Have Crypto Assets deviated from their value? Is Trump good or bad for the crypto industry?

Crypto Assets will take on a new mission: to save the internet.

Written by: Blockworks

Compiled by: Tao Zhu, Golden Finance

"Missionaries build better products." — Jeff Bezos

Question: Do we need a new internet?

In the past, the business model on the internet was simple: create content, attract traffic, and sell advertisements.

However, you can now typically obtain more accurate aggregated information from a large language model, which sends a bot to visit these websites on your behalf.

Soon, most of the traffic on the internet will come from robots, and therefore will not be affected by advertisements (and unfortunately, they have no interest in subscribing to newsletters either).

This could break the business model of the internet: the best search results now come from artificial intelligence language models, but these AIs obtain information from content created by humans, and if content creators are unable to get paid, this content may soon cease to exist.

As more and more online traffic becomes "proxy-based" — that is, automated, machine-based, and unprofitable — the incentive mechanisms that fill the entire network with information begin to collapse.

However, Ben Thompson proposed an ambitious solution: to create a whole new network economy where AI agents pay for the information they retrieve - and with Crypto Assets!

Thompson believes that "building a completely new content market" is possible, but it requires a new protocol layer that includes "a mechanism for payment through crypto assets (such as stablecoins)."

Unlike existing network protocols, this new protocol will allow language model providers like OpenAI to "build an auction mechanism to pay them based on the frequency with which their content sources are referenced in AI answers."

Thompson stated that this "is not only the best way to keep the network vibrant, but also the best way to create better and more practical AI in the process."

However, creating such a "proxy" version of the World Wide Web—and achieving internet-native payments—is no easy task.

Thompson is enthusiastic about "MCP as a protocol layer" (a machine-to-machine version of HTTP) and "NLWeb as a markup layer" (an HTML for language models).

HTTP and HTML took years to become the global standards for web traffic, so I'm not sure if we will see MCP and NLWeb anytime soon.

But if we really see it, Crypto Assets will take on a new mission: to save the internet.

Question: Have Crypto Assets deviated too far from their value?

In a recent discussion with Epic Games founder Tim Sweeney, Lex Fridman pointed out that Crypto Assets are a "very powerful technology," but also "frustrating," because "many people use it to make money—creating bubbles, speculation, and memecoins—[to the point that it] deviates from... something valuable."

Even in the Crypto Assets space, many people feel frustrated like him—mainly because memecoins still account for a high proportion of Crypto Assets activity and awareness.

(True Bitcoin users do not even recognize Ethereum, let alone Fartcoin.)

But Fridman's own definition of value is quite similar to that of a memecoin: "The appearance of your outfit in Fortnite can prove its value."

That's right! One of the major advantages of Crypto Assets is that it allows you to own this outfit, rather than just borrowing it from Epic Games.

But to have something digital, it must be tradable, which triggers speculative behavior.

Friedman seems dissatisfied with this—he hopes that Crypto Assets can create a "standard definition of currency" but should not "turn it into a speculation."

This requires striking a balance (if you want this "thing" to be permissionless, then it's simply impossible).

"People try to make money by buying and selling, rather than sticking to things that have real value," Friedman complained, noting that his five-hour podcast has surely made him quite a bit of money.

"Forget about money," he suggested. "It's more about exchanging valuable experiences."

Of course, buying and selling things is a time-honored way to make money.

However, aside from this point, how can we make "valuable experiences" exchangeable without allowing people to buy and sell?

You may not be able to do it: making everything tradable will only make everything speculative.

I think this is a characteristic of encryption, but many people see it as a flaw, which is understandable.

Question: Is Trump unfavorable towards Crypto Assets?

There are pros and cons.

The good news is that Bitcoin has reached a new historical high today, the U.S. Securities and Exchange Commission (SEC) has turned from an opponent to a supporter, legal fees in the Crypto Assets industry are expected to decrease by about 99%, stablecoins may soon gain legal recognition, and we might even see a market structure bill at some point.

But this does not truly reflect the profound conceptual shift we have experienced: The Economist pointed out last week that the Crypto Assets industry "suddenly found itself at the center of American public life"—which sounds a bit surprising.

Unfortunately, they did not see this as a positive.

On the contrary, The Economist warns that "the Trump family's enthusiasm for Crypto Assets makes it harder for the industry to gain sufficient support in Congress," and that "Mr. Trump’s passion for Crypto Assets may ultimately bring more harm than good to the industry."

I am not sure how to quantify "the disadvantages outweigh the advantages" because its arguments mainly revolve around politics. If Trump loses, the political support for Crypto Assets will be much less.

But I do wonder, if Crypto Assets are forced to develop in a hostile environment, will it ultimately be better - we might end up with more censorship-resistant Crypto Assets and fewer meme coins.

Of course, counterfactuals cannot be proven, but The Economist's argument is correct, and it is not unimaginable that single-issue Crypto Assets voters may have cast the wrong vote.

Q: Is ideal still important in the Crypto Assets field?

Today, the driving mission of Crypto Assets seems to have weakened: centralized exchanges, centralized stablecoins, Bitcoin "fund companies", BlackRock ETFs - these major driving forces of Crypto Assets have drifted away from Bitcoin's encryption punk roots.

A blogger summarized: "Bitcoin was supposed to be a rebellion. However, it has been redesigned by the 'empire'."

But perhaps the mission of this resistance is changing?

Crypto Assets in the past focused more on building permissionless software and de-intermediating dark intermediaries like central banks and social media companies.

Now, it focuses more on creating profitable startups without permission.

In the past, we no longer emphasized DeFi Lego blocks, aiming for cooperative composability, but now we are facing intense competition—such as pump.fun establishing an exchange to capture Raydium's profits, while Raydium has set up a launch platform to seize pump.fun's profits.

This may not be a bad thing, it's just different.

Or, if you like startups, this is even better.

"The current Crypto Assets are very different now," Ryan Connor said approvingly. "Crypto Assets have builders who are truly business-oriented and do not hold any ideology."

In his view, not holding onto an ideology is a good thing: "In the past, some people had to decentralize everything to the maximum, and they lacked experience in successfully starting a business, or they lacked a true understanding of what is essential to winning the market in Web2."

I know that Web2 should be the bad guys.

But this is a normal evolution of an emerging industry - just like when Red Hat created a for-profit enterprise industry on top of open-source Linux.

In the field of Crypto Assets, old-school theorists can continue to build open-source, decentralized, censorship-resistant applications and blockchains—while emerging startups can build businesses on top of that.

Perhaps a compromise can also be found here, because as Jeff Bezos said, "Missionaries build the best products."

I believe that you don't have to be a crypto punk to build Crypto Assets, but you must believe in something — even if that something is just a sellable product.