From deterministic optimism to deterministic pessimism, the real opportunity lies in the disillusionment that follows.

Written by: Matti

Compiled by: zhouzhou, BlockBeats

Editor’s Note: This article outlines the evolution of the crypto industry from early idealism to realism, indicating that we are at a critical turning point after disillusionment. Although most projects tend toward imitation and conservatism, real opportunities still lie in the fringe of "certain pessimism."

The following is the original content (for the sake of readability and understanding, the original content has been edited):

I bring another piece of hybrid writing inspired by Peter Thiel. As someone who considers myself a "Thielogian," I often think about the future through the lens of his classic work, "Zero to One." Thiel's analytical framework is flexible and versatile, capable of dissecting various ideas, trends, and movements. However, sometimes it resembles Wittgenstein's ruler—its reliability heavily depends on the observer's stance and doesn't always provide a clear and consistent perspective.

As a crypto investor, I often analyze narratives to better understand potential opportunities. At this turning point in the industry—where we are at a critical moment of narrowing the arbitrage space of emerging technology markets—I am also contemplating how to discover and stimulate higher quality ideas and products.

Through Tier's perspective, I see the timeline of the crypto world as an evolution: from the early "deterministic optimism" of Bitcoin, to the "non-deterministic optimism" under the grand vision of Web3—where finance is ultimately seen as a killer application; then to the "non-deterministic pessimism" of the meme coin casino era; and now, in a time when regulation is becoming clearer, we seem to be strategically embracing a form of "deterministic pessimism."

This is a journey that starts from the idealism of cypherpunk, traverses the startup craze, slides into the quagmire of despair, and ultimately leads to standardization.

Is this trajectory commonly found across various trends? A revolutionary idea, after being partially validated, often gets deified as a panacea; when it fails to meet those lofty expectations, it is cursed and eventually fades into the status quo. The revolution has never truly been completed, yet we continue to replay a certain (for some) satisfying cycle within the closed loop of the Gartner hype cycle.

In the field of cryptocurrency, this grand hype cycle is often obscured by price fluctuations. Each round of the crypto cycle—Bitcoin, the ICOs promising to build a "world computer", DeFi, meme coins, and now the integration of regulation with traditional finance—appears to be a fractal of a larger pattern. Currently, we are in the "valley of disillusionment". According to the framework of technological waves proposed by Carlota Perez, this is indeed a critical turning point.

Web3 promised to "put the profit model of Web2 on-chain," decentralizing and tokenizing it. However, Web2 and Web3 are not a place, nor are they a clearly identifiable "thing." As I mentioned a few years ago, it is more like a "user preference"; and today, this preference still belongs to a niche. If you always need to rely on the language of the old world to explain new things, then you are not actually creating something truly new.

The crypto industry is no longer a frontier market, but opportunities are still there on the edge of this established field. Where do the biggest victories come from at this stage of maturity? Intuitively, it's those players who are in the growth phase or have a late-mover advantage.

It is also worth mentioning that those centralized exchanges that once held the banner of "definitive optimism" and promoted the popularization of cryptocurrencies have now turned into pessimists, focusing more on defending their existing market share rather than promoting on-chain adoption.

In the past, exchanges and first-layer blockchains (L1) brought the highest returns to investors. Ironically, the places where competition is most intense, optimism gives way to realism, are where the biggest winners emerge.

Does this mean we have no "secrets" left to dig? I don't think so. Today's "secrets" are yesterday's lessons. Have we really built many innovative and valuable companies or networks?

The easily reachable fruits have already been picked — most projects today are either imitating their predecessors or making slight patches and pretending to be original. Many "solutions" are chasing problems that do not actually exist, while others simply attempt to copy traditional finance onto the blockchain.

Cryptocurrency was originally a force inherently colored by revisionism, yet it has failed to achieve a true revolution. Today, it is trapped by a core (perhaps a false proposition) question: "Do you want to do the right thing, or do you want to make money?" In other words, are you willing to "sell yourself" at the price the old system is willing to pay? Those revolutionaries who have cried themselves tired in the meme coin casino are increasingly accepting this deal.

Building those fuzzy products that developers think users "should want" (no, people don’t really want to own their data), along with the obvious success of centralized service providers, has pushed the industry into the current deadlock. Nowadays, it’s almost impossible to find true "certain optimists" in the crypto world. But it is precisely in this "almost impossible" that lies your opportunity for frontier investment.