The road to Decentralization is difficult! Entrepreneurs in the encryption industry face a dilemma: to stick to their ideals or compromise?

The foundation of the public Block is laid by Cypherpunk. Although the encryption industry is destined to give birth to a variety of ideas and practices, the principles of Decentralization, Open Source software, cryptography security, privacy, and self-sovereignty are the basis of its most subversive achievements. However, there is a problem: due to the lack of a regulatory framework that promotes innovation and legalizes the Block as an infrastructure with unique functionality, encryption entrepreneurs face a difficult choice: to adhere to the spirit of purity, thereby greatly complicating the structure and operation of their project, or to compromise on the original ideals in exchange for the support of regulatory authorities and more traditional mainstream adoption. I call it the dilemma of encryption entrepreneurs.

Since its inception, the Block chain has been associated with grand ambitions: the separation of currency and state, uncensored global payments and coordination networks, software services without single points of failure, and new forms of digital organization and governance. Communicating such revolutionary ambitions requires a special environment, and for encryption currencies, the aftermath of the global financial crisis and the evolution of data and business models of large tech companies provide this environment. Coupled with the global adoption of digital technology and the built-in incentive mechanism of tokens, encryption currencies have had an almost perfect way in the early development of the ecosystem. Since then, the growth of social and financial capital of individual Block chain networks and the entire industry has made encryption currency a force to be reckoned with, as evidenced by its prominent role in the 2024 US presidential election.

Revolutionary ambitions still require courage and innocence. Attempts to disrupt any social structure, especially those based on law, often end in failure. encryption currencies harness the public's dissatisfaction and aim it at incumbent institutions, but this posture is always difficult to reconcile with the goal of building a digital platform that serves a huge global user base. Similarly, transactions based on the Block chain bypass regulatory requirements in various jurisdictions where underlying infrastructure operators or traders are located, making it vulnerable to crackdowns by local law enforcement agencies. The ultimate cost of the growth of encryption currencies is the normalization of regulatory status and everything it brings. Applying a famous saying: You may not be interested in the government, but the government is interested in you.

While most of the regulatory content is still in flux, this is what we are seeing in practice. From taxing encryption-related activities and classifying tokenized assets to enforcing anti-money laundering/counter-terrorism financing rules and holding legal responsibility in DAO governance, encryption currencies are gradually being incorporated into existing regulatory systems centered around national jurisdictions. However, more importantly, this process also includes the formulation of new precedents and regulatory frameworks, which are the main battlegrounds to ensure that the original value of encryption currencies is not destroyed in ideological and political struggles, struggles that will determine the balance of power among the various stakeholders involved. The dilemma of encryption currency entrepreneurs exists because, like any innovation activity that can have far-reaching impacts, the process of legalization is slow and controversial. This is particularly challenging for encryption currencies because the actions of some unscrupulous speculators have led to various misunderstandings about the industry from the outside.

Another factor worth emphasizing is the increasing integration of Blockchains with more traditional business and financial models. For those who view encryption currencies as a parallel system aimed at competing with or replacing traditional institutions, blurring the boundaries between the two is the source of cognitive dissonance and internal conflict. For others, this is a sign of success, and it is also the only sustainable path for Blockchain to become a critical infrastructure of the system. With the maturity of the encryption industry and the reduction of risks, builders, operators, and user communities will also grow and diversify. Although this makes encryption currencies an attractive market for traditional enterprises beyond the initial value proposition, it will further amplify the narrative ambiguity of encryption currencies, especially when combined with various forms of institutionally controlled infrastructure. This is a long-standing threat that will increase proportionally with the continued adoption of encryption currencies.

So, how to properly describe the relevance of encryption currency entrepreneurs in the next stage of the adoption curve as public blockchain? On the one hand, the mainstream success of encryption currency seems to depend more on close integration with existing systems rather than adhering to some idealized and all-encompassing concept of decentralization. Most 'encryption projects' will eventually integrate with traditional enterprises or open source software projects, or most blockchain users are unlikely to internalize the cypherpunk spirit to the extent that it becomes a major factor guiding their consumption choices, and this is not blasphemy. Ultimately, decentralization should not have any particular benefits, and there is no controversy in centralized enterprises using and operating public blockchains, at least as long as these systems remain open, verifiable, and more flexible than other alternatives. Therefore, once the regulatory status of encryption currency is fully clarified, this dilemma becomes irrelevant for most entrepreneurs. Please provide a source text to be translated. However, if we conclude that the end of the original vision is here, that's wrong. Technologies such as autonomous robots and artificial intelligence are bringing new and far-reaching challenges to the digital revolution, and the demand for powerful computing and information management services has never been so urgent. Blockchain, as an innovative platform, can provide an alternative to old systems that are susceptible to corruption, mass surveillance, and single-point failures. Only when a large number of entrepreneurs and supporters insist on embarking on the difficult path of building a truly decentralized, enhancing privacy, and anti-censorship system, can blockchain continue to exist. Although the commercial success of encryption currency no longer depends on it, its long-term social legacy certainly does.

[Disclaimer] There are risks in the market, and investment should be cautious. This article does not constitute investment advice. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific situation. Investing on this basis is at your own risk.

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Original author: Mario Laul

'The Difficult Road of Decentralization! Encryption Entrepreneurs Face Dilemma: Stick to Their Ideals or Compromise?' This article was first published in 'Encryption City'.