationship. The industry has not created a currency that seamlessly integrates with existing economic activities but instead tries to rebuild all economic activities around blockchain.
The power of traditional currency is embodied in this utilitarian layer approach. Businesses accept dollars without understanding the Federal Reserve. Exporters manage currency risks without rebuilding their entire business around monetary policy. Individuals store value without becoming monetary theory experts. Currency facilitates economic activity, not dominate it.
On-chain currency should operate in the same way—providing a simple interface for off-chain businesses to use, just like digital dollars can be used without understanding bank infrastructure. Businesses, entities, and individuals can remain completely off-chain while leveraging the specific advantages of blockchain-based currency—just as they use traditional banking infrastructure today without being part of it.
Instead of trying to build "Web3"—a vague concept attempting to financialize everything—the industry will find more sustainable value by focusing on building better currency. Not just as a speculative asset or inflation hedge, but as a complete monetary system with mechanisms that make it reliable under different market conditions.
This focus becomes even more compelling when we consider the global monetary landscape. The evolution of the global monetary system faces unprecedented coordination challenges. The inherent instability of the current system and increasingly intense geopolitical tensions have created a genuine need for a neutral alternative.
The tragedy of the current landscape lies not only in misallocated resources but also in missed opportunities. While incremental improvements in financial infrastructure are indeed valuable, they seem insignificant compared to the transformative potential of addressing the fundamental challenges of currency itself.
The next stage of cryptocurrency's evolution may not be through further expanding its scope, but by returning and realizing its original objectives. Not as a universal solution to all problems, but as a reliable monetary infrastructure that provides a solid foundation for everything else—without needing to deeply contemplate its workings.
