On August 31, 2023, Ari Paul, the Chief Funding Officer and Founding father of BlockTower Capital, engaged in a public critique of Coinbase CEO Brian Armstrong’s imaginative and prescient for the way forward for cryptocurrency. Armstrong had not too long ago tweeted about ten key alternatives he believes are ripe for innovation within the crypto area. These areas embody a decentralized cryptocurrency pegged to the Shopper Worth Index (CPI), a blockchain-based popularity system akin to Google’s PageRank however for crypto addresses, decentralized promoting by sensible contracts, a decentralized methodology for startups to boost funds globally, a market for labor the place duties could be posted and paid for in cryptocurrency, optionally available privateness options for Layer 2 options, a totally decentralized on-chain peer-to-peer trade, video games with in-game gadgets as NFTs, tokenizing real-world property like debt and commodities, and software program instruments for managing small communities that would evolve into self-governing entities.
Paul, whereas acknowledging Armstrong’s important contributions to the crypto trade, provided a nuanced critique of those ten alternatives. He argued that the idea of flatcoins, or cryptocurrencies pegged to secure values just like the CPI, was not significantly novel and urged entrepreneurs to deliver “an thought for one thing 10x higher.”
He was extra skeptical about on-chain popularity methods, labeling them a “dead-end for at the very least 5 years” and cautioning that they might result in monetary losses. On-chain promoting was attention-grabbing however fraught with “massive tech stack & UX friction,” based on Paul.
He agreed with Armstrong as regards to on-chain capital formation, calling it a “pure match for cryptocurrency.” Nonetheless, he dismissed the concept of a world job market paid in cryptocurrency as not inherently associated to crypto, suggesting as an alternative that including crypto funds to current platforms like Mechanical Turk would suffice.
Paul additionally emphasised the challenges in monetizing privacy-related options in Layer 2 options however famous the humanitarian advantages of such instruments. He lamented the underfunding of peer-to-peer exchanges, calling them a “core and demanding a part of the cryptocurrency worth proposition.”
On the subject of on-chain video games and NFTs, Paul admitted to being overly optimistic previously however remained excited concerning the sector’s potential. He was passionate about tokenizing real-world property, calling it his “favourite theme.” Nonetheless, he was much less bullish on the concept of instruments for community states, though he acknowledged their potential for enterprise coordination.
Paul concluded by admitting that he agreed with Armstrong on extra factors than he initially thought, stating, “My headline tweet [was] slightly deceptive.” His critique serves as a reminder that whereas the crypto trade is ripe for innovation, not all proposed paths maintain equal promise. His feedback underscore the necessity for crucial analysis and debate because the sector continues to evolve.
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