Crypto industry purists and tourists

In 2009, Satoshi Nakamoto released the Bitcoin white paper and open source code, and since then, there has been an open spirit in the crypto industry. From the very beginning, anyone can copy the code, change the marketing approach, and launch "their own" coin and network. Tens of thousands of tokens and networks have followed, some of which already have their own knockoffs.

The spirit of openness in the crypto space runs counter to conventional business wisdom, which says that when you create a product that people find useful, you should protect it from others to copy and compete with. The spirit of openness puts collective progress above the short-term interests of any one group - by making it easy for anyone to copy and develop a product, you promote the intelligence and creativity of the entire world, thus theoretically lead to more progress. This spirit of openness has worked well, and I don’t think the crypto industry would matter in today’s world without it — although it comes at a cost.

The good thing about the open spirit is that anyone can improve on existing products and bring more utility to the world. The price of openness is that anyone can simply copy a product, combine a narrative with a marketing strategy, and contribute nothing to progress while squeezing profits out of people. There is an argument that knockoff value miners help progress in the long run - even if unsuspecting retail users are duped by a short-lived knockoff chain (Terra/Luna) or investment scammer (3AC), maybe it will Increase visibility and long-term staying power in this area. But value miners clearly hurt a lot of people (and perceptions of the industry), and I think it's worth exploring whether the cost of openness can be mitigated.

Some believe that "gatekeepers" (regulators, trusted brands) are the best way to mitigate the costs. But it's not just mitigating the cost, it's killing it. “Gatekeepers” hinder progress — and before Bitcoin, we saw this in every industry, including finance. I think understanding the mental models of open-mindedness, purists, and tourists is the best way to mitigate the cost, and the purpose of this post is to help people start thinking about this concept.

Purists and Tourists

Purists have a deep appreciation for the history and nuances of craftsmanship - they understand the nuances and build on previous ideas, have an appreciation for the authentic and bring something truly new. Purists develop products that may be too niche for the mass market, but they are original and carefully built.

Tourists don't care about history or nuance, they just want to create a product that resonates with people. What they build may resonate for a while, but tourists come and go easily. If a product is too touristy, it will not have long-term vitality. If it is hot today, it will disappear the next day.

The tourist-purist mental model was created by fashion designer Virgil Abloh. He makes this point very well. His point is that the biggest influences in design come from the intersection of purists and tourists. Based on this mental model, he has created and led some of the most influential consumer brands in the world, such as Louis Vuitton and Off-White. When I learned about his method, I realized it was the same method I've been using in the crypto space for the past decade.

Here's my take on purists, tourists, and the intersection of the two from the perspective of crypto companies, cryptocurrencies, NFTs, and founders:

Purists:

Blockchain.com is an OG self-custodial wallet company. The company's founders believed that Bitcoin's true utility was in its ability to allow people to be their own bank and remain censorship-resistant, and their core product remains true to that and shows a deep understanding of the space to this day and appreciate. However, they have struggled to break through a niche user base and have failed to adapt to the market when ethereum came along - custodial wallets (Coinbase) and ETH self-custody wallets (Metamask) that offer simple buy and sell functionality have proven to be bigger idea.

Bitcoin is the OG cryptocurrency. It catalyzed an industry and is why we are here today. It serves a huge role as an immutable store of scarce value, but little else has developed. BTC maximalists are right to point out the many scams that followed BTC, but also mistakenly call the real innovations that moved the space forward, such as Ethereum, “scams.”

Rare Pepe is an NFT series launched on Bitcoin in 2016, earlier than all NFTs on Ethereum. The Rare Pepe NFT was created on Counterparty, a protocol on Bitcoin that never broke through to a niche user base for a number of reasons, including a lack of interoperability with BTC wallets. Rare Pepe still has a strong brand and collector base among crypto-native users, but in terms of mainstream attention, it is surpassed by collectibles built on Ethereum, such as Cryptopunks and BAYC.

Hal Finney was an early Bitcoin user who received Satoshi Nakamoto's first Bitcoin transaction on January 12, 2009. He was also a core engineer at PGP Corporation, the most important encryption company before cryptocurrency, and the most important early contributor to the Cypherpunks mailing list and the BitcoinTalk forum. His work has been very important to the development of the field, but only a small percentage of users have heard of him.

tourists:

FTX is an exchange founded in 2019. The company doesn't have any new or additional products for the space, but has been very aggressive in marketing and grabbing market share during the 2020-2021 bull market. Given that the team that built the exchange also ran a trading firm called Alameda Research and pumped up a lot of tokens on their own platform, but few questioned that, there is a questionable history here. For now, it appears the company has a strong media narrative behind it.

Solana , an "Ethereum killer," launched in 2019 and bills itself as "the blockchain built for mass adoption." The project did not bring any original ideas, but they made some design compromises to make it a cheaper and faster chain than Ethereum in the short term. I think these design trade-offs allow Solana to succeed in a bull market where retail money is pouring in, but ultimately they will hinder its long-term success. When a blockchain is purely about optimizing efficiency, with nothing interesting culturally or socially, and lacking new products pushing the field forward, its upside is limited.

Bored Apes Yacht Club is a Personal Profile Picture (PFP) program launching in 2021. It came on the heels of thousands of other PFP projects, but saw early adoption by regular users and then massive support from celebrities like Justin Bieber, Jimmy Fallon, and Stephen Curry.

Michael Saylor pitches Bitcoin in 2021 bull run. He didn’t create anything interesting in the crypto space, and he didn’t say anything interesting about cryptocurrencies — he just parroted what the Bitcoin community has been saying for over a decade. But his MicroStrategy company has gotten attention for buying bitcoin, and he's become a media personality.

Purist x Tourist:

Coinbase is an exchange founded in 2012. It was the first product to allow users to simply link bank accounts and buy bitcoin, and for nearly a decade it has been at the forefront of making crypto innovation accessible to the masses. The company’s early decision to host cryptocurrencies on behalf of users added some centralization that purists don’t like, but there’s no denying that the product has played a huge role in exposing new users to cryptocurrencies.

Ethereum launched in 2015, 6 years after BTC. Without Ethereum, we would not have decentralized finance or non-fungible tokens. Compared to Bitcoin, Ethereum has made some sacrifices in terms of decentralization, but it is undeniable that most of the innovation in this space in the past 7 years has come from the Ethereum blockchain and its developer ecosystem.

Cryptopunks is an OG 10K PFP series that helped catalyze the creative empowerment revolution led by NFTs today.

Vitalik Buterin is the founder of Ethereum. He is an inclusive founder, leads the Ethereum blockchain ecosystem, drives the field forward in the public eye, and exudes all the qualities you want from a crypto leader.

I'm not saying anyone should think I'm right about purism, tourists, and the intersection of the two. I know many people will question my opinion. In fact, most public discussions about cryptocurrencies revolve around people's portfolios. But I think that thinking about this concept and drawing your own conclusions can greatly help you build and invest in a field with a lot of noise, and the intention of this article is just to get more people to think about this concept.