This month I want to highlight a documentary, Line Goes Up, by the Folding Ideas YouTube channel. This video deeply explores the crypto space, the underlying technologies (e.g. blockchain), and the associated products, features, and structures (e.g. NFTs, DAOs). The author clearly believes the entirety of crypto is broken, so you will get a lot of opinion mixed in with the facts. That said, the author does a wonderful job explaining the underlying systems, the history of why crypto was invented (which matters), and how the current solutions are failing.

WARNING: This video is over two hours long, nonetheless, it is well worth your time. I briefly summarize the main points as follows:

1. Crypto was invented to create new solutions to centralization problems. However, crypto requires centralized parties to function, so we haven’t solved that problem.
   • examples: NFT theft, NFT duplication across different blockchains, proof by stake
2. Entirely transparent data on the blockchain is at odds with privacy and security. This limits the usefulness and range of the solutions.
3. Crypto is a zero-sum game; we can’t all be winners. The way to extract fiat currency from crypto is to bring more people in, which creates perverse incentives. People compare this to an MLM or pyramid scheme.
4. Crypto is filled with fraud, and no regulation. The community currently blames the victims.
   • examples: virus payloads inside NFTs, blockchain forks

Crypto is a wide-open space for us to explore. Although the current state of crypto feels toxic and filled with fraud, there is unlimited opportunity to create customer-centric crypto solutions that focus on customer value, not financial ROI. Lastly, the technologies are less understood than standard web2 technologies, meaning there are increased opportunities for fraud because the standard vectors aren’t commonly known. Thus, our crypto explorations demand high scrutiny to protect our customers.

“…the core of the NFT marketplace is a turf war between the wealthy and the ultra-wealthy…Ultimately, the driving forces underlying the entire movement are economic disparity. The wealthy and tenuously wealthy are looking for a space they can dominate, where they can be trendsetters and tastemakers, a can seemingly invent value through sheer force of will…The fact that tokens representing ape PFPs are useless, yet somehow still expensive, isn’t an overlooked glitch in the system, it’s half the point.”