Ethereum (ETH) core developer Peter Szilagyi is disappointed with the crypto industry, advocating for actual value in a sector that can be so much more.

The crypto industry has come a long way since its inception, from the creation of Bitcoin to the development of various blockchain projects and applications. There are still challenges, but the industry keeps growing and changing, guided by goals of decentralization, transparency, and financial empowerment.

How Crypto Started and How It’s Going

The ethos behind crypto was to provide a decentralized and secure alternative to traditional currency and financial systems. The potential for blockchain technology to disrupt various industries and empower individuals with financial sovereignty was the main goal.

In the early years, the focus was on building the infrastructure for cryptocurrencies and exploring their potential use cases. Bitcoin gained popularity as a digital currency and store of value, while Ethereum introduced smart contracts, enabling developers to build decentralized applications (dApps) on its blockchain.

The industry has seen quick growth, with new projects and tokens entering the market, fueled by the initial coin offering (ICO) boom of 2017. However, the ICO craze also brought about challenges, as many projects turned out to be scams or failed to deliver on their promises.

Read more:  Crypto Scam Projects: How To Spot Fake Tokens

This led to concerns about investor protection and regulatory oversight. The industry now faces scrutiny from governments and financial regulators worldwide. As the industry evolved, the focus shifted towards addressing scalability issues, improving security, and user experience.

Projects like decentralized finance (DeFi) emerged, offering a wide range of financial services without the need for traditional intermediaries. Stablecoins provided a stable means of value transfer within the volatile crypto market, while privacy coins enhanced transaction anonymity.

Despite these advancements, Peter Szilagyi is disappointed that the speculative aspects of crypto take precedence over what could be its true value.

“Yes, it takes time to ‘build a new monetary system’. For sure… but how about we make a few useful things along the way? Everyone is so focused on becoming the next V that nobody wants to build useful stuff, everyone’s in it for value extraction,” Szilagyi lamented.

Ethereum’s Peter Szilagyi on Crypto: “A Damn Casino”

“Crypto is a damn casino,” he says, referring to how traders cheer when the price soars and lives wrecked when prices crash. In his opinion, the industry is about so much more. This criticism concerns the speculative nature of the market, characterized by extreme price volatility and a focus on short-term gains.

“Bitcoin at least tries (and fails) to be a safe haven asset, the rest are all selling shovels with no gold rush in sight… My feeling is that the speculative aspects outrank the true values way too heavily and we seem to like it because it makes money. I fail to see any value creation thus far… Mind you, making it big by luck and moving your funds into some non-crypto venture is not a success story for crypto. It at best is a success story for a philanthropic lucky person, but more likely a simple diversification of said person,” Szilagyi added.

With this, he observes that digital assets as a system could collapse if everyone’s focus is on “value extraction” instead of building useful stuff. The Ethereum executive calls for the industry to create something genuinely useful that people want to use.

Nevertheless, Erik Voorhees challenges Szilagyi’s casino outlook, highlighting some of the valuable projects in the industry with actual use cases. Among them are stablecoins, DeFi lending, DEXs, privacy coins, wallet apps, financial intelligence systems like Dune or Messari, and high-throughput blockchains. Voorhees is the founder of Swiss digital asset trading company ShapeShift and Venice, a permissionless alternative to popular AI apps.

But Szilagyi writes off DEXs, privacy coins, and wallets. DeFi data developer Geninsus.sol on X agrees. 

“When I talk about crypto to non-crypto people, I always say we have 99% of useless things and 1% of potentially useful things. The most bullish use case for me is the possibility to lend/exchange money from peer-to-peer without any central organization taking a split and all automated,” the developer said.

Szilagyi’s critique of the industry reflects concerns about the prevalence of trading and speculation over genuine value creation. This debate mirrors the ongoing tension between speculation and utility within the crypto space and raises good rhetoric:

“How does the crypto industry impact 99.999% of the world population who doesn’t have money to gamble?”

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The future of the crypto industry will likely be shaped by efforts to balance innovation, regulation, and user adoption. Building sustainable projects with tangible benefits for users will be crucial for long-term success.