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Five Things Messari Got Wrong In Their Prodigious 2023 Crypto Theses

Validated Individual Expert

On Dec. 26, I published “10 Highlights From Messari’s Prodigious ‘Crypto Theses for 2023,’” because, as I wrote, the 157-page report is simply “the industry’s most impressive overview of the crypto ecosystem, and a must-read for any crypto enthusiast.” That said, I have glaring differences with some of the views Ryan shared. Those differences don’t detract from of the awesomeness of Messari’s theses. In fact, part of the awesomeness is all the conversation the report engenders.

Below are the five major differences I have with the 2023 theses:

#1 Selkis’ Biggest Focus Remains On Regulations

While a favorable regulatory environment would be helpful, if crypto can be crippled by regulations, then it’s not the decentralized game changer we all think it is. And if it can’t be crippled by regulations, then why is the regulatory section, at 23 pages, the longest section in the theses by 20%? The word “regulations” and variations appear on 51 pages, vs. 31 for “Bitcoin” and 27 for “Community”.

While I applaud and support the work of Coin Center and others trying to shape a favorable regulatory environment for Web3, it’s happening regardless of what the regulators do. And the more the U.S. regulators and politicians try and stop it, the more it will move offshore to friendlier regulatory environments.

#2 Ryan Has Only A Modest Interest In “Community”

I think crypto is ALL about community. I think valuation metrics in crypto will be deeply community driven. In the web3 world, community is the new oil. It powers EVERYTHING!

Crypto’s biggest problems are not regulatory. The biggest problems crypto has to solve are token economics and governance & consensus. Yet “Community” gets just 50% of the mentions that regulations do in the 2023 Theses. And when Community does get mentioned, it’s mostly surface level mentions in the context of “treasury management” or a broad reference to the “crypto community” or the “Ethereum community.”

After page 13 of the Theses, there are more than 50 pages without one single reference to community. Ryan than talks about the Solana community “eating glass” in the last downturn, without a mention of the massive excesses of that community as it ballooned. Now I have nothing against people in the community for the money. But when the money leaves, they leave, and that’s the story of Solana today.

Ecosystem summits are the best way to get a deep sense of a community. My 2022 highlights included ETHDenver, ETHcc (in Paris), Solana’s Breakpoint, NEARCON, and Celo Connect.

#3 Selkis Thinks Central Bank Digital Currencies Are Dystopian. I Agree. But CBDCs Could Onramp Billions

In Section 5, the “Top Trends In 2023”, Ryan has a section titled “CBDCs & Dystopia”. Obviously, we allI get the surveillance capabilities of CBDCs and the ability for the state to monitor them or confiscate them. And that’s horrific! But that monitoring and confiscation abilities are similar to how the current global banking system works. IMHO, the major difference between Swift, which enables the United States government to control the global banking system, and CBDCs, is that Swift is controlled by just one government (the U.S.), while every government can have their own CBDC. And for most countries in the world, an alternative to a U.S. controlled Swift is highly desirable. Even if it’s controlled by China.

But what CBDCs can offer that Swift can’t, is that the traditional banking system is not on-boarding people to digital currencies. Meanwhile, the Chinese CBDC had over 250 million users as of January 2022. They all learned how to use a digital wallet. And that’s a GREAT thing, not a travesty.

#4 Ryan Is Too U.S. Centric

Ryan states that he’s “ … mega bullish on America and its ongoing leadership in tech, finance, and crypto”. Are we really leading the way in crypto? I spend about 30% of my time outside the U.S., and crypto is rocking in many countries around the world as the U.S. remains mired in a devastating crypto winter.

I recently got back from Token 2049 in Singapore, and it was awesome! Singapore has a very accommodating regulatory environment, leading to Singapore’s emergence as the major crypto hub in Asia post China’s crypto clampdown. But Singapore doesn’t rate a single mention in the theses?

Other major crypto hubs like Dubai and Lisbon also get zero mentions. Paris gets no mention. Vietnam has the highest crypto adoption in the world, but doesn’t rate a single mention. I went to the launch of CryptoMondays Saigon in October. Saigon deserves a mention.

#5 — Ryan Is Bearish On GameFi. I’m Bullish

I also get that Axie Infinity isn’t “fun”. I get that Axie Infinity fees have fallen from $15M a day to near zero. But other games, like Splinterlands, are fun, and are still generating meaningful revenue. But while Ryan states that he’ll “ … invest as much as possible in the first actually fun franchise at a higher valuation and pay for the de-risked assets then”, he won’t. He’ll feel he missed it. And he will.

#6 Special Bonus. New Words And Phrases Learned Via The Theses

DePIN: Decentralized physical infrastructure networks (DePIN, or “token-incentivized”). Things like file storage, wireless access, and cloud computing require lots of capital ex and operational prowess. Tokens have proven effective at catalyzing the development of these networks as they coordinate decentralized hardware investment at scale.

Cunningham’s Law: states “the best way to get the right answer on the internet is not to ask a question; it’s to post the wrong answer.” The concept is named after Ward Cunningham, the inventor of wiki software.

Overton Window: Named after American policy analyst Joseph Overton, it’s the fact that an only ideas that fall within a specific range are politically viable. Outside that range is considered to too extreme to be viable given the climate of public opinion at that time.

Veblen Good: Is a type of luxury good for which the demand increases as the price increases

Teledildonics (aka Cyberdildonics): Is the term for virtual sex encounters using networked, electronic sex toys to mimic and extend human sexual interaction.

Again, kudos to Ryan and the entire Messari team on an other masterpiece!

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