Original Title: "Computer vs. Casino: Crypto's Culture War"

Original Author: RICHARD CHEN, GP 1confirmation

Translated by: Jaleel, BlockBeats

Editor's note:

In this article, RICHARD CHEN brilliantly explores the cultural war currently facing the cryptocurrency industry, analyzing the two major factions in the industry - the "cryptographic computing faction" and the "cryptocurrency casino faction" - and explaining how this division came about. The article not only analyzes the current situation, but also proposes specific solutions, suggesting that the industry shift from a zero-sum game to creating more positive experiences.

With the help of Steve Wynn's success in the Las Vegas casino business, the author points out areas where the cryptocurrency industry can learn, namely focusing on experiences beyond gambling, providing new perspectives and thinking for the future development of the cryptocurrency field. BlockBeats has translated the original article as follows:

Undoubtedly, for any OG in the encryption industry, the culture of this industry has undergone significant changes in the past year.

There is a cultural war emerging among the builders of the encryption community, which is a conflict between the early purists (the encryption computer faction) and the later tourists (the encryption casino faction). I will explain the positions of these two political factions and how we have come to this conflict today, and then outline a detailed path forward for the encryption industry to resolve its cultural war.

Encryption Computing Faction

People in this industry believe in the ideal of Satoshi Nakamoto, the founder, which is to decentralize power from corrupt institutions to the people.

They tend to be people who entered the cryptocurrency industry early. In 2013, a group of people were mainly currency libertarians who were attracted to Bitcoin as a hedge against reckless monetary policies. For these staunch Ron Paul gold bugs, Bitcoin would be a liquidity sponge to absorb the excess printing of Federal Reserve currency.

Translator's note: "Ron Paul gold bugs" refers to those who staunchly support the views of former US Congressman Ron Paul, who is known for his support of the gold standard and criticism of the Federal Reserve system. His followers are known as "Ron Paul gold bugs." These individuals typically believe that a gold standard or similar financial system can provide a more stable and reliable store of value, particularly in the face of currency devaluation and central bank monetary policies.

In this context, Bitcoin is seen as a "liquidity sponge," absorbing the excess liquidity in the economy resulting from the Federal Reserve's excessive printing of money. In other words, for these "Ron Paul gold bugs," Bitcoin is a tool to resist traditional financial systems and central bank policies, especially as they believe these policies may lead to currency devaluation and economic instability.

A group of people in 2017 (I am part of this generation), mainly consisting of technical personnel, were attracted to encryption as a new computing paradigm. Ethereum demonstrated the potential of decentralized applications (dApps), allowing you to not only read and write data, but also own them. This led to the concept of web3 and the decentralization of large technology companies and gatekeepers of the internet.

Today, these two groups represent the silent majority who still believe in the vision of Satoshi Nakamoto and hold an optimistic attitude towards new use cases and products that drive the industry forward. However, at the same time, they are afraid to speak out any negative words about the current popular Ponzi scheme that affects influencers, for fear of being attacked by online mobs. Therefore, they remain silent.

Encryption Casino Pai

People in this camp cynically believe that encryption is nothing more than a decentralized casino and they want to maintain this status quo. The goal is to add more rooms to the casino by finding new and creative ways to hyper-financialize everything and engage in speculation - whether it's speculating on a friend's net worth using a mobile phone or speculating on shitcoins using Telegram bots.

Most of them are people who entered the cryptocurrency industry in the later part of 2021, coming from trading and financial backgrounds. They are a very outspoken minority, adept at cultivating interactions on Twitter. As a result, they dominate online discourse and create tension between early purists and later "tourists," much like nativists harbor resentment towards immigrants who do not assimilate and change the culture.

Most of them are still very young. My hypothesis is that this is the "second-order effect" of zero interest rate policy (ZIRP) lasting for ten years and the failure of the traditional financial system to the millennial and Z generations. Young people increasingly feel that they need to get rich quickly to repay student loans and afford mortgage loans. When people feel that they are always trapped in intense competition, they will turn to casinos and try to get out of trouble through gambling.

How did all of this happen?

The casino is very useful for guiding use. This is because degens are early adopters. They have a risk tolerance to become beta testers of unproven financial products. Outsiders easily overlook degens, but they are the lifeblood of encryption. They are blue-collar workers in the trenches, trying every new product firsthand.

During the bear market of the cryptocurrency industry, there were no new users entering the field. Applications struggled to increase their user base and were forced to focus on their existing degen strong user base. In the short term, this is feasible as trading volume is mainly driven by strong users. For example, the top 2.2% of OpenSea users are responsible for over half of its trading volume.

However, when the project becomes cynical and believes that mainstream adoption is impossible, problems arise. With the mentality that encryption will never surpass the early degen, the motivation is to accelerate the degradation of blockchain technology and design zero-sum applications like casino table games. Therefore, we see Ponzi economics, multi-level marketing plans, and the disgusting parts of finance.

The Ponzi scheme has short-term product market adaptability, because there will always be thousands of crypto natives, known as degen, as the core group, who will gamble on every new shiny speculative application. This creates a financial engineering zero-sum money game culture, where some influencers appear to attract unsuspecting retail users to buy, only to sell later. That's why so many people are desperately cultivating interactions on Twitter and becoming influencers, because only then will the casino's odds be in their favor. In the casino, influence is a profitable business model.

Outside of the casino, catering only to degens is something that is off-putting to anyone not involved in the degenerate bubble. I don't blame the average consumer for disliking cryptocurrency and NFTs. Every time they hear about them in the news, it's associated with greed, Ponzi schemes, and unsavory characters on the internet. Designing zero-sum applications makes more people unwilling to enter the crypto space and use on-chain products.

We need to consider methods to grow the user base of cryptocurrencies, similar to Bitcoin ETF. Bitcoin ETF is a breath of fresh air in this field, as it allows trillions of dollars of retirement savings that previously couldn't access cryptocurrencies to finally enter Bitcoin for the first time.

However, how can we truly achieve mainstream adoption?

Lessons Learned from the Casino

I met Steve Wynn in October, who shared with me his experience in developing hotel and casino businesses. One unique insight he had was to focus on experiences beyond gambling. Las Vegas used to be a place where people only came to gamble and then left without any other reason to stay.

Considering that nowadays every Las Vegas casino offers concerts, performances, celebrity chef restaurants, luxury shopping, and more, it may sound crazy. But when "The Mirage" opened in 1989, it was a counterintuitive move, and its success quickly forced other casinos to invest in high-quality facilities and entertainment, not just gambling.

In the 1990s, Steve Wynn played an important role in transforming the Las Vegas Strip from a destination centered around gambling to a world-class entertainment and leisure destination. Excellent hospitality made the Las Vegas experience no longer a zero-sum game and significantly increased the number of visitors to Las Vegas each year for various reasons.

Obviously, the encryption industry can learn a lesson from this. We need to reduce zero-sum desktop games and increase more positive-sum experiences.

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